Manawatu Herald SATURDAY, AUGUST 4, 1917. THE INCOME TAX.

Manawatu Herald, Volume XXXIX, Issue 1744, 4 August 1917, Page 2

Manawatu Herald SATURDAY, AUGUST 4, 1917. THE INCOME TAX.

THE Auckland Herald says it is regrettable that the new rales of income lax are exceedingly complicated, for simplicity is a most desirable quality in luxation proposals. Comparisons with last year’s rates are almost impossible except in the case of the loAver incomes subject to tax. Last; year the rate of tax avus Od on incomes up to £7OO, the scale being graduated from this point up to incomes of £5,G00, Avhieh Avere (axed at the rate of 2s per £. There was then an addition of 33 1-3 per cent, to the taxes ascertained by the above rate, and, finally, a special Avar tax of Gd on taxable incomes up to £9OO, and Is on all higher incomes. The 33 1-3 per cent, tax has doav been swept away. The other lavu taxes remain, hut both are more equitably graduated. In the ease of the special Avar tax, the graduation Avill considerably. alter the incidence of the taxation, particularly in the ease of incomes Avhieh Avere near the margin-line of last year’s some’what (-rude levy of Gd up to £9OO and Is thereafter. Another new revenue-producing feature is the graduation of the exemption. Previously all incomes Avere subject to an exemption of £3OO. Noav the full exemption is to be given only on incomes up to £6OO, From that point the exemption is to gradually decrease, and Avill disappear at £9OO. W T here the income exceeds £9OO, taxes to be paid on the full amount. The result arrived at by the neAv scales is an all-round increase in-the rate of tax. In the case of the lowest taxable income,

the increase is Id, and there is a gradual rise on all taxes until a maximum of 7s Gd is reached. The following table supplied by our contemporary compares lire last year’s rate with the new rate:—

It will bo noted that the incidence of the new lax falls most heavily on largo incomes. An income of £4,000 will pay at the rate of 5s per £, ami as there is no exemption the Treasury will draw £I,OOO. An income of £6,400, which is assessed at 7s Gd per £, will pay a t ax of £2,400. From the two sources Sir Joseph Ward expects, to raise £4,G00,000. The pre-war revenue from income tax was under half a million i;i 1013, and in its highest year only readied £554,271: In HUG cthe total was £1,392,119, and this year it was £4,202,120, including the excess profits tax. The latter tax is now abolished, but Sir Joseph ■ Ward hopes to draw from the new income taxes the whole of the revenue thus abandoned and an additional £337,874.

Ineomo. Last Year’s Rate. New Rate. ’c s. d s. d. 400 .; ' I2 .. 13 500 . 1 2 .. 1 4} . 000 .. 1 2 .. 151 800 .. 1 3 ..18 1,000 .. 1^ 5 .. 1 101 1,190 ... 1 '5 ..2 1 1,201 .. 2 1 .. 2 1 1,700 .; 2 0 .. ' 2 2,300 .. 2 8 ... 3 2ii 3,500 .. 3 0 .. 4 5J 4,700 .. 3 4 .. 5 24 0,400 .. / 3 8 .. 7 0