Call For More Indirect Tax

Press, Volume CVI, Issue 31083, 11 June 1966, Page 18

Call For More Indirect Tax

(N.Z. Press Association) NEW PLYMOUTH, June 10.

The Wellington division of the National Party today called for reduced direct taxation and greater indirect taxation. Mrs J. Wilson (Karori) said many party supporters were concerned at the high rates of direct taxation and the relatively low level of income (£3600) at which taxpayers reached the maximum flat rate of 13s 6d in the £ for ordinary income tax and social security tax. “The prevailing unsatisfactory situation clearly has its origin in the slavish adherence of the Government to the policy of basing income tax liability solely upon the principle of ‘ability to pay’— the benefit of the contribution to the country’s over-all economy of any increased productive effort by taxpayers being largely ignored,” she said.

“There is undoubtedly a very strong feeling today that the time is overdue for the Government to turn its attention to devising ways and means in the taxation field of rewarding enterprise and in-

creased productive effort, instead of inflicting punitive taxation on the resultant increased earnings involved. “With the effects on living costs of continuing inflation and the high level of existing rates of income tax, it is becoming increasingly difficult for many people to achieve any significant measure of annual savings to provide for their retirement.

“As a result, the position

in . many cases will be that people who should be able to look forward to well-earned retirement will find themselves having to continue working, and even where the benefit of universal superannuation becomes available in such cases the Government will still be able to call for payment of ordinary income tax of up to 12s in the £ on the amount of any benefit. “It cannot be doubted that

taxation rates which are disproportionately high must have a restricting and depressive effect on the energies and enterprise of people,” she said.

Mr P. A. Steele (Karori) urged that the emphasis in taxation be placed on spending rather than earning. He urged the Government to transfer a portion of income taxation to purchase tax on luxury goods.