Manawatu Evening Standard. TUESDAY, DECEMBER 27, 1921. THE INCOME TAX EXEMPTIONS.

Manawatu Standard, Volume XLIII, Issue 3106, 27 December 1921, Page 4

Manawatu Evening Standard. TUESDAY, DECEMBER 27, 1921. THE INCOME TAX EXEMPTIONS.

Tiik Minister ol Finance has succeeded in getting his fixation proposals through Parliament, and is to lie congratulated uiMiii the fact that the House lias proved s'i accommodating, despite its critical attitude. The opposition to his proposals, which involved the transfer of a certain amount of taxation Irom land and income tax payers to other sections ul the community hitherto largely exempt Irom direct taxation, met with the strongest opposition from the Labour Corner and a certain section oi the Opposition, on the ground that the transfer involved the taxation of the working classes, the amusements tax being specially opposed in that connection! Acceptance of that taxation is, however, purely voluntary, and the taxation itself cannot he regarded as at all oppressive, in character, nor does it arbitrarily impose obligations people can only meet with difficulty, as in the case ol the hind and income taxes. During the debate on the .second readin" of the Finance Bill the lion. T. M. Wilford admitted that, the former tax was in many cases more than the farmer could bear, as it was (ixed on a valuation which was in many cases too high. But the party which acknowledges Mr Wilford as its leader has, time and again, declared that the land tax is not heavy enough, and that greater revenue ought to be obtained From it. The valuation system is, too. based on a system devised by the Continuous Liberal Administration, and we are rather surprised that the members of the Reform Cabinet have not attempted to remodel it on lines that would more correctly reflect the using value ol the land held by the taxpayer. The true basis of valuation is the productive value of land, if put to the use for which it is best adopted, always providing that it can be profitably used in that way. Thus lands adapted lor croppine and general farming purposes should be valued as farming lands, and not have fancy values placed upon them, simply because they happen (as is the case sometimes) to possess suburban values, ;is residential areas. It should be time enough to assess them on the latter basis when they are placed on the market or disposed of for residential purposes. Some day, and that early, we hope, the Government may be induced to look at the matter from the standpoint ol the farmer, who claims that his land should be taxed, not on the fanciful value of what it might be expected to fetch if offered for sale, but on its productive value, having regard to the uses to which it is being put. Tn that way. and along that line, will be found a more equitable method ol assessment, and. consequently, a less oppressive form of taxation, and we see no reason why on such a basis of valuation and taxation, the farmer should not be again exempt from the payment of income tax. as he was in the pre-war years, when he was only called upon to pay land tax.

REDUCE THE EXEMPTION. T]io burden imposed by land and income taxes this year is far in excess of what it should be. But, with our heavy liabilities and overhead charges, there can be no great measure of relief for the taxpayer, unless the general incidence of taxation is changed, with a possible reduction in the present income tax exemption. The cardinal principle which should be observed ill ] nil taxation matters is ability to pay. f When a tax becomes so oppressive that

Hie payment involves the taxpayer in actual debt, it is timq the authorities took stock of the position, and considered other methods of meeting the obligations of the State for governing purposes. That, we believe, is being done to-day, and from hints dropped by the Prime Minister, in his capacity as Minister of Finance, from time to time, we are inclined to think next year will witness a further readjustment of taxation on lines that will more equitably apportion the burdens it entails by increasing the number of direct taxpayers, and so bringing about a certain amount of relief to those who are now bearing the brunt of the burden. Willi a further exemption, such as that suggested by Mr Statbam in ilie House on Friday evening, in favour of married people, we see no reason why the income tax exemption should not be reduced to £2OO pel' annum. In the Commonwealth ol Australia im-oiue tax is levied by both Uie Federal and State Governments. The Commonwealth levies its income tax, in Uie case ol single persons without dependents, mi all income in excess ol Cl!i:i, ibe exemption in the ease ol married oersons, or persons with dependent-:! I>fiii<* tirrfi. The State Governments make the following exemptions:- New South Wales, C2/50j Victoria, exemption (if l'l of) up to CSOO, no exemption over CoOU; Queensland, exemption no to C2DO. In excess ol that amount the exemption is reduced by LI lor every L'l. the exemption vanishing at LiUllll: Sunt!: Australia, exemption, GloO; Western Australia, exemption ol CIOO for single persons and CISG for married persons. Tasmania gives exemptions of LTS(J in the case of an unmarried returned soldier, ol I'M) in the case of a returned soldier marrii d or a widower, or widow bavin-' ,i dependent ehild under Hi years of age; ol USM j„ the case of single persons and o Cinti in that of married persons and widowers or widows. The Commuiiinonwealth income tax ran-:, troin line,'pence ami throe eight-l dredths of one penny in the Ll of taxable income, rising by graduations for every additional l'l of income up to 5s in tin CI with a super tax of 7(.).(i20 per cent, '1'1,,. minimum taxation (Federal ana State) on incomes is therefore Is in the L'l starting in the case of New South Wales, with a super tax ol u:< i„ the Li on all incomes; Gd m \ ictorin ' c Jd i» Queensland, with super tax of So'per cent.: Bd in South Australia and yd in Western Australia; the maximum tax rising to lis in the £ in New South Wales; 8s 9d in Victoria; Us Gd plus 20 ner cent., in the LI in Queensland; His Id in the L'l in South Australia'! and Ks Bcl in the Li in Western Australia, plus lo per cent., the rates quoted in every case being those for incomes derived from personal exertion only, the rates for what is termed " unearned income being liiirhcr in the case of the Commonwealth and of New South Wales, Victoria, Queensland, South Australia and Western Australiia. The Tasmanian rates are not given in the return from which we quote, as tabled in the Federal House of Kepresentatiyes by Sir Joseph Cook on October 26th last. The p o i n t that has to be noted, however,'is that while incomes from £UK) ,„.,. ' al |,nun upwards are taxable 111 Australia, in the case of single persons. a || incomes up to C3OO per annum are exempt in New Zealand. I here is no ,-easou vhv the exemption Mould not | )0 lowered'in the ease of single persons in this Dominion to, say VMi pel annum, leaving the exemption in tin ease of the man with marital responsi- ' unties at the present figure, viz., t'M).