UNEMPLOYMENT TAXATION

Nelson Evening Mail, Volume LXX, 12 March 1936, Page 6

UNEMPLOYMENT TAXATION

NEW PROPOSALS LIKELY RECOMMENDATIONS OF MINISTER (By Telegraph—Press Association) WELLINGTON, This Day. lilipugh he 'would not reveal the nature of them, the Minister of Labour (the Hon. H. T. Armstrong) stated yesterday that he. had certain lecommendations in respect of unemployment taxation prepared for presentation to Cabinet. ’ During recent months there has developed a fairly widespread recognition of the inadequacy of the present tax of 8d in the £ for current needs, and this is borne out by. the new disclosed fact that the weekly outgoings of the Unemployment Fund lately have been £30,000 in excess of the income. There has been a common acceptance of the need, too, for an increase in the amount of the tax, which,' it is felt iii many quarters, should not have beea reduced last year. A considerable body of opinion has favoured a graduated tax, and it is known that the Minister himself in. the early stages gave this idea consideration. From a close examination of it. however, it would appear to present certain difficulties, the major one being the fact that income tax is on a graduated scale. Another graduated tax imposed on the income tax would increasethe burden considerably on those earning higher salaries.

Moreover, one of the stipulations of the Act is that only those who contribute. to. the fund should receive benefit from it, so that a graduated tax which seeks to relieve those on low salaries would inequitable in its incidence. It would, in effect, mean that those who were likely to need the fund would not be contributing to it—or contributing a minimum amount—while those who were not in the least likely to call cn it would be finding the majorportion of it.

Another point is that while most people failed to see the justification for the recent reduction of 2d in the £, there are some who would object to any increase again.