NO INCOME TAX RELIEF

New Zealand Herald, Volume LXXIV, Issue 22846, 29 September 1937, Page 12

NO INCOME TAX RELIEF

Crushing though the present burden of direct taxation is, few people probably were so optimistic as to expect that the Budget would promise any measure of all round relief. The case for reduction of the levy on incomes has been argued often enough, and has never been answered, but there has been no reason to hope that it would have any result. As frankly implied in many parts of Mr. Nash's statement, the expansionist policy, on which his Government has embarked is simplj' irreconcilable with relief to the taxpayer. However, the new scale of assessment introduced last year produced increases in the amounts paid which fell with especial weight on certain incomes in the lower middle stratum —from £SOO to £7OO a year. As one example, the married taxpayer, with two children, receiving an earned' income of £SOO a year paid £7 lis 8d income tax on the scale existing in 1935-36, assuming there were no deductions for life insurance premiums, superannuation payments and the like. Under the scale introduced last year histaxation was increased to £l2 9s Bd, or by nearly £5. On a similar income of £6OO the increase was from £ls lis 9d to £22 Bs, or almost £7. On £7OO the taxation was £2B 6s 3d old scale, and £33 6s 4d new, a rise of £5. By contrast, an income of £BOO in the same class with the same exemptions escaped lightly, the increase being 14s. On £9OO it was £2 4s 3d and on £IOOO £2 f6s. This may have been a "straightening of the curve," but the man most affected had very good cause to regard it as a straitening of his means, exceedingly harsh compared to the treatment given others far better off than himself. With a yield from income tax mounting tremendously—estimated at £7,500,000 this year, compared with £4,581,000 in 1935-36—the Minister might well have given relief to these oppressed people without waiting for the general revision of incidence indicated for the future.