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Wednesday, 17 December 1941

Mr CHIFLEY (Macquarie) (Treasurer) . - in reply - My personal view is that no deduction should he allowed in respect of tax paid to a State. It is recognized, however, that Commonwealth income tax on the higher incomes is a very severe impost.

Mr Jolly - That is true also of the income tax imposed in some of the States.

Mr CHIFLEY - Yes, but it is not true of all of the States. The Government was influenced by the fact that Commonwealth taxation on the higher incomes is very solid, and it believed that some concession was justified.Were it not for that I, personally, would have advocated that no deductions should be allowed at all, though in saying this I am not speaking on behalf of the Government. This tax is designed for a specific purpose, namely, the financing of the war. The responsibility for financing the war rests on the Commonwealth Government. It is true that the burden is borne by the people, but the Commonwealth Government is their agent. Whether it be for air-raid precautions, or for anything else connected with the war, everybody holds out his hand to the Commonwealth Government.

Mr Fadden - The varying methods of State taxation constitute a very big obstacle.

Mr CHIFLEY - That is true.

Mr Spender - Why not abolish the

State Governments?

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