CAN IT BE AID?

Evening Post, Volume CXXIII, Issue 123, 26 May 1937, Page 10

CAN IT BE AID?

Last year the Government took in taxation from the people the great sum of £26,941,000, which is £5,384,000 above the tax yield of the previous year. This excluded unemployment taxation and all forms of local government rating. Taxation for national purposes, including'unemployment taxes, will probably be found-;,to amount to £31,000,000. There was a surplus of £472,000, but the Acting Prime Minister's statement suggests that this will be required to meet the added cost of social services, higher wages, and shorter hours when these have to be paid for a full year. This means that the Government will begin the new year without an actual margin for new expenditure. The question therefore arises: Can new commitments be made? Income tax and land tax rates have been raised and raised so much that a downward adjustment is urgently called for, especially in the land tax on urban businesses and the income tax on companies. The Government is pledged to abolish the sales tax, which yields £3,000,000. Where can it obtain more revenue to replace the sales tax, to adjust land and income taxes, and to meet new expenditure? Luxury or semi-luxury imports are for the most .part under such heavy duties that an increase would probably diminish consumption and reduce the revenue return. Taxation of necessaries would be against the policy of the Labour Government. The position has been reached when the Government must seriously ask itself whether it can afford to go further without imperilling its own programme. Some time > ago the Minister of Industries and Commerce warned the Labour Party Conference against pressing demands for fresh benefits at the risk of increasing production costs in industry. CostSj are still" increasing and diminishing profits. Higher company and land taxation cuts at profits from the other end. There is distinct danger of a fall in the reservoir from which taxation is drawn. The Government cannot be insensible of this. Its own experience in business must be a warning. As we pointed out yesterday, the lower return of interest suggests that the business departments of the (Government have been affected and can pay less into the Treasury. Private business must be affected more or less in the same way. In housing, again, the Government has found that costs are such that it cannot build dwellings to let at the low rentals expected of it. Costs are costs, and though there may be some reduction through the use of cheap money or "costless credit" (we have not been told all about this yet), in the end the bill must be paid. If such big schemes as national health insurance and superannuation are to be undertaken, even upon a modest scale, there must be a foundation of flourishing industry. The taxpaying capacity of the public must be conserved and'this can be done only by. modifying the demands so that the expansion of industry and production is, not hindered.