RATES OF INCOME TAX.

Otago Witness, Issue 3614, 19 June 1923, Page 28

RATES OF INCOME TAX.

COMPARISONS BETWEEN ENGLAND AND NEW ZEALAND. WELLINGTON, June 12. With further reference to Sir Joseph Ward’s comparison between the rate of income tax in England --’d New Zealand Air Massey says: I have to say that all comparisons of rates of tax in dtffe.rent countries are more or loss misleading, in that they overlook what is even of greater importance—viz., the making of the assessment and the allowance of rebates and exemptions. My reference to the super tax was chiefly to call attention to the fact that in addition to the ordinary income tax assessment in England there is also a super tax assessment whereas in New Zealand there is one assessment only, and to compare the maximum rate of ordinary assessment in England—viz., 4s 6d in the £l, with the maximum rate of assessment in New Zealand—viz.. 7s 4d in the £l, wds not only misleading but absolutely incorrect. To make the comparison in any way equal the maximum late of the super tax —viz., 6s in the £l, must be taken into consideration, and this, notwithstanding Sir Joseph Ward’s protestation. does bring the maximum rate up to 10s 6d in the £1 on certain stated incomes. That the rates of tax in New Zealand compare more th m favourably with those in England can be better gauged from a table which follows, and which shows the amount of tax paid for the j-ear ended March, 1923. by a married taxpayer with two children in England and in New Zealand on certain stated incomes. I have taken a married taxpayer, as this makes the comparison more favourable for the English taxpayer. In the case of unmarried persons the New Zealand tax assessment is much more favourable. For instance, an unmarried taxpayer with an earnetl income of £550 in England would pay £22 10s. In New Zealand he would pay £2 10s. That weight of tax in England is oppressive, and is not satisfactory from the taxpayers’ noint of view, as is evidenced by the following, which is an extract from an article written by Mr P. D. Leake. F.C.A.. a well-known accountant and authority on income tax practice. “The destructive effect of the recent increased progressive taxation is shown by the fact that whereas before the war an annual income of £50,000 paid about £2BOO in income taxation, the amount payable for tho year 1921-22 was n-> less than £28,000. This amount of £25,009 now paid in additional taxation would otherwise have been destined to increase employment, both industrial and domestic. It would have been distributed to wage-earners directly o-r indirectly. If invested in Government securities it would have released an equal amount in ether hands, which again would go to wage-earners.” It is true that the assessment in England is chiefly an individual one, an! the effect on the individual is particularly noticeable in the amounts pavable by individuals front £ICOO downwards, as compared with the New Zealand tax payer:—

Tot?l Income. UNEARNED INCOME. N.Z. Tax. English Tax. £350 ... Nil. £ 7 15 0 £500 ... £ 5 0 0 26 10 0 £1000 ... 63 15 0 HO 17 6 £5000 ... 1163 15 0 1512 7 6 Total Income. EARNED INCOME. N.Z. Tax. English Tax. £350 ... Nil. £ 3 7 6 £500 ... £ 4 10 0 20 5 0 £1000 ... 57 7 6 124 17 6 £3000 ... 1116 5 0 1462 7 C