The Dominion FRIDAY, AUGUST 17, 1917. THE NEJW TAXES

Dominion, Volume 10, Issue 3165, 17 August 1917, Page 4

The Dominion FRIDAY, AUGUST 17, 1917. THE NEJW TAXES

•THh vory f„ii explanation of the proposed new laud and income tecs wnioh the Minister of Finance gave to Parliament is most illuminating in one particular at least. The tables showing the amount proposed to be levied ns Compared with the amount last year make it clear beyond all question that a remarkably heavy addition is to bo made to the taxation of those with large incomes. There are still people, apparently, who aro ready to repeat in parrot fashion the old complaint that still heavier taxation should bo piled up on the big landholder. Those who continue this crv in faco of the proposals outlined 'by Sir Joseph Ward are either incapable of recognising the lengths to which the Government has gbno in tho matter or have lost-all sense of what is just and economically sound and prudent, When the State, bv way of taxation, takes 15s. out of every pound of income of a citizen it is getting very close to the point at -which it robs the citizens of the,_ incentive to increase or even to maintain his earning power. No doubt this extremely high rate of taxation mentioned bv the Finance Minister by way o"f illustration of the extent to which the wealthy aro to be taxed, does not apply in many individual cases, but it is a fair indication of the scale on which the (Javernment has framed its taxing proposals. The imposition of Ijoth land and income tax on such I substantially-increased scales will j mean a heavy drain on tho farming community, for they will be doubly hit. ' ■ "

The tables published in yesterday's issue of The Dominion showing the amount of land tax and income- tax that will be collected in given cases under the new proposals require a little explanation. The land tax can bo roughly estimated by adding 50 per cent, to the amounts of taxation in the table. That is to say land the taxable unimproved value of which is £1000 will have to carry the tax of £4 3s. 4d. set out in the tabic, plus £2 Is. Bd., or £6 isJßd. in all, and if tho owner'ssincome exceeds £300 he will have to pay income tax as well. And so op. with the other cases stated. Each amount requires to be increased by 55 per cent, to discover, the amount of land tax to be paid. But in his Budget_ statement. Sir Joseph Ward promised to make certain concessions in the case of poorclass land subject to mortgage, and in his spccch'on Wednesday he again.; mentioned that something would be done to relieve the burden on the smaller farmers whoso land is subject to mortgage. Exactly what these concessions are will not bo known until tho taxing Bills are introduced. The income tax tableis more easily explained. The tablo printed in our issuo of yesterday gave the amount of income, the taxable amount, tho rate of taxation and tho total tax. For tho purposes of ordinary income tax the rate starts at 6d. in the £ on incomes between £300 and £650, and then increases at the rate of one-two hundredths of a penny for each additional £l of income. Thus it goes up Id. for every £200 of additional income, until it reaches 3s. in thc£ at £6400. But it should bo noted that the exemption of the first £300 of income is not maintained throughout. This exemption is extinguished at the rate of £l for every £l of income over £600, so that it is" lost to tho taxpayers at £900. • A man with an income'of £600 only pays taxation on £300; but a man with £650 pays on £400, the exemption in his case having been reduced to £250; a man with £700 pays on £500, tho >-xemption having dropped another £r>o; and so it goes on until incomes of £000 are reached, after which taxpayers will be called on to pay on the full amount of their incomes. This applies to the ordinary income tax. The special war tax differs to this extent, that it is apparently intended to allow the £300 exemption in all cases. This tax is to be based on the same rate as tho ordinary income tax, plus 50 per cent. That is to say, whereas the ordinary income tax will start at 6d. in the £ and end at 35., the special war tax will start at 9d. and end at 4s. 6d. The two added together make- the minimum rate of is. 3d. in the £, and the maximum of Vs. Gd. By way of illustration wo may quote a few examples:

Note.-v-Tho Special War Tax is computed on the ordinary income less the £300 exemption. The illustrations given go to showhow tho progressive rale of taxation swells Uiu proportion of income taken in taxation as tho income grows in size. Tho rato of tax on £400 is

(id. in Uio £; on £650, (id.; on £750, 7d.; on £1000, 9t1.; on £2000, Ts. 2d.: on £5000. 2s. 5t1.; on £(1000, 2m. 10fl. To fchuso ;imoiint,s of course have In be added Iho war tax rates as explained above. It is well 1.0 hear in mind that in estimating tliu_ amount of taxation to he paid on incomes over £600 the full exemption of £:SOO should be allowed for 'undcv the special war tux rate It is noticeablo that Sir" Joseph Waiid, in explaining the new land and income taxes, made- no reference to his intentions regarding the taxing of the shareholders of joint stock companies. It may be hoped, however, that he has the matter under consideration, for if the profits of the companies are taxed on the high scale set out above, a gross injustice will be done to a great many persons of moderate means. It is obvious that tho revenue from land and income taxation under the proposals outlined by tho Finance Minister is going to run into an enormous sura.

■ '■ ' i s 8 S°2 3« h Z* fi B§0 OB ttl? BB £ £ £ B. d. .€ S. (1. £ 6. (I. 400 UO 2 10 0 3 15 0 6 5 0 650 " 400 10 0 0 13 2 6 25 2 6 750 600 17 10 0 16 17 6 34 7 6 1000 1000 37 10 0 32 10 7 70 0 7 2000. 2000 116 13 4 132 16 3 249 9 7 5000.. 5000 604 3 4 807 16 3 1411 19 7 MOO .. 5000 850 0 0 1157 16 3 2007 16 3