TE AWAMUTU COURIER Printed on Mondays, Wednesdays, and Fridays MONDAY, 12th APRIL, 1943 TAX ANOMALY'
THE Associated Chambers of Commerce, in a statement recently printed, have made out a sound case against section 5 of the Finance Act, 1942, which amended the basis of income taxation, making the rates of assessment on the taxable part of incomes rise progressively with the amount of non-assessable income they may include. The effect of the section, for example, on an income of £6OO, earned £2OO and non-assessable £4OO, is to make the £2OO bear tax to the amount of the difference between tax on £6OO and tax on £4OO at the earned income rate. In the field of mixed taxable and non-assessable (or nontaxable) incomes, this is a device to bring non-assessable income indirectly under impost. The purpose is open to argument; the method is clearly unjust, as one fact is sufficient to show. The device operates against the mixed income only; the wholly non-assess-able income is untouched. What follows was illustrated in one of the association’s tables and examples under it. Smith, with an income of £7OO, non-assessable £6OO and earned £lOO, has his tax rate raised from 4s 4d to 5s 4d on the earned £lOO. Jones, whose income of £7OO is wholly nonassessable pays no more than he did before; he pays nothing. Brown, whose taxable income (earned) is £lOOO and who draws £lOOO more from dividends (non-assessable), pays £4OB 6s Bd, or £B3 6s 8d more than before; Robinson, whose whole income nf £2OOO is derived from dividends (non-assessable), paid nothing before and still pays nothing. No argument of necessity or of principle on the Government’s part can uphold so unfair a discrimination.
On one point, and not an unimportant one, the association cannot be sustained. Parliament, it said, had adjourned “without being given an “opportunity” to deal with this question. It is impossible to agree. The Address-in-Reply debate was a wideopen opportunity to be taken; any member could have created another, specifically, by asking a question. Parliament, unfortunately, has almost abandoned the duty of paying close and continuous attention to financial questions and of informing Itself to do its duty well. But there is a point that can fairly be made, with a bearing on this question and many others like it. Those who refer to section 5 of the act will find its purpose conveyed in technical phrases, precisely intelligible to tax officials, lawyers, and accountants but not to others, not to the average politician or the average taxpayer. Now it is true that the first object of law drafting is to make sure that the desired legal effect is precisely defined and secured, and technical language is often the most convenient and sometimes the only possible instrument. But the law ought not only to be precise, as lawyers and officials read it; it should also be perspicuous, as politicians and taxpayers read it. And in practice this means that a clear English paraphrase. or explanation, or illustra* tion, should be annexed to all legislation cast in technical language. If this were systematically done, members of Parliament would see more plainly what they are about; the public would more readily understand the obligations imposed on it.
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Bibliographic details
Te Awamutu Courier, Volume 66, Issue 5604, 12 April 1943, Page 2
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539TE AWAMUTU COURIER Printed on Mondays, Wednesdays, and Fridays MONDAY, 12th APRIL, 1943 TAX ANOMALY' Te Awamutu Courier, Volume 66, Issue 5604, 12 April 1943, Page 2
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