TAX COMPARISONS

Evening Post, Volume CXXVI, Issue 81, 3 October 1938, Page 7

TAX COMPARISONS

N.S.W. CONCESSIONS

CONTRAST WITH DOMINION RATES

The cabled advices over the last ieo? tfays that the New South Wales Government is reducing State wages-tax rates on the lower incomes, while th« Federal Government is increasing Com. monwealth income tax rates on both individuals and companies have left some doubt in the minds of the public in New Zealand as to what is Hie net result of these conflicting proposals, says a statement by the Associated Chambers of Commerce of New Zealand. Examination of the position shows that the New South Wales tax remission^ for 1938-39 are not offset by the Federal additions for the same year, and that, despite the Federal increases, both individuals and . companies . are still much more heavily taxed in New Zealand than in New South Wales. Below are tables which we have drawn up, giving comparisons between New Zealand and New South Wales taxes for the current, financial year, , after adjustments have been made to conform with the new State* and Commonwealth rates as mentioned in the cables. Income and Wages Taxes. Taxpayer, Wife, Two Children, "Earned" income.

Ac these tables relate to 1938-39, and as the increased taxation for the New Zealand social security scheme doe* not become operative until the beginning of the financial year 1939-40* neither the proposed increase in the New Zealand wages tax of fourpence in the £, nor the proposed new tax of Is in the £ on New Zealand companies, has been taken into account in the tables. The Australian national insurance scheme becomes operative on January 1, 1939. As against the percentage wages tax proposed for New Zealand,, Australian wage-earners will pay a flat, rate contribution of Is 6d a week. If we assume that there will be no change in income tax rates in either New Zealand or New South Wales for the financial year 1938-40, the table which follows shows the amounts that would be paid in each case in 1939-40 (income and/or social security taxes in New Zealand, and Commonwealth and State -income tax, wages tax, and national insurance contributions in the case of New South Wales):—

The reason why the tax on gX«ir South Wales income of £400 s^iows a sudden drop as compared with the £365 income is because the Australian, national insurance scheme compulsorily embraces, and exacts contributions from, only those persons with an income of £365 or under, unless they are manual labourers, in which case they continue to contribute. Figures now available show that for 1937-38, taxation a head in New South Wales (including Commonwealth taxes) was £17 12s 7d, while for the Commonwealth and the whole- of £he States it was £27 6s Id, as compared with £23 Is 3d a head in New Zealand for the same year.

Bacome. Heir South Wales Ne*rSe«laii4« s b ». d. a •. a. iso *•,«.*. mi e # • xw .«;*4*4. *ra mi t 218 <*»»*.. OSS 854 250 .*,*«. 1 14 S 9 6$ 300 4 14 11 0 • 350 ...... 6 18 8 12 IS 4 400 ,.,W»,. 8 13 4 17 14 8 450 ...*.#».. 13 0 3 23 16 9 900 ,..,**, IT H 9 30 3 0 000 .~*m.. 38 5 1 43 8 0 800 .,»«„, 52 18 1 71 8 9 1000 .^m,*. 80 10 1 104 14 8 JWO .^^m.. M6 8 4 91« 8 O 5«00 ....•♦,.-. 1M0 19 7 1451 S • Tmxatt*R m CompaalM. Net Income. New South Wales. New Zealand. £ £ a. d. ~ £ s. d. 4,000 ..,.,,. 84618 0 866 IS 4 5,000 ,....». 1068 10 0 1201 13 4 . 6,000 i-. M H,.'iaiY0 4 0 1758 6 T 7,000 148118 0 2345 18 8 8,000 ....... 1693 U 0 2788 17 9 9,000 1905 6 0 3375 0 0 10,000 2117 0 0 3750 0 O SOCIAL SECURITY ADDITIONS.

TAXPAYER, WDNB, 3 CHILDBXN. Net income. New South Wales. KvwZaalutd. £ fi a. <L a g, d. 150 «. 3 18 0 8 10 4 200 *4*r4v A 16 0 110» 218 3 18 0 ■ 11 It • 250 . «MM»«. 5 12 3 IS ft • S00 .*^.*>. 8 0 4 IS 0 I 360 -V,,*. 10 16 8 H 10 • 365 ..«#», 11 9 8 19 13 4' 400 ■, MJI . S It 4 24 If 450 18 0 S 31 9 * 500 .«4«m. IT M 9 » » K 600 ,.*,„,» tt 5 1 58 S 9 800 5Sff^» 58 18 I 8S fl S 1000 m^»m 8ft 1« 1 121 8 0 2000 '.i..,^. 365 8 4 349 14 8 5000 1290 19 7 1534 14 X