THE HOME INCOME TAX.

Evening Star, Issue 12883, 4 August 1906, Page 9

THE HOME INCOME TAX.

The Select Committee of the House of Commons appointed to inquire into the practicability of graduating the Income 'l]ax and of differentiating, for the purpose Of the , tax, between permanent and precarious incomes (Sir C. Dilke presiding), recently examined Mr W. Gayler, Chief Inspector \ of Stamps and Taxes under the Board of Inland Revenue, who gave evidence as to the effect on the working of his department of a system of *uper-taxation of high incomes* At present, he said, four-fifths of the Income Tax were raised by indirect assessment—namely, taxation at the source of income—and only one-fifth by d.rcct at> essment. An added tax on individual incomes over a certain amount would be wholly raised by direct asses ment. and would re-; quire a large addit.on to the Inland Bevenue staff. A declaration of income would be re- | | quired in every case, and very stringent in- , quisitorial powers would be required in.order to bring in all who would be earning an income subject to the extra tax. The as- I sessments to house duty would not be aj satisfactory guide to the assessors. From j Sart.culars obtained from the Estate Duty ftice, he showed that in a large number of cases the rent of the house in which a man j lived afforded no trustworthy indication of wealth. He knew a case of a man who had I left £220,000, but who during his lifetime j had occupied a house of £65 rental next door to a surveyor of taxes, who had not the si glitesi idea that his neighhor was a wealthy man. Another man living in a hotue of £45 rental was a partner in a London firm enjoying an income of £5,000 a ( year. They might find such incomes among | occupiers of houses with a rental as low as , £4O. The case of Chicago Smith living in J one room in a club was well known to the Committee. The Income Tux a-thorit e would require very full details of income in order, to reach everybody pus.eseit ui .. income of over £5,000 a year. A return , from all public companies showing the | dends they paid and the persons to whom . they were paid would have to be 6upph_ed ' to the authorities; and there were 40,000 public companies and corporations paying , dividends, debenture interest, and interest . on loans. Some millionaires took their in- ! comes from a multitude of sources. He mentioned one case in which a millionaire took a dividend of £3 2s 6d a quarter from Conols. Revere powers of investigation, such as were given in pome of the colonies and in Germany, would he required; and owing to the difficulty, among others, of tracing income from foreign it would be necessary to have the same powers of inspecting bankers' books as were enjoved by the Court* in certain cases. At present one-third of the limited number of Income Tax payers who were required to make returns did not make them. In order to ensure returns being made it would he necessary to have a continuing penalty in case of neglect. Asked what he thought of the proposal, coneern.ng which Sir Henry Primrose had been examined, of having a uniform maximum tax, from which abatements would be claimed as at present, th abatement beginning at a much higher figure than £7OO per annum, witness said this would impose on Somerset Horse a feirful task; it would be impossible to work such a 6vstem. Late witness said, with regard to"a graduated Income Tax on incomes over £5,000, that the difficulties would be very great. Of course, the authorities, witli sufficient staff aiid the neces ary powers, could do anything; bvt they were told now that the Income Tax was immoral and objectionable. What would be thought of it then he could not undertake to say. The witness was examined in private on the subject of evasion of the Income Tax, and 1 the Committee adjourned.