NEW TAXATION

Rotorua Morning Post, Volume 2, Issue 460, 18 February 1933, Page 5

NEW TAXATION

APPROXIM ATE INCREASE . IN COST of LIVING l A TYPICAL CASE Apart from a general discussion on the imposition of the increased rate of exchange and saies tax, few have seriously considered the increase which will be occasioned in the weekly budget. It is however a question on which no general basis can be quoted with -any aeeuracy, since the weekly expenditure of one person differs widely from that of another according to personal tastes and other circumstances. Although many will without doubt disagree with the conclusions arrived at hereunder, some idea of the increased expenditure may be gained by taking as a basis the case of the average man earning £5 a week, and on the assumption of course, that the full wage is spent weekly. It will be seen that the new taxation proposals will entail an increased expenditure of 'six shillings a week. / Unaffected Expenditure Assuming that rent, which ik not affected by the extra taxation, he 25s a week this represents an amount of £65 a year. Add to this other unaffected items, for instance, insurance £10; light and fuel, which at 5/- a week equals £13 a year, unemployment tax on £260 a year, £13, unemployment levy £1 and entertainment at 5s a week, or £13 a year, and the total of these items unaffected by the exchange or 'saies tax will total £115, which when subtracted from the gross income of £260 leave^ £145. On a conservative basis it may he assumed that 25s a week is spent on food. Some of the items making up this amount are directly or indirectly affected by the exchange -rate, but are exempt from saies- tax, while there are other lines of expenditure besides food which are not greatly affected. A further deduction of £65 may therefoi-e he ^made \*rom the £145 in hand, leaving an amount of £80 as the total on which it is considered the increase in exchange and the saies tax will0 operate. . It has been estimated that the increase of 15 per cent in exchange will result in -a rise of 10 per cent in priees- of goods affected by it. This tax therefore will operate before the imposition of the saies tax and will increase our £80 to £88. Add to this total the saies tax of five per cent and the total increases to £92 8s. Making provision for allowances 'and to pefmit working in round figures the amount may he taken as £95 or an increased expenditure of £15 aimually, representing 6s a week. As stated earlier, the position has been shown on'the assumption that the wage-earner banks nothing from his weekly income Should he do so the amount must correspondingly be reduced, but should he he the owner of a motor car th'e amount would be increased on account of the imposition of a,n additional fourpence petrol tax, which will increase running costs correspondingly.