TAXABLE INCOMES

Hawera Star, Volume L, 26 March 1931, Page 8

TAXABLE INCOMES

MAKING UP THE DEFICIT RAILWAYMEN’S CONTENTIONS STEEPER INCOME TAX INSTEAD OF CUT. I The following statement in connection with the proposal to cut the salaries of the civil servants, has been issued to the Press by the Amalgamated Society of Railway Servants (A.S.R.S.): — Tin? deficit in revenue for thcfinancial year 2931-2 as estimated by the Prime Minister (Hon. G-. Forbes) amounts to £4,500,000. When issuing his statement on February 14, Mr Forbes set out the steps which he proposed to take in order to balance the Budget next year. The Amalgamated Society of Railway Servahts agrees with the principle of a balanced Budget and recognises that if Mr Forbes' estimate is correct, either expenditure must be reduced or additional taxation imposed. iMr Forbes proposes to meet the de. Ificiency in the following manner:— A 10% reduction in wages £ and salaries of civil servants 1,500,000 Increased direct (income rax) and indirect taxation ('Customs duties. etc.) . 850,00 0 increased postal charges . . 900,000 Reduction in sum set aside to redeem public debt—adjustment of highways fund, etc 1,250,000 £4,500,000

Without commenting on the other items, the A.S.R.S. affirms that the proposal to reduce the wages and salaries of civil servants ! is against every principle of equity and good conscience, Tt entails a special levy on a body of employees which has rendered, and is rendering, splendid service to the communitv.

Mr Forbes says that the necessity for the reduction in salaries is due to the fall in prices, and states that he expects that the reduction in wage and salary costs will bring prices down still further, but if this result should be achieved, will riot an agitation arise for a further reduction in wages to meet this further fall in prices, with succeeding agitations until the New Zealand living standard is down to the level of that in other countries?

The A.S.R.S. proposes to set out some facts which have led up to the present situation and to then ask your readers to examine its policy for readjustment. The information will cover production—external trade —incomes and income taxation. PRODUCTION.

A table published on page 927 of the 1931 Year Book shows that- the production in 1928-9' (the latest figures Available) broke all records in value and volume, being 46% greater than ten years ago, the actual figures for the biennial years being:— Percentage Percentage increase in increase in value over volume over Value 1918-19 1918-19

EXTERN AR TR A DE.

The latest external trade figures are published in Bulletin No. 13 of the Department of Industries and Commerce. Accepting tin* orthodox economy that an excess of imports over exports is an adverse balance of trade, we find that the year ended December 31 last showed a better balance than in 1921 or 1926; but the significant figures are tlio.se for 1928 and 1929. No two successive years since 19*14 have shown so favourable a balance as these years, the actual figures being:—

The 1930 figures are: — £44,940.692 £43,025,914 £1.914,778

It is admitted that the fall in the price level has resulted in a decrease return for our exports during the past year; but the workers neither in nor out of the public, service shared in the remarkable prosperity of the years .19*28-29 and it is against all the principles of equity to make a special levy on them to balance the lean vears.

rxuom.es and income tax

The following table shows the assessable incomes for the years mentioned, together with (lie tax assessed for payment:— A ssessa ble Tax

This table shows that since 1022 assessable incomes have increased by £27,033,548, while the tax assessed, has declined bv nearly £3.000,000. It is from this source that the A.S.R.'S. contends that the iGovermneiit can most equitably obtain the revenue necessary to balance the Budget. OUST TAXATION. One of the test's of good statesmanship is to levy, taxation where it will create a minimum of hardship to the taxpayer, and we contend that a | graduated increase of income tax j which, as the Prime Minister states, j‘'is not only the most equitable form jof taxation, but the one that has the least effect on working costs’’ will acjeomplish this. I DROP THE SPECIAL LEW. We suggest that while the assessable incomes have increased by £2.7.000,1)00 and those in receipt of them are paying £3.000,000 Jess in taxation, that the proposal to make a special levy on the public service is inequitable and should be dropped, and a graduated tax on incomes of individuals be substituted in its stead. That the revenue is available from the source is, proved l>y the latest information on incomes.

The £05,380,217 quoted as assessable incomes for 1929-30 includes companies —individuals—agents and non-resident traders. The following analysis of assessable incomes of individuals as shown on income tax returns for .19291930 gives the incomes of individuals only:— Total of incomes exceeding 6ize of income Total incomes amount between in class shown £ £ £ £

The figures quoted relate approximately to incomes received during the year ended Marc. h3l. 1929. :

Presuming that the incomes for the year ended March 31. 1930 showed a decline of 20%, there is still an ample margin for a. graduated tax on them sufficient to meet the deficiency without inflflicting hardship or privation on any individual, and this would be more just and more in accord with New Zealand traditions than to make ti special levy on civil servants and wage earners. A summary of this statement shows:— J. That production lias broken all records. 2. That the years 1928 and 1929 showed tin* best balance of trade of any two successive years in the liistory of the Dominion. 3. That the incomes of the workers in and out of the. public service werj not increased in the prosperous years of 1928 and 1929. 1. That the latest figures available show that assessable income in 1929-30 .totalled £65,380,217, and that this figure. exceeded the incomes of 1921-22 bv £97.033,548. " , ' 5, That the income tax assessed in 1921-22 was £6,266.678 as against £3,322,672 in 1929-30 ('£27,000,000 more income—£3,090.000 less tax). 6. That three individuals last year shared an income of £71,423, and that incomes of individuals in excess of £I.OOO totalled £13,755,349, and that if individuals in receipt of incomes exceeding £SOO are included the total amounts to £26,1*17,594. 7. That it is unjust to make a special levy on railway workers and other public servants. 8. That acting on the principle of levying taxation according to ability to pay, the deficiency should be made good by a special tax on individual incomes in excess of £SOO.

9. That if this principle is followed the members of the civil service who are in receipt of taxable incomes will pay the same as those out of the service.

ts VO VO vq 'O vo CD 0> to O ro VO to to ON to 04 CO M vo OJ VO o 1 ® *•3 ON ON 04 on ►—* CD ON cn S VO Cn LO © ** Ov & o 04 ON s o vo vO -3 £ to 03 CO o ON l-v o O'

Exports* Imports. Excess of Exports. £ £ £ 1928 .. ... 56,188,481 44.886.266 11,302,215 1929 .. ... 55,579.063 48.797,977 6.781,086

Income, A;-sesse',l. £ £ 1821-22 . . . 38.346,660 6,266.678 1028-24 . . . 44.738,064 3,335,205 1025-26 . . . 52,632,488 3,100,277 1927-28 . . . 58,651,561 3, J 04.860 1929-30 . . . 65,380-,217 3,322,672

20,000 & 30,000 71,423 71,423 10,000 20,000 440,431 711,854 9,000 10,000 96,354 608,208 8,000 „ 9,000 231,113 839,321 7,000 ,, 8,000 323,823 1,163,144 0,000 7,000 235,980 1,399,130 .7,000 0,000 007^3422,006,472 4,000 7,000 '874,782 2,881,254 a,ooo ?* 4,000 1,300,414 4,247,608 li.OOO ,, 3,000 2,040,404 0,894.162 1,000 ,, 2,000 0,801,187 13,755,349 700 „ 1.000 12,302,247 26.117,594 400 700 0,837,091 32,954,685 300 „ 400 11.009, no 44.023,795 Lossth 1 11 300 • 7.923.930 31.947,725