N
THURSDAY, APRIL 13, 1978
HE GAVE THE FOLLOWING COMPARATIVE FIGURES TO ILLUSTRATE HIS REMARKS.
ANNUAL
TOTAL INCOME
OF A MARRIED COUPLE WITH TWO CHILDREN
EFFECTIVE RATE OF TAX (IN PERCENTAGE)
HONG KONG SINGAPORE
MALAYSIA UNITED KINGDOM
HK$25,000
$35,000
$70,000
O
4.2
4.44
14.16
0.64
6.71
8.06
19.83
8.21
14.93
18.21
27.24
REFERRING TO THE WORKING WIFE ALLOWANCE, MR. HADDON-CAVE ARGUED THAT SUCH AN ALLOWANCE WAS NOT EQUITABLE +BECAUSE WHERE FAMILY CIRCUMSTANCES - INCLUDING INCOME - WERE THE SAME, A MARRIED MAN WITH A WORKING WIFE ENJOYED AN ADVANTAGE OVER THE MAN WHOSE WIFE DID NOT WORK, AND THIS ADVANTAGE REMAINED UNTIL BOTH WERE PAYING TAX AT THE STANDARD RATE.+
+1 ARGUED, FURTHER, THAT TO BASE AN ALLOWANCE ON THE CONCEPT OF THE ADDITIONAL COST OF MAINTAINING THE HOME IN SPECIAL CIRCUMSTANCES OF PERSONAL CHOICE OFFENDED THE PRINCIPLE, THAT, IN A SYSTEM OF TAXATION, ALLOWANCES SHOULD BE VARIED ACCORDING TO THE CONDITION OF, AND THE STANDARD OF LIVING EXPECTED OR ENJOYED BY DIFFERENT CLASSES OF TAXPAYERS.+
TO RECTIFY THIS INEQUITABLE SITUATION, MR. HADDON-CAVE SAID THE BASIC ALLOWANCE FOR ALL WIVES WAS INCREASED FROM $7,000 TO $10,000 IN 1973 AND THE SPECIAL $3,000 EXTRA ALLOWANCE FOR A WORKING WIFE WHICH WAS INTRODUCED IN 1970, WAS CANCELLED.
+THE WITHDRAWAL OF THIS SPECIAL EXTRA ALLOWANCE FOR A WORKING WIFE, ACCOMPANIED BY THE INCREASE IN THE BASIC ALLOWANCE FOR ALL WIVES, IN EFFECT MEANT THAT ALL WIVES WERE ASSUMED TO BE WORKING WIVES AND MANY WIVES WOULD CERTAINLY CONCUR WITH THIS VIEW, + HE SAID.
HE ALSO POINTED OUT THAT THERE IS NO EVIDENCE THAT THE REPEAL OF THE WORKING WIFE ALLOWANCE IN 1973 LED TO WIVES BEING DETERRED FROM WORKING DUE TO THE ABSENCE OF ANY FORM OF TAX RELIEF.
+OF A TOTAL OF OVER 200,000 DEMAND NOTES FOR SALARIES ISSUED IN 1977-78, ONLY 39,600 INVOLVED WORKING WIVES, OF WHOM ABOUT 34,500 WOULD HAVE DERIVED BENEFIT FROM A WORKING WIFE ALLOWANCE.
/+THE REMAINING