INCOME TAX INCREASE

Taranaki Daily News, 3 August 1931, Page 7

INCOME TAX INCREASE

“AN UNFAIR FEATURE."

SEVERITY ON ONE CLASS.

“The increase in the income tax perpetuates an undesirable feature that imposes unnecessary severity on one class of taxpayer,” said Professor H. W. Segar, Professor of Mathematics at the Auckland University College, criticising the taxation proposals on Friday. “The man earning a salary of £BOO will have to pay £l6 13s 5d on the last £lOO, while the man earning £9OO will pay only £ll 7s 6d on his last £100; the graduation in the scale is abruptly broken, not in favour of the lower salaried man, but in favour of the man with the higher income.” While this anomaly was also a feature of the former scale it was aggravated by the new increase in the surtax. In the case of salaries of between £9OO and £looo there was not the corresponding steepness in the tax that might be expected. . On the contrary, it was unfairly diminished, due largely to the rapid diminution in the sum exempted as the salary increased. “It appears to me that £l6 13s 5d is too much for a man in the £BOO class to pay on £100,” said Professor Segar, “It means that persons earning between £7OO and £BOO are taxed more severely than any others. It is perpetuating an unfair feature that could be removed with only a minimum of ingenuity, still giving the Government an identical yield of taxation. The simplest way would be to make general or only partially remove the exemption of £260, but steepen the graduation. In England the tax is probably heavier than it is in New Zealand, but it has no unfair feature, such as ours has. That this unfairness should persist in the new scale can only be due to want of inventive resource?* Professor Segar said there could be no objection to the reduction of the general exemption from £3OO to £260, as the lower figure merely corresponded to the reduction in the cost of living.