BRITAIN’S FINANCES

Dominion, Volume 36, Issue 23, 22 October 1942, Page 5

BRITAIN’S FINANCES

Chancellor Expresses Satisfaction HIGHER TAXATION (British Official Wireless.) RUGBY. October 20. Moving a supplementary vote of credit of £1,000,000,000 for the war, the Chancellor of the Exchequer, Sir Kingsley Wood, said that the new vote would make a total of £4,000,000,000 this year and £12,050,000,000 since the outbreak of war. ■Since 'September 9 the average daily x expenditure had. gone -up_ £SOO,(XX) a day. and was now £12,750,000 daily, including £10,500,000 on the fighting and supply services. The Chancellor said the credit now a«ked for, together with the balance remaining from the £1,000,000,000 voted in September, should last till February. It was possible that we -had now passed the period of striking increases in the rate of war expendi- \ U Comparing the half-year ended September 30 with the last year, the Chan cefior said that though the expenditure was higher by £300,000,000, th amount we had to borrow was *‘o,ooo, 000 less. This was partly as a result ot the receipt of £155,000,000, the Canaaian Government’s generous contribution, but was mainly because of the higher ana unprecedented level of taxation. The revenue was doing very well, born absolutely and by comparison with last year. The total volume of personal savin* was increased quarter by Charter, bu this did not mean that the problem ot financing the war on sound hues would take an easier turn or that we could relax any of our efforts. On the contrary, as the war progressed and we exhausted accumulated nest eggs and other capital sums available for investment, we had to use other means of replacing them.

Still Greater Savings.

In this, still greater savings from current income and still greater economies in the absolute avoidance of all wasteful expenditure must take a high place. A decent and proper .standard of livin o "was obviously essential, hut if we insisted on spending for spending s sake, instead of saving to the greatest extent possible, we would endanger a sound economic structure. , . The Chancellor announced the decision to make a supplementary issue of certificates in January at a definitely lower rate of interest The purchase price would be £1 and the value would increase to 23/- after ten years, an equivalent overall interest rate of £l/8/2 per cent, tax fl Sir Kingsley sa/d: “We are entering the fourth year of the war with little cause for dissatisfaction at the financial position.” The total expenditure for 193942 was about two and a half tunes as great as 1914-17, hut the amount raised bv taxation was four times as much, representing 40 per cent, of expenditure, compared with 21 per cent. Moreover, the average rate of interest on the increase in debt so far in this war had.been only 24 per cent, compared with o per cent, in the last war.

WIDER U.S. TAX NET Lower And Middle Income Groups

(Received October 21, 10 p.m.) WASHINGTON, October 20.

The Senate has completed Congressional action to the measure raising the pay of the women’s army auxiliary corps, the lowest from 21 to 50 dollars a month, and higher ranks correspond--lUThe House of Representatives, by 130 votes to two, approved the report of the joint conference on the record, high war taxation Bill.* Later, the Senate completed Congressional ac-

tion on this Bill. . Treasury experts estimate that. tne measure will bring in 6,882,000,000 dollars in new funds. , , The chairman of the Mays and Means Committee, Mr. Doughton, told the House that the measure would yield 10,000,00V,000 dollars gross, and 8,000,000,000 net. Roughly tVvo-thirds of the new revenue will come from individuals. In the lower and middle income brackets, the total taxes will be multiplied many times. The new combined normal income tax and surtax rates will take 19 per cent. of the first taxable dollar of individual income above exemptions and deduction*. On top of this’is the 5 per cent, victory tux on all earnings exceeding 624 dollars a year. Because of the Victory tax and the reduced exemptions on the regular income taxes, it is estimated that there will be 44,000,000 individuals on the Federal tax rolls, compared with 2b,000,000 at present.