B-6

regardless of the parents' income—and the two reductions in taxation rates, with the increased exemption for a dependent wife. The combination of these factors gives the following result: —

It will be observed from this last group, that a taxpayer with an income of £5OO and a dependent wife and three children would have a residue after payment of all income taxation during the financial year ended 31st March, 1946, amounting to £421. The amount which will be available in the same family during the current financial year will be £521. This additional £lOO represents an increase of 23 per cent, over the sum available during 1945-46. The rate of income-tax on companies will be restored to that which applied up to March, 1942. Companies will thus pay the basic rate of company income-tax plus 15 per cent., and will also pay social and national security tax at the reduced rate of 2s. in the pound. The effect of these reductions gives a much more favourable incentive to increased production than existed under the higher war rates of tax. This is demonstrated from the following table which shows a comparison of the amount available after payment of income-tax, social and national security tax.

36

Fixed Gross Income. Residue Last Year, after Payment of all Income Taxation. Residue for the Current Year, including £26 per child Family Benefit, and including £50 per child exemption. Increased Residue. Taxpayer with dependent wife and one cMld £ £ £ £ 400 334 378 44 500 403 454 51 600 470 528 58 800 600 670 70 Taxpayer with dependent wife and two children 400 342 412 70 500 413 488 75 600 480 562 82 800 612 706 94Taxpayer with dependent wife and three children 400 376 J, 438 62 500 421 & 521 100 600 490 ill 596 106 800 624 , 742 118