Income Taxation on a New Scale

Sun (Auckland), Volume I, Issue 137, 31 August 1927, Page 1

Income Taxation on a New Scale

BILLS BEFORE HOUSE HIGHER TAX ON LOW INCOMES (THE SUN'S Parliament ary Reporter.) WELLINGTON, To-clay. The perplexed income tax computeis have been set a poser by a combination of the new scale of income tax in the Annual Land and Income ax Bill introduced into the House of Kepreservatives last evening by Gov-ernor-General’s message, and an Amendment Bill reviewing the exemption scale. . +0 „„ I The effect is to increase the taxation on incomes up to £5,900 by making the fractional increase heavier. _ The following table shows the tax payable on chosen incomes up to £I,OOO under the new schedule.

The new scale preserves the limits of 7d and 4s 6d as in last income-tax Act, but it mounts in finer income groups—takes shorter steps so to speak. The new schedule is 7d on every taxable pound up to £3OO as before, but from £3OO to £1,500 it is 7d plus 1-000 of a penny for every £1 over £3OO. From £1,500 to £3,900 the rate is Is 7d over £1,500. From £3,900 to £5,900 the rate is 3s Id plus 1-100 of a penny for every £1 over £3,900. For incomes over £ 5,900 the rate is 3s lid, increased by 4-100 of a penny for every £1 over £5,900 until .it reaches 4s 6d, where the tax remains stationary. , . . . The old rate was 7d on taxable incomes up to £3OO, 7d plus 2-300 of a penny, reaching 3s 9d on incomes of £ 6,000. _. rA 0 4 The taxes payable were: ~«u, it 7s 6d: £SOO, £5 16s 8d; £550, £7 os lOd: £6OO, £8 15s; £650, £l2 los od; £7OO, £l7 7s 2d; £750, £22 10s; £BOO, £2B 3s lOd; £BSO, £34 8s 10d; £9OO, £4l ss; £950, £44 17s ~d; £I,OOO, £4B 12s 2d. The Amendment Bill provides for a new sealing down of the exemptions. The clause states that the reduction shall begin at £450 instead of at £6OO under the old method. The exemption in the Bill stands at £1 for every £2 in excess of £450, up to £750. and then £1 for £1 until £9OO is reached. . Besides the 10 per cent, reduction ot the levy for earned income up to £2,000, which continues, there are in force a £SO exemption for each child or grandchild under IS years who is dependent on the taxpayer, a further £SO exemption for the support of a widowed mother, and a maximum of 15 per cent, on life insurance premiums, superannuations, and similar contributions.