The Waikato Times With which is incorporated The Waikato Argus. FRIDAY, APRIL 26, 1918. GREAT BRITAIN'S BUDGET

Waikato Times, Volume 89, Issue 13751, 26 April 1918, Page 4

The Waikato Times With which is incorporated The Waikato Argus. FRIDAY, APRIL 26, 1918. GREAT BRITAIN'S BUDGET

The increased taxation which Mr Bonar Law proposes in the Budget now submitted to Great Britain amounts to £67,000,000, and though this may not be a great sum, when we compare it with the total war expenditure, it must be recognised as a genuine effort to meet the difficulties of the times. When we read the details of the proposed taxation we are impressed by the magnitude of the sacrifices which well-to-do people are called on to make. Incomes between £SOO per annum and £2500 per annum pay 6s in £ incometax; above that figure they pay 10s 6d in £. As the possessors of these incomes are subject, like all others, to vsfrious forms of indirect taxation, it must be admitted that in Great Britain they have made an approach to that conscription of wealth which appeals so strongly to the many people who dearly love a catch phrase. In addition to these increases in direct taxation, there are increases in, the duty on tobacco, beer, spirits, sugar and matches. Evidently Mr Bonar Law has "recognised the justice of the complaints that his previous Budget failed to deal adequately with the situation, and such complaints are not likely to be repeated. We should, however, expect to hear something on a point about which we are not advised by cable. Mr McKenna, when Chancellor of the Exchequer, lowered the rate of exemption for income tax and made an attempt to collect it from those who were earning weekly wages of such a large size as brought them within the liability to taxation. Unfortunately the method proposed was not well calculated for the purpose, for the taxpayer was called on to make a return of his earnings and pay the Lax thereon by quarterly instalments. As the process was entirely novel, and at the same time foreign to all the habits and customs of weekly wage earners, it has not proved a success; the Government have not obtained their tax, and they have sued a large number of workmen, which is in itself a regrettable course to embark upon. It has been pointed out that if the tax were collected from the employer, who in turn would deduct it from the wages, the payment would be made in the manner most convenient to the. taxpayer, and at the same time the Government is likely to receive considerably more revenue from this source. We have pointed out on many occasions that the increased necessities of the State will lead to much greater attention being paid to the principles of taxation than has hitherto been done. In one respect we seem to be ahead of Great Britain. If we are to accept the statement in the cable it would appear that at £2500 the income tax rises from 6s to 10s 6d in the £, without any system of graduation. This is a barbarous and antiquated method of taxation, and it is difficult to believe that it is still in vogue.

A few days since we were advised that the German Imperial Budget had been presented, and contained the first genuine attempt to do anything towards meeting the interest on the mountain of debt which they, like all other combatant countries, have created. Their additional taxation was said to amount to £158,000,000 per annum, and as they had previously imposed about £25,000600 ef increased taxation, it would represent a rise from £150,000,000 to £335,000,000, compared to Great Britain's rise from £200,000.000 to £775,000,000. We are often toid that democratic countries will not make such ■sacrifices as autocratic countries. Such statements can seldom be brought to proof, but in the realm of finance Great Britain certainly need not fear comparison. The war debt of Germany is approximately £5,000,000,000, the interest on which at 5 per cent, would be £250,000,000. The new taxation imposed by Germany since war began is less than £200.000,000, and therefore comes far short of interest on the debt. We think it is only too probable that the German Government hesitate to face the odium of high taxation. The legend of the willingness of ppople under autocratic rule to make sacrifices for the State might receive a rude shock.

At the samn time that Great Britain is making such stupendous efforts to meet the cost of war, Sir Joseph Ward has advised us that he does not propose any increase of taxation. His method of paying the whole of war expenditure from loan lias made it well nigh impossible for him to do otherwise. He now talks of floating a further loan of £20,000,000 towards the end of the year, although he has £13,000,000 in hand from previous loans and £3,000,000 surplus from the Consolidated Fund over and above the £7,000,000 invested in London. As a surplus may he expected again this' year, we suggest that 1m- should abandon the idea of another loan and utilise the surplus in the Consolidated Fund. There i» a serious danger of locking up too much of the country's resources in the hands of the Government. There is not the slightest occasion to stint j the authorities of the means necessary I

1o the carrying out of our duly, but on the other hand the financial part should be handled in such a manner as to cause the minimum of inconvenience to the country, and our contention is that so far from this being the case, that unnecessary inconvenience has already risen,, and is likely to reach considerable lengths unless an alteration is made in our methods of finance.