TAXING INCOMES.

Lyttelton Times, Volume CXVI, Issue 16808, 18 March 1915, Page 11

TAXING INCOMES.

SHOULD THE EXEMPTION BE LOWERED? AN UNPROFITABLE PROPOSAL. [From Our Correspondent.] WELLINGTON, March 17. In seeking additional supplies for the public purso during war time, it is generally assumed that the Minister of Finance will follow a well established war precedent by increasing the income tax. The question arises whether its scope will be extended by reducing the exemption of £3OO and" bringing in those whose incomes are, say, £ioo or

over, as is done in iilugiand. This would result in a very largo increase in the ntuuDer of taxpayers, out the yield inignt not be wortn tne extra trouble of collection. There are over 14,000 payers of income tax in Zealand, of whom no fewer than 9035 pay upon amounts under £7OO. The inclusion of smaller fry would add many thousands of returns, but probably little extra cash after allowing for exemptions. Unfortunately, the Government Departments do not appear to possess any figures that could be even an approxi-

mate guide. In the past all that was necessary wJSs to enrol the men receiving over £3OO. Departmental inquiries usually cover a certain margin below that figure, but do not go down anywhere near £2OO. Some sort of a guidip may be found in the statistical figures of New South Wales, but it must be taken with reservations. During the nine years 1898-1907 the . New South Wales income tax conditions were such that records were kept of taxable incomes from £2OO upwards. Taking an average of those nine years, the number of income tax payers in New South Avales was 21.524,'and the number of taxpayers with an income of'between £2OO and £3OO was 10.445, that is to say, 48 per cent (nearly half) of the total number of taxpayers were in the £2OO-£3OO division. As, for the possible revenue to be obtained by widening the net, it is fairly evident that there is.not much profit for the Government, and it must be remembered that the tax after boing C + ,'ll ton +« l.„ ~„11 J.-. In> ..

assessed still has to be collected. For various reasons more or le-ys obvious \* is morb difficult to collect from the small taxpayer tbp.n from tbo large one. . At present there are 14.277 pavers of income tax. To get this resultinquiries have to be made concerning over 40 000 pcopl": the balance slip through the net. If. it- takes a n°t of this sizfl to catch 14,277. how big a net* will be required to enclose doublethat number? A ho«t of petty investigations w'll be required, and many Wanks will be dvnwn. At nresent in

nurse lviauae.

| evorv three casts of the net onV ore lands fisb. and when the not is dinned into t n e lower waters ihe average haul mav bn less. _ Small fish take more ratebint and yiehl to the fisherman a lower return. Clearly an extension downwards of th« taxable pron means much more marbinery working at a lower rate of r>r^fi A . Not onlv •'<: +l»* vieh3_ per head "small in the £?.m£W div'sion, but the oost of assessment and of collection of revenue must be rela+'-'-'olv Inrpro. ~ Assessment diliicni+ipe wonVl he osivva'lv (Treat in connection with the small Many small trade c men an idea that they are making «rn«d wnsre'7, but the ?d°a is not verv d"fin : to. I*rr>c«>bJv hooks are few and ««t very a"d their s+"ck- 4 ik)«nr a. not very 'ta'vrible ort°ratioi) To Hear \rn flip si+nntioT) aTI offiem- of t l ".* T*>'iO'me T-'v T>-»»>artrnent may have to iw'to an and | assessment, and mav arrive at j the c"'nte l u' ,! '"i that t'm nn-d-'e™: vt"-'-!- ; enon«rh profits to pt' a twenty-sel-ling hx; or soarcdv .-•■v-pn-i. to par 'or + l "* time taken to demonstrate that fact.-