THE PAYER MUST SAY

Evening Post, Volume CXXXI, Issue 121, 24 May 1941, Page 8

THE PAYER MUST SAY

At one time the man who came in a lower income group could feel that higher public expenditure, provided it were reasonably prudent, was generally beneficial to him. He paid less of'the taxation and received more of the benefit. An analysis of individual incomes and taxation thereon published by the Government Statistician provides evidence that that day is past. From now on the man in the lower income groups will not be able to accept the benefits of public expenditure carelessly with "he thought that, even if the spending gives a return of less than twenty shillings in the pound, it is someone else's pound. The lower income man will have to scrutinise expenditure in the light of the fact that he has to pay for it. He will have to ask himself whether he would rather have the pounds to spend himself—say in painting or maintaining his home— or allow the State to spend them on some public work, near or remote, of less direct value to him.

The statistics published do not give a complete or up-to-date picture. They relate to taxation on income for the year ended March 31. 1939, and the only war impost included is the 15 per cent, addition to income tax. Social security and national security taxes are not included, nor, as the figures relate to incomes, is there any reference to additional sales tax and other similar items. But some of the items are significant of the trend of high expenditure, which means high taxation. For example, as compared with the previous year, the taxable balance of incomes increased by £3.022,991 (or 13.2 per cent.), while #!ie fax assessed was £1,481.751 higher for 47.4 per cent.), or. deducting the war tax. £880.408 highci Cor 28.1 per cent.). The State did not take all of the gain in taxable balance but, with the war tax, it took nearly half of it.

Another significant fact, from the tax-collector's and taxpayer's viewpoint, is that there were 261 fewer returns for incomes of £1000 and over. The equaliser of individual incomes may applaud this, and say that there were 41.784 more taxable incomes under £500 and 1259 more between £500 and £1000. But there is a consequence to take into account also. If the tax-collector has fewer incomes over £1000 from which lo take a lot, then he must take more from the smaller incomes. Another comparison made by the Statistician emphasises this point. In 1938-39 taxpayers in the £200-£4OO groups had 57.3 of the total assessable income; in 1939-40 they had 61.5. To meet war demands (and these comparisons show little of the war effect) more of private income must be taken. When the rate on large incomes is already at the maximum and large incomes are not. becoming larger or more numerous, obviously more of the tax must be collected from the smaller incomes. The war must be paid for, but: the recipients of small incomes must say how much non-war spending they want—for they will have to pay a large^part of it.