XN000022-1989-07-19 — Page 17

WEDNESDAY, JULY 19, 1989

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NOTING THAT THERE WERE ARGUMENTS FOR RETAINING THE WORKING WIFE ALLOWANCE. MR WENDICK SAID THE MAJOR FLAW IN THIS ALLOWANCE WAS THAT IT DISCRIMINATED IN FAVOUR OF A MARRIED COUPLE WHERE BOTH THE HUSBAND AND WIFE WORK.

TO

IN PARTICULAR, IT PROVIDES THEM WITH A GREATER ENTITLEMENT ALLOWANCES THAN IS AVAILABLE TO A SINGLE-INCOME FAMILY OR TWO UNMARRIED PERSONS WITH THE SAME INCOME.

"FURTHERMORE, AS A MATTER OF PRINCIPLE. AN ALLOWANCE SHOULD NOT BE BASED ON THE CONCEPT OF ITS BEING COMPENSATION FOR ANY ADDITIONAL FAMILY EXPENSES INCURRED AS A CONSEQUENCE OF THE WIFF TAKING Ul'

EMPLOYMENT.

"SAVE

ITS USE AS AN INTERIM RELIEF MEASURE PENDING IMPLEMENTATION OF SEPARATE TAXATION, THERE ARE NO GROUNDS FOR PROVIDING WORKING MARRIED COUPLES WITH AN ADDITIONAL ALLOWANCE THAT IS NOT AVAILABLE TO TAXPAYERS IN GENERAL, HE SAID,

+

THE ACTING FINANCIAL SECRETARY NOTED THAT CONCERN WAS EXPRESSED THAT SOME MARRIED COUPLES WOULD PAY MORE TAX UNDER SEPARATE TAXATION THAN THEY WOULD HAVE PAID ON THE SAME INCOME HAD THE AGGREGATION SYSTEM BEEN RETAINED.

A

THIS CONCERN WAS BASED ON A COMPARISON OF THE TAX PAID BY MARRIED COUPLE UNDER THE INTERIM WORKING WIFE ALLOWANCE PROVISIONS WITH THAT WHICH WOULD BE PAYABLE UNDER SEPARATE TAXATION, MR NENDICK SAID.

"ONE OF THE REASONS WHY A FLAT RATE WORKING WIFE ALLOWANCE COULD NOT BE ADOPTED AS A PERMANENT SOLUTION ΤΟ THE SO-CALLED

MARRIAGE TAX' IS ITS INABILITY TO DEAL WITH THE PROBLEM EQUITABLY ALL LEVELS OF INCOME.

"[N IN

PARTICULAR, WORKING WIFE ALLOWANCE FAILS TO PROVIDE TAXPAYERS WITH SUFFICIENT RELIEF TO NEGATE THE FULL EFFECTS OF 'MARRIAGE TAX' WHILE IT GIVES OTHERS A TAX BENEFIT EXCEEDING 'TAX'.

AT

SOME

THEIR

THEIR

"IT IS CONCEPTUALLY INCORRECT TO COMPARE THE TAX PAYABLE UNDER THE INTERIM RELIEF PROVISIONS WITH THE TAX PAYABLE UNDER SEPARATE TAXATION TO EVALUATE THE EFFECT OF SEPARATE TAXATION ON VARIOUS CLASSES OF TAXPAYER5," MR NENDICK EXPLAINED.

HE POINTED OUT THAT THE MORE APPROPRIATE YARDSTICK WAS TO COMPARE THE TAX PAYABLE UNDER THE LEGISLATION PRIOR ΤΟ THE INTRODUCTION OF THE INTERIM RELIEF MEASURE WITH THE TAX PAYADLE SEPARATE TAXATION.

UNDER

ENENG THIS COMPARISON THE MAJORITY OF TWO- INCOME COUPLES WILL. OVERALL. PAY LESS TAX.

ARE AVAT

MARRIED

FOR THOSE ADVERSELY AFFECTED THE JOINT ASSESSMENT PROVISIONS

ABIT TỪ ALLOW THEM TO CONTINUE TO BE ASSESSED JOINTLY,

/"THUS,