The Great War Part 198, June 1st 1918

262 The Great IVzr A few days later Mr. McKenna then Chancellor of the Exchequer made a distinct innovation in national finance. Hitherto one Budget a year had been deemed sufficient, and the taxpayer could at least be sure of a years interval before new burdens were put upon him. But so rapidly was the cost of the war mounting soup quickly were the proceeds of the big loan being exhausted so distant seemed the prospect of peace that the Coalition Ministry then in power decided to impose new taxation forthwith not to wait until the end of the financial year six months later. In one direction this supplementary Budget itself a novelty introduced a novel idea intonational finance but in others and especially with regard to the income-tax it followed precedent and that precedent just the line of least resistance, the excess profits duty. From all sides there came stories exag­gerated perhaps but by no means wholly imaginary of persons making huge fortunes from the possession of ships the manufac­ture of munitions of war the sale of necessary articles of food and in other way sand the Chancellor The novelty was L an gfier SIR ROBERT KINDER SLEY K.B.E. Appointed Chairman of the National War Savings Committee on its constitution in 1916. of the Exchequer could certainly rely upon the support of public opinion when he proposed that these fortunate persons should overpay to him 50 percent of their excess profits. Roughly .speaking excess profits were defined as those made in excess of the profits as shown by the income-tax returns made in 1913-14. There were however, and alterations too technical J z. was now charged 25 4s. To produce still more from this fertile plant the limit of exemption from the tax was reduced from 160 to 130 and a corresponding reduction made in the amounts allowed as abatements. Farmers were asked in future to pay tax on their full rent not on one- third of it as before unless they preferred to be taxed, as other traders were on their actual profits. The some­what complex rates of super-tax were revised the highest being increased from 2s. 8d. in the pound to 3s." 6d., although they were not paid on quite the whole income, but only on its excess over 2500. The other changes affected indirect taxation. The duty on sugar was raised from is. iod. to 9s. 4d. a cwt. tea, tobacco cocoa and coffee were to pay 50 percent. more. Users of motor spirit and patent medicines w'ere asked for _________________ contributions and so were the purchasers of motor-cars motor­cycles cinema films and one or two other things when imported from abroad. The public was asked to pay more for its postages, telegrams and telephones. The result of these changes was to add so the authorities estimated TREASURY CHAMBERS WHITEHALL. S W I 7+^ jl -——^* '_ THE CHANCELLOR'S APPEAL. Reduced facsimile of the appeal to the people of Great Britain to buy War Bonds issued by Mr. Bonar Law, Chancellor of the Exchequer in February 1918. the financial year various concessions for discussion here. The Chancellor counted on 6000000 from this new duty for the current financial year but thereafter on a much greater sum. The returns were soon to show that he had here tapped avery productive source of revenue. The income-tax was raised not as usual by so many pennies in the pound but by 40 percent. and the new scale came into operation for the financial half-year beginning October 1st. In practice it meant that 20 percent. the half-years proportion of 4.0 was toadded every man’s assessment. If he had originally been charged 21 he V andy k .MR. GEORGE A. SUTTON. Appointed Director of Publicity to the National War Savings Committee, November 1917. another 107000000 a year to the national revenue but of that sum only 33000000 would be collected during the year 1915-16. However certain taxes were producing more than was forecast in the earlier Budget and so the total revenue for the year could be put at 305000000. So far so good but on the other side were an estimated expenditure of 1590000000 an estimated deficit of 1285000000 and a net National Debt of 2200000000. No increase of taxation however severe could meet such an outlay and further borrowing was soon necessary. First of all a little was obtained from the United States. To that country both Great Britain and France owed a good deal of money and this liability was very detrimental to the rate of exchange which was then moving steadily against the European countries. Accordingly a loan for 500000000 dollars at 5 percent was arranged the two countries borrowing the money jointly. But this 100000000 of which Britain only got apart
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