Deja vu for Sants income tax proposals
The income tax proposal dished out by Labour leader Alfred
Sant on Saturday is not as original as it seems, with both Dom Mintoff
and George Borg Olivier having made similar proposals in the 1971 and
1976 general elections.
In the 1971 manifesto the Labour Party had undertaken to reform income
tax and proposed the Pay As You Earn (PAYE) system by which
income tax is deducted at source by the employer. However, the manifesto
declared that when the proposal would be put into effect "everyone
will get a years grace from Income Tax."
The 1971 election also saw the Nationalist Party propose the abolition
of income tax by "not later than the fourth year" of the legislature.
However, the manifesto undertook to alleviate the income tax burden
on married couples and single persons by raising the non-taxable portion
of income, until the proposal would be implemented.
Despite the attraction of abolishing income tax the Nationalist Party
still lost the 1971 election which saw the Labour Party return to government
after nine years in the wilderness.
The income tax carrot was used once again in the run-up to the 1976
election when the Nationalist Party manifesto reiterated the pledge
made five years before to abolish income tax. Describing income tax
as a revenue system that hampered economic growth the manifesto spoke
about the need to reform the system.
As it did in 1971, the Nationalist Party once again proposed a number
of measures to alleviate the tax burden until the eventual abolition
of income tax came about. One of the proposals, which the PN undertook
to implement immediately upon election was to exempt farmers and fishermen
from income tax, which is similar to a proposal floated about by Alfred
Sant last week.
The Labour Party won the1976 election, which also proved to be the last
election contested by Borg Olivier, who was subsequently replaced by
Eddie Fenech Adami.
The only difference between the proposals announced by Alfred Sant and
the electoral pledges made by Dom Mintoff and George Borg Olivier in
the seventies is that the initiatives announced last Saturday do not
feature in the MLPs electoral manifesto.
The manifesto as approved by the general conference speaks in broad
terms about the need to cap taxation without entering into the specifics
of how the exercise would be conducted.