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Tuesday, 25 November 1941

Mr CHIFLEY (Macquarie) (Treasurer) . - I assume that a man earning £2,000 a year, in the position which the honorable member has mentioned, would have been in receipt of that income over a number of years. Such people would be expected to make proper provision for the payment of income tax.

Mr Calwell - This man will have to pay £1,300 tax, and his income next year will be about £500.

Mr CHIFLEY - I agree that the increased rates of tax may result in his having to pay a much higher amount of tax than he expected.

Mr Calwell - The tax will result in a capital levy. Is the Treasurer going to adopt that as a principle?

Mr CHIFLEY - It is generally agreed in this House that people who earn over £1,500 a year should be obliged to contribute heavily to the revenue of the country, on the principle that those who have the ability to pay should bear the heaviest burden of tax. We could not estimate the ultimate effect of granting concessions to taxpayers in the circumstances mentioned. As the Leader of the Opposition has said, in exceptional circumstances a man has the right of appeal to the Hardship Board of the Taxation Department. A Treasurer who attempted to provide in the act for circumstances such as the honorable gentleman has mentioned would make a laughing stock of himself.

Mr Calwell - It means a capital levy.

Mr CHIFLEY - That might be said of all taxation on high incomes. The polite name for taking 16s.8d. of every £1 of a taxpayer's income is " taxation ", but some people have other names for the process. The Minister assisting the Treasurer (Mr. Lazzarini) has submitted an amendment to this clause in order to protect persons whose combined Commonwealth and State taxes would otherwise amount to 23s. 6d. for every £1 of income. The honorable member for Henty (Mr. Coles) referred to such cases inhis speech in the budget debate, and we have had some striking cases of hardship and injustice brought before us; for these reasons we have drafted the amend ment now before the committee, which provides for a rebate when Commonwealth and State taxes combined amount to 18s. in the £1. The Hardship Board has full powers to deal with such cases as the honorable member for Melbourne has mentioned.

Amendment agreed to.

Clause, as amended, agreed to.

Clause 23 (Undistributed income of company).

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