PRICE WORTH PAYING

Wairarapa Times-Age, 28 September 1939, Page 7

PRICE WORTH PAYING

BRITISH EMERGENCY BUDGET TREMENDOUS INCREASES IN TAXATION. CHANCELLOR'S PROPOSALS. (British Official Wireless.) (Received This Day, 10.20 a.m.) RUGBY. September 27

Opening the discussion on the Emergency Budget in the House of Commons. Sir John Simon (Chancellor of the Exchequer) said he was unable to say if the £500,000,000 vote of credit adopted in the first days of the war would be sufficient to cover the country’s requirements to the end of the financial year. They would now be facing a total outlay of 2,000 million pounds ami on the other hand the original estimates of revenue, which up to the outbreak of war showed every sign of being realised and even exceeded, must now he revised downwards.

Revenue on the basis of existing taxes was unlikely to exceed 890 millions. It obviously was impossible to provide, for the whole of the expenditure in the war by taxation. As regards borrowing, the time had not yet come for the issue of a new national loan.

Sir John Simon announced that the standard rate of income tax would be raised to 7s 6d' in the pound after the present financial year, during which the rate will be 7s. There will be reductions in existing allowances. He must propose a new code to secure increased contribution from direct taxation all along the line, taking as his aim a code of taxation commensurate with the effort involved in a war of not less than three years. As the basis of a new income tax scheme, his proposal was subject to recon-, sideration next April. Sir J. Simon made the following changes in current taxation: —Income tax to have immediate effect at 7s in the pound. Considerable reductions in all allowances having the purpose of abating the full charge in respect of smaller incomes. Income tax changes estimated to produce an extra 70 million pounds this year and 146 millions in a full year. Surtax increased to yield an additional five million pounds this year and eight millions in a full year. Estate duties increased by ten per cent up to £50,000 and by twenty per cent on larger estates, bringing the maximum rate on the largest estates to - sixty per cent, and yielding six millions in a full year. Sir J. Simon said the proposals for an unprecedented burden were only justified by the severe sacrifices which the situation demanded.

Proposals affecting indirect taxation were a penny a pint on beer, giving eleven millions this year and 27 millions in a full year; an increased duty on spirits yielding two millions this year and 3| millions in a full year; increased duties on wines and tobacco, giving nine millions this year and eighteen millions in a full year; a penny a lb on sugar, giving 8) millions and eighteen millions. Finally, Sir J. Simon announced a duty at the rate of sixty per cent on any excess over profits for a pre-war standard period as an alternative to the present national defence contribution. All the additions' to taxation, taken together, were estimated by Sir J. Simon to bring in 107 millions this year and £226,500,000 next year. The Chancellor ended by declaring: “If the price of victory be high, it is a price worth paying. It is the price of our liberty and of all that makes life worth living in Europe and for ourselves.”