UNEARNED (?) INCOME

Evening Post, Volume CXXX, Issue 4, 4 July 1940, Page 10

UNEARNED (?) INCOME

(To the Editor.)

Sir, —After 45 years' hard and unremitting toil, having during this long period thriftily provided for my old age by investing my savings from time to time in'mortgages and'company debentures, I retired a few years ago on a modest competence. My income from these investments is a self-provided pension or superannuation and has never cost the Government anything by way of grant or subsidy. But, unlike Government or company superannuation or pension, my income is treated for taxation purposes as "unearned" and as such is penalised by the addition of 33 1-3 per cent, extra taxation. This is bad enough, but on top of the 33 1-3 per cent., a further 15 per cent, war taxation is imposed. Not only 15 per cent, on the amount of income tax, but 15 per cent, on the 33 1-3 per cent, as well. Can anybody say that this is fair or equitable?

First of all, why should not my selfprovided superannuation and that of all those who similarly have provided for their declining years by their own unaided efforts, at least be placed on the same basis for taxation as those pensions and superannuations which have been granted and subsidised by the State and by commercial companies. These are classed as "earned" and righty so, but surely, by the same logic, mine is "earned" also. With the increased taxation in the Finance Bill at present before Parliament, the position becomes very acute to those ,on fixed incomes. If the Government cannot, or will not, remove the 33 1-3 per cent, injustice, surely the least it can do is to provide that the extra war 15 per cent, is imposed only on the income tax and not on the 33 1-3 per cent, as well.

I would point "out that while pensions and superannuations have not been reduced, but in many cases increased, those self-provided pensions, of which numerous class mine is typical, have been already very severely reduced by interest reduction legislation, by still further reduced interest by arrangement, by interest lost altogether by default, and by order of the adjustment commissions. Every year brings increased taxation and now my income is just'about one-half of what it was when I retired. Naturally, my former standard of living has been much reduced, notwithstanding the repeated promises of the Government that nobody would be hurt but, on the contrary, everybody benefited.

I now find myself unable to .pay all my life insurance premiums, and these will be the next things to go after their surrender value has disappeared. For several years now I have been drawing on capital and on present indications this process will increase in a cumulative degree.

What between reduction of income at one end, and heavy increases in taxation and cost of living at the other, the lot of the many thousands on fixed income is a hopeless one, and they are being led like sheep to the financial slaughter. If those retired people whose sole source of support is from investments, were tailed on the earned basis, instead of "unearned," considerable relief wpuld be obtained, but what hope is there of that from the present taxation-hungry class Government. In saying this, I raise no objection whatever to taxation required for war purposes, provided it is on an equitable basis.—l am, etc.,

HOPELESS OUTLOOK,