INCOME TAX

Dominion, Volume 2, Issue 511, 19 May 1909, Page 7

INCOME TAX

.—« _ PERMANENT, AND MIGHT BE EXPANDED CAPITAL'S BURDEN. MR. ASQUITH REPLIES TO BANKERS. (Dt TELEQBAPB—PBESS ASSOC.ATION—COETBiaHT.) , (Reo. May 18, 9.15 p.m.) London, May 18. In tho Budget debate (increased income tax) in the Houso of Commons, Lord Evelyn Cecil (Unionist) emphasised the letter sent by leading bankers and merchants to the Prime Slinister, objecting to the new taxes, including the increased income tax and death duties and the reduction of the "sinking fund payments. Mr. Asquitb, Prime Minister, in his reply, cited admissions in tho hankers' memorial and their statement that tho signatories were prepared to bear their share of tho increase in taxation. ' He argued that in view of ,the oxtra burdens falling upon liquor and tobacco, the burdens proposed to be placed upon capital were not excessive. He was not awaro of any other method of raising these burdens more equitably. Mr. Asquitb. added that the taxes projected in France and the existing' Prussian super taxes were'higher than those proposed in the Budget. Ho reviewed the history of the income tax, and declared that he, when Chancellor of the Exchequer, had removed the most glaring anomalies by distinguishing between earned and unearned incomes; and ho now regarded the permanency of the tax absolutely with an untroubled conscience. Ho believed: that tho income tax was capable of still wider expansion in the event of an emergency. The Commons adopted tho'income tax resolution. ■ EFFECT OF THE BANKERS' PROTEST. STATEMENT BY THE '"DAILY;MAIL." London, May 17.:■"' ; ■ The, "Daily Mail" states that, the letter, of protest from tho leading bankers and merchants to the Primo Minister, Mr. Asquith, with regard to now taxes in ' the Budget, has/produced an effect in the country almost unparalleled, and has carried deeper conviction because, of 'its emanating from financiers of immense knowledge and experience, and owing to the fact that several .of the signatories, aro prominent Freetraders, and others strong Liberals. • Apart from this, tho, wealth of the private banks and the authorised capital of others represented- amounts to ' £213,143,000, of whinh. amount £55,000,000 has been paid up.

THE UNIONIST-ARGUMENT. -_In 1907 a departure was made by the Liberal Government from the shilling income tax, discrimination being made in favour of earned incomes to this extent: In the case of incomes not oxecoding .£2OOO. a relief of 3d. in the £ was allowed on earned income, the earned being thus a m! d <£ °. d ' m ths •*• al >d the unearned at Is. . J* lo , Unionist 'argument is that the income tax should be reserved as a war tax, and thej doomje tiiat it was so reserved until 1842, when Sir. .Robert Peel imposed. upon a peaceful country, to make possible his scheme of Freo- . trade, and no doubt it appeared poetically just to that astute statesman that the propertied class, upon whom Freetrade was destined to in:flict the heaviest blow, should pay a double penalty for their thrift and industry." To this Mr, Asquith replies that there is still a margin left to expand the income tax in case ' of emergency, and that capital is not unduly taxed, and he cites Continental figures. , Prussia has a graduated income tax. In.the lowest grade—incomes of £&■ to .£52 10s a year-a tax of fls: is paid. In an article on Continental income taxes, Mr. T. P.' Mannins 'Writes: . v. .'.■ .:■-•■' In Saxony an. income as low as .£2O pays Is. : £ f , J O3 - wae » >*• "aches' JiUO-still below Britain's exemption liniit- : the payment is £2 165.; while incomes of .£SOOO ; upwards pay 5s per cent., or Is. in the pound. • .. .Striking an averago,' 1 tho northern and central' European countries have a tax of about 4Jd. in the pound on incomes of. £200 a year ,n ? d J »fn e n ne « l,y f b ? nt one-t'iird moro on incomes of pOO, though in some places it is double : Many countries make a distinction between earned and unearned incomes, all in favour of the.worker,,with the exception of Spain, whore the earned income pays the higher tax.