New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1907-05-04
MR.. ASQU[TH'S BUDGET
Financing Social Questions at the
Expense of Inherited Wealth.
London, April IS.

!
! Budget an event of paramount Importance. The
! Labor party with trades unionism behind it,
cannot be put off indefinitely with evasions and
platitudes. year ago 1t acquiesced when Mr..
Asquith pleaded for time for introducing re-
trenchment and putting the Treasury in order
after a wastefuI period of Unionist extrava
gance. This year it is critical and impa-
! tent when excuses are offered for dilatory meas
ures. The Labor members are Indifferent to the
claims of income taxpayers for a reduction of
| burdens. They are not interested in financial
arrangements for increasing sinking funds rails
ing the price of consols and scaling down the
national debt. They are unwilling TO have social
! reforms blocked by lack of money. When there
is an available surplus of considerable magni-
tude they unite in declaring that a beginning
! should be made of a system OF old age pensions.
! If their policies cannot be carried out under X
| listing conditions of Free Trade finance, they
will face about and find out what be done
for them with tariff manufactured goods,
| The tariff reformers already bidding for
| their support by declaring that old age pensions
and other democratic reforms cannot be hoped
! for without largely increased revenues from in
| direct taxation. Mr. Asquth has known that
! this may become the dominating issue at the
next general elections. He has perceived tho
necessity for proving that the financing of social
| questions under Free Trade is not a hopeless
| undertaking. If he has not been able to report
| a direct start with old age pensions he promises
! that something will be done next year The
| Liberal government will only restore ma
| tional credit by debt paying and retrenchmen.
but 1t will also march boldly into the uncon-
quered territory of social reform under the
Free Trade flag
What is described as a democratic budget re-
duces taxation on earned incomes less than
tZ,oo, and makes up the losses by increased
death duties on large estates These changes
are in line with one Of the two recommendations
or the select committee of which Sir Charles
Dixie was chairman The committee favored
the graduation of the income tax so as to give
increased relief to persons of moderate means
and also differentiation between earned and m
earned income. Systematic graduation is de-
ferred apparently to another budget Prefer
entail treatment Is accorded to a large class
of people OF moderate incomes, as dstin-
guished from property owners holders of In
vestments The tax is left at shilling for all
incomes over 5000 and three pence will be
taken off all earned incomes below that level
In addition 10 all other attachments There will
be n lower rate for lawyers doctors civil SER
wants. merchants or manufacturers whose earn
ings are dependent upon personal effort and
there will be a higher rate for those receiving
incomes from Investments. dividends or house
property. 1t is a rough process of dirrerentia-
ton by which one class continues To he heavily
bled In order that another class may be relieved:
and the losses are made up by increased death
duties and the creation OF what are styled super
taxes on millionaire estates The burdens If
income esrners are eased up on the theory that
their capital ceases with life. whereas invest
ments and real estate remain after death Tho
grip OF the Dead Hand Is strengthened upon
large estates until II becomes fairly predatory.
Mr.. Gladstone, while a convinced Free Trader.
never liked income taxation. He considered II
unjust in operation. and II he had been sup
"orted I'm one or his appeals the country no
= lght have taken 1t off altogether. or AT least
nave reduced # to a low point Lord Avebury.
who in his confidence has explained that
the substitute for it would have been largely in
creased death duties. The kingdom since Mr.
Gladstone was at the treasury has been paying
a shilling income tax so long that It has ceased
10 be regarded as a war tax. and ar the same
time the estate, legacy and succession duties
have been enlarged with cumulative effect until
they yield annually more than the income tax
used to do when II was eghtpence on the pound
The existing death duties by which l per cent
OF estates less than $500 and ) per cent of those
over 100000 be claimed by the treasury
while legacy duties range from to 10 per cent
may properly be described as a deferred income
tax and graduated scale. The estates when
passing In succession distributed by will are
forced TO pay what is equivalent TO All income
tax ranging from sixpence 10 a shilling over a
term of years. Sometimes the same estate IS
tapped twice in single year. Sir Frederick
Wigan Bart. recently died. leaving an estate Of
f530.00O. and his eldest followed him in tho
course Of few weeks and in consequence Of
two SUGGESTIONS about 10000 will fall into the
treasury. The death duties Sir William
Harcourt left them involved fairly complete
graduation OF large incomes With the new
system Of increased percentages on estates over |
100000 and super taxes on estates over |
Fl 100000 until on the late Lord Allendae's in |
vestments and properties 10 per cent is taken on
the first million and Is per cent on every sue
cessive million there will be a comprehensive |
system Of differentiation between earned and in
herited incomes with brokerage for the state on |
enormous scale.
Mr. Asquith's budget is the most experimental !
and speculative one of recent years. He an |
preciates the uncertainties of his forecasts and
estimates and supplements them with sweeping |
proposals for administrative changes and i'm
proved methods for appraisng and collecting
the income tax. The processes of differentiation |
between earned and unearned incomes will be |
most complex when It is generally conceded that |
those derived from professions. trades and mer- |
camille business represent about 20 per cent of
the entire yield and while the limitation of the |
abatement of threepence to earned incomes |
under e 900 shuts out all the largo fortunes. It
is fairly certain that the methods of admlnlstra-
ton will be more inqusitorial and vexatious. |
The increased returns from higher death duties |
and super taxes" on millionaires' fortunes are |
likely to prove a serious disappointment from !