BRITAIN'S FINANCIAL BURDEN.

Hokitika Guardian, 24 September 1917, Page 4

BRITAIN'S FINANCIAL BURDEN.

(Overseas Leaflet..) Some people seem to think that because Britain is a land of enormous wealth the British people are not making any real sacrifice in the war. It is not easy to indicate the extent of Britain’s contribution to the economic resources of the Allies, because the figures are so large as to be almost beyond the reach of comprehension or imagination. When Mr Bormr Law, Chancellor of the Exchequer, moved his last vote of credit for 500 millions sterling on May 9, 1917, the daily expenditure of (he United Kingdom stood at £7,450,000. The total expenditure during the entire period of the war down to April ', 1917, was 4,318 million pounds, of which unimaginable sum ),'37 millions bad been provided out of revenue as distinct from loans. During the last ti nanc ia 1 year no less than £574,428,000 was raised in revenue—

that is, a sum over 37-1 millions greater than the pre-war revenue at its highest figure. It is highly satisfactory that 2(1 per cent of England’s entire wartime expenditure should

iave been met out of revenue oi

axation. During the two years anil eight mouths of the'war ending April I, i!M7, England ‘financed her Allies and Dominions, but chiefly her Allies, to the extent of about 1,000 million pounds sterling. Dut these figures, as I said, are too large to convey any distinct idea to the ordinary mind. We want to know bow this colossal expenditure affects the individual, bow, for example, the man with a modest income is affected by these huge figures of expenditure and taxation. It is calculated that the war is costing each person—man, woman and child —in the United Kingdom 3/ per day, of which 2/3 is being borrowed, leaving Del to be raised by taxation. In order to illustrate -this figure it should he rnentionecTthat the average ndivicinal consumption of goods and services in England amounts, or amounted before the war. to about 2/4 pet- day. Or, in other words, the taxation due to Ihe war imposes on an average upon every person in the United Kingdom a contribution in taxation equal to about one-third of his entire expenditure before the war.

Let us see for a moment how these new millions of revenue are raised. Income tax, which was about 9d or If before the war, is now 2/3 up to £SOO a 3'ear, 2/6 between £SOO and £I,OOO, aiid 5/ over £2,500. That

is for earned incomes. Unearned incomes reach the maximum of 5/ at an incoine''exceeding £'2,000. In addition, there is what is known as the super-tax, which begins on incomes over £O,OOO. The ordinary citizen is not fortunate enough to he affected by these grades of taxation. It may be interesting, however, to indicate approximately wln.fc a per.sou with, say, £21,000 per annum bus to pay. in iucome tax and super-tax ho is charged, on present war rates, £7,Odd 3/4. But this, of course, is not. nearly his entire contribution to the revenue. There is the whole range of indirect taxation and the numerous additional channels through which the country is made to contribute to the sinews of war. The incidence of the income tax has been lowered during the war to a figure of £l3l a year, so that many of the working classes are now paying this impost. To take a specimen case or two, a man with no children, earning 55/ per week, will pay income tax to the extent of a little more than 12/ a quarter. A man, with no children, earning £3 per week, pays 10/ quarterly. The reduction in the assessment allowed on each child would, of course, reduce such incomes below the minimum of income tax payment. But direct taxation accounts for less than half of the tax revenue of the State. Since the war, great increases have been made in indirect taxation. Ungland, being a free trade

country, lays her import duties on a narrow range of commodities not produced within her own shores, though she has added to the list a few manufactured goods, such as motor cars and musical instruments, during the war. The tax on cocoa has been raised from Id to (id per pound, on coffee and chicory from under 3d to (Id ; the price of sugar, the supply of which lias been taken over by the Government, has risen to a figure undreamed before the war. Owing to (lie enormously increased taxation the cost of- tobacco is now 100 per cent higher than before the war. Hitherto it had been consideied as heterodox to tax matches as to tax window space, but the Chancellor of the Exchequer in 19 Hi imposed a tax of •M a thousand on these indispensable articles Another big sum is beingraised by what is called the amusement tax. A twopenny seat in a picture theatre pays a tax of a halfpenny ; a teu-and-sixpenny seat in a theatre or concert pays one shilling. Theatres, fool ball matches, horse races—all such entertainments bring grist to the national mill.

The tax collector waylays the citizen at many other points. For instance, railway travelling was rather heavily taxed during J9i(>, and since the beginning of 191 7 railway charges have been increased by 50 per cent. The object ol' this, however, is not to make money, but to discourage all needless public travelling. One need only mention increased duties on mineral waters and motor cars, high duties on tea and tobacco, and higher postage and telegragh charges. How does all this affect the person with, say, £SOO a year ? Income tax will account for an additional charge on that sum of over £22, but such a person is chiefly hit by the enormous rise in general prices due to taxation, increased freight charges and the general influence of war conditions. This rise of at least 50 per cent in cost of living, duo directly to the war, means a sacrifice of about £l5O on an income of £SOO. For, it must be remembered, everything has obeyed the upward tendency in price, from newspapers to doctors’ and dentists’fees. Insurance, fire premiums, and the like have risen owing to the higher cost of building materials. It is quite a mistake, then, to imagine that the Englishman is not feeling the war or making any personal sacrifice. Even the game of war-profiteering has been severely handicapped. The excess profits tax—that is, the tax on profits higher than a pre-war average—was raised in 1917 to b'U per cent, which means that, taking income tax, super-tax and excess profits tax together, the profiteer will be handing back to the State well over 90 per cent of his war profits. It will be seen, therefore, that .Britain is contributing not only an enormous naval and military strength to the Allied cause, but is mobilising her money-power effectually for the same great purpose. —MU' ——l I I I I I A