Now that details of the White Paper issued by the British Government in connection with the last Budget are available it is possible to form some idea of the burden which Sir Kingsley Wood, Chancellor of the Exchequer has laid upon the taxpayer as his contribution towards paying for this war. The reduction of the exemption limit from £120 to £110 has naturally meant that a much larger number of Britons are paying income tax than ever before, but as the amount paid by this class will be returned as a credit after the war, they are not in fact losing their money but being compelled to save and lend it to the Government. With regard to the excess profits tax the law ds to be amended with regard to the treatment of borrowed capital arising from wasted assets and other matters, and, while the excess profits tax will be paid at the rate of 100 per cent., 20 per cent, will be regarded as a credit to be returned to the payer after the war in such manner as Parliament may direct. It is believed that Parliamentary control of this refund will ensure that the money will be devoted to post-war reconstruction.
A study of the tables showing the effect of the application of the income tax upon earned incomes ranging from £120 to £100,000 per annum shows that it is mot until incomes are around the £4,000 mark that the full tax of 10/- in the pound becomes collectable. From then on the surtax comes into operation, with the result that single man having an income of £5,000 pays £2,837 in taxes, with a post-war credit of £60 while if he draws £100,000 a year he will pay in taxation the enormous sum of £94,174 with the same credit. If he is married with three children he will pay £94,069 with a post-war credit of £65. He may be entitled to further reliefs which would reduce the tax, but the general impression to be gained is that the fact of having a family does not give the relief which would in the circumstances seem more equitable.
The general effect of these provisions is that as compared with the previous year the £100,000 a year man will be paying £7,500 more than he did during the previous twelve months. In other words, while last year that man would have an effective income of £13.453, under the new Budget it will only amount to £5,931 or just under six per cent. of his earnings. It is apparent from the above few figures that a great levelling process is in motion, and that the spread between the smallest incomes and the largest is being greatly reduced. What the general effect of this will be on life in Great Britain only the full operation of the new taxation over a year can possibly indicate but that it will tend to a more modified form of living seems to be inevitable. Lord Kindersley, president of the National Savings Committee, has pointed out that the Budget called for.—and was rightly designed to do so,—more drastic self-denial by everyone. In some cases it may mean definite hardship. "But," he said, "the mass of the people will call to mind the sacrifices being made by our Forces on their behalf. We must all of us cut down our comforts ^before we think of reducing our saving:
The total estimated expenditure for 1941- 1942 is £4,206,957,000 the excess of expenditure over revenue amounting to no less than £2,420,597,000. What the national debt will be by the time this war is brought to a victorious conclusion 't almost passes the capacity of imagination to conceive. One thing, however, is certain. The manner in which the British taxpayer has accepted the new burdens, the criticism still to be heard tha' all avenues of raising money have not been fully explored. both suggest that he will carry on to the very last ditch no flatter what the cost is to be, for no price "is too high to be paid for freedom.
Text read from the printed page and cleaned; old type leaves the occasional error.