WAR TAXATION.
HOW THE NEW PROPOSALS OPERATE. INTERESTING COMPARISONS. [From Oue Correspondent.] WELLINGTON, August 15. The Finance Minister presented to the House to-day a series of tables showing how the land and income tax proposed this year compared with last year's taxes. In the case of incomo tax, including ordinary and special war tax proposed this year, and ordinary income tax plus income tax under section 5 payable last year, the Department showed the following comparisons : Assessable Present Proposed Income. lex. Tax. Increase, £ £ s. d £ s. d. £ a. d. 500 n 13 1 1- 10 0 0 16 8 sot) 31 5 0 42 3 9 10 18 9 1,000 49 11 S 70 (5 3 20 14 7 2,000 219 11 8 219 9 7 29 11 3 00.) 356 5 0 632 lb 3 146 11 3 •1,00) 560 13 10 920 6 3 339 12 5 7 000 1,228 <5 8 2,557 10 0 1,329 3 4 Io'.OOO 1,778 6 8 3,t52 10 0 1.904 3 4 oq 030 3.611 13 4 7,432 10 0 3,fci) lb S 50.000 9,111 13 4 18,682 10 0 9.570 lo 8 100,000 18.278 6 8 3 1,432 10 0 19,10 l In the case of ordinary income tax a taxpayer wdth an income oi of which £IOO is taxable, pays £2 10s, or (id in the £ on the amount taxable, but at- £SOO the exemption begins to decrease and disappears at an liicomo of £9OO, which pays on a graduated scale «id on the whole amount, or £3l 17s (3d. By the time income reaches £I6OO the tax amounts to a siuluug in the £, representing £BO. An incomo of £4OllO pays 2s, representing £4OO, while £t>4oo pays 3s, representing £91)0. In the case, of all assessable incomes over £3GO an additional 50 per cent is levied as special waxtax. In the ease of land tax, where the taxable amount is £IOOO, the rate of tax is a penny, producing £4 3s 4d, and the tax rises'by one thirty-second of a penny in each additional £IOOO. tk taxable estate of £IO,OOO is taxed 1 9-32 d, paying £53 7s Sd. An estate of £33,000 pays I'd. totalling £275. and an estate of £193,000 is taxed 7d, representing £5629 3s 4d. All land tax is increased by an additional 50 per cent, by way of super tax. Some actual cases by the Taxing Department to show how the war tax operates in comparison with the excess profits tax illustrate that in some instances taxpayers who paid a heavy levy under the excess profits tax will escape much more lightly under the proposed war tax, while , large incomes which got off lightly last year owing to tho absence of excess profits will contribute a great deal more to the Treasury under the proposed war tax. In the case of one income of £56,368, which paid £25,590 3s Bd, including £15,448 in excess profits tax under last year's taxation, the same income will only pay £20,922 under the proposed taxation. Another income, however, of £54,345, which paid only £9613 7s 8d under last year's system, will pay £19,985 15s 6d under this year's taxation. Among other actual instances are the following:— Existing Proposed Income Tax. Tax. £ £ s. d. £ s. d. 27.541 9,172 18 0 9,433 5 6 37,785 4,864 12 4 11,838 11 8 •1,591 2,583 9 6 1:152 17 7 4,634 717 12 2 1,23! 16 4 ARGUMENTS FOR falG SURPLUS. Sir Joseph Ward, in the course of discussing this year's proposals, remarked that in one case, that of a landholder whose property returned a small income in proportion to its value, the taxpayer would pay fifteen shillings in tho pound. He appealed to members not to raise sectional or party issues regarding tho taxation proposals. ..Money was needed and it was necessary that tho Dominion's finances should bo placed on a thoroughly sound footing until tho war was over, therefore one great question to consider was our financial needs for war purposes. Jt was essential that we should nave strong finance to he ready for emergencies and in order to lighten the country's burden after the war. Mr Payne: Is that the reason for the big reserve in London? Sir Joseph Ward : I t is partly the reason. The Minister adder] that they would have over ten millions out of the post- office savings bank used for war payments. Whero they were making provision for repayment of the war loan over a long period of years they would have to be in a position to repay their obligations to those who had nut money in the savings bank if tney wished to use it for industrial and commercial purposes. This was another reason for holding a strong reserve in tho Old Country. Referring to the estimated surplus for this year the Minister concluded that it would be a good and proper thing if 'the, surplus amounted to three millions. Last year's surplus was based upon complete safety, and if matters went on satisfactorily there would be a very large surplus at the end of the present year. To those who argued that it was wrong to havo a big surplus lie replied that his business was to see that the country's finances were in a position of complete safety, and with that in view it was a proper thing to aim at a big surplus, for no one knew what our war requirements might be within even a few months. (Hear, hear.)
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Bibliographic details
Star (Christchurch), Issue 12087, 16 August 1917, Page 4
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920WAR TAXATION. Star (Christchurch), Issue 12087, 16 August 1917, Page 4
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