Dear Editor,
The unions are attempting to achieve a pay increase for our vastly underpaid public servants, but what use will a 10% or other increase make if the tax threshold remains at eighteen thousand dollars,the pay increase will simply be swallowed up in paying taxes again.
What the unions should be doing is demanding that the tax threshold be increased to thirty or thirty five thousand dollars and thus allow public servants to take home a bit more pre tax money. After the tax threshold increase is achieved, the unions can then a bit later demand salary increases for the public servants.
Yours faithfully,
Bryan Mackintosh
Editor's note
The tax threshold at the moment is $l8,000 a month. After taking that off, the first $l34,000 of chargeable income, or $ll,l67 per month, bears tax at the rate of 20% and the remaining income is taxed at a rate of 33-l/3%.
If a worker therefore earns $30,000 a month his tax is calculated as follows: deduct tax free income of $l8,000 a month leaving $l2,000. Of that, $ll,l67 (l/l2 of $l34,000) bears tax at the rate of 20% = $2,233.40, and the remaining $833 at 33-l/3% = $277, a total tax of $2,5l0.40 a month.