El Paso herald. (El Paso, Tex.) 1901-1931, 1913-05-19
England Taxes All Incomes
Law Makes Difference Befvvea,
Earned and Unearmed Income~
EOempting All Under EIGO
10y Frederic J. Haslzfn-
"J I teuerle J. Hasllin-
AsHINGToN, d. C., Nay 10

ny Ee0erle J. HasEfn-
SKI ASHINGTON, D. C., Nav -
wy Nowhere else in the world
IS there afforded a better pic
ture Of the operation of the income rsr
than in England. In its present gen
eral shape it has been levied for
period Of nearly three-quarters Of a
century, and during that time the
natural objections 10 such a tax have
been on the Wane until it has now be-
come a part Of the permanent fiscal
policy OF the United Kingdom. The
tax is now levied on incomes aggre-
eating nearly S9,000,O00,O0O.
There are those who complain about
1t and inyeigh against it, some going
as far as TO say that il is the most
humiliatlng tax ever put upon a gen
erOus nation others that il possesses
a maze Of averages and bases of cal
culaIlon InaI make II sealed book
to any lay mind, and still others who
assert that there is infrequently any
thing about its administration that is
creditable and often much that is
tyrannicaL But the general verdict
seems 20 be that the tax is a neces-
sary eY4 and about as satisfactory as
one could reasonably expect.
No SGlaried Assessors.
Perhaps the most influential element
in freeing it from general complaint
is the fact that the original assessment
of the tax Is made by nOnSalaried rep
people have confidence in these men,
and feel that they are, in a sense, their
own representatives They are largely
clrcumScrlDed as to their duties, and
their work is carefully checked UP by
the representatives Of the British treas
ury. This combination Of centraliZa-
ton and local rule prevents any
charges OF bureaucracy on the one
hand and any loss Of revenue by assess
ments made too low on the other
By utilizing a happy system OF
choosing what are known as additional
commissioners from the ranks OF the
business community for the purpose Of
assisting in the assessment Of the tax,
the cooperation of the business com
mUnity is secured, and but little trouble
is experienced in securing proper as
sessment Of business incomes
Not Subjected to Quiz.
Another striking phase of the ad-
laws is the absence of inquisitOrial pro-
cedure. The British authorities steer
a middle course between the laxity that
makes law more hOnOred IN Its
breach than in its observance, on the
one hand; and the rigidity of enforce
ment that defeats its own purpose on
the other.
The British authorities aim to col
leCt all possible income taxes at their
source rather than to allow them TO
go into the hands Of the taxpayer and
be accounted for by him For in
stance, here is a man who has an IN
come of 10000 pounds which comes as
dividend earnings in some utility cor {
porauon; the governments share Of
that income is deducted from the pay |
ments before they are made. That is /
taxation at the source, and II seems TO |
bear down more easily upon the tax I
payer than if he had to reach down Z
in his pocket and pay it
Tax Is Percent.
The British government has kept the |
tax down TO about 6 percent and most l
British citizens are represented as i
willing TO pay a shilling a pound on I
their income. The British income tax
laws of today do not burden all classes
of income alike They assume that
not every sort Of income is equally wen
able to bear the same burden Of taxa
ton, so there has come about a system
Of differentiation which meets these
objections. imposing the heaviest taxes
upon those incomes most able to bear
them and the lightest taxes upon those
classes Of incomes least able to meet
them As 1t became evident that great
incomes were being built up 1t began
to be generally felt that the man with
a 10000 pound income was able 10 pay
a higher rate than the man with
500 pound income, and so the supertax
was brought in. Thus has England
gone forward grating onto the old
tree all the new branches that progress
demanded, until today her income tax
laws meet English conditions and ad-
just the burdens Of taxation in a gen
orally satisfactory way.
Graduation Of Incomes.
It is interesting TO follow the present
high development of the income tax
system in England during the past
quarter Of a century, or since IL be-
came permanent national policy. Be
fore that time there had been a con-
slant improvement in methods Of ad-
as a result Of an unremlr-
ting effort to correct all unsatisfactory
conditions, but the great improvements
perhaps date from the early SOS. At
that time there arose a demand for a
graduation Of incomes, a demand rath-
I
One step after another in the inn
DrOvement Of the law was taken, some
affOrding attachments on small in
comes others having 10 DO WIN
fraud, savings bank accounts, and the
ike, until finally, in 1907, chancellor
Asquith came out uatfOOIedly for a
system Of differentiation He com
pared two men, each with an income I
Of 1000 pounds the one deriving his
from q perfectly safe investment and
he other from precarious profession.
and declared that TO say that each
should pay the same tax was to fly
ntO the face Of justice and common
sense. He thought that incomes ought 7
20 be divided into two classes, earned
md unearned incomes. the one repre-
senting the personal labor of the tax
PAYER and the other a simple sitting
still and allowing the money 10
,Ome in. ]
Reduced Taxes on Earned Incomes.
The result of his recommendations S
vas that law was enacted which re- {
PARTIALLY earned incomes below 1000 c
pounds to nine pence, while on un- g
armed incomes 1t remained at a shill- I
ng a pound. 1t is interesting to note I
hat although the tax on earned in !
Omes was reduced by One-fOurth, q
here was no loss OF revenue as a re-
ult. It was claimed that this was be- q
ause the people who had earned in
ONES felt that the government was a
rying to do right by them and that Q
ne good turn deserves another. Inc y
English authorities regard this diff j
erentiation between earned and un- Z
armed incomes as one of the best 9
tops in the perfection of the national 2
ncome tax law. And yet III was a step {
esisted for years by such great states 2
len as Gladstone. II
Small Incomes Are Exempt.
With the necessity Of securing ad- 7
itionaI revenues to finance the old
&c pensions scheme before them, the
British authorities were forced TO {
onsider a plan Of income tax gradua-
ion in the shape of a levy of a higher
ate upon all incomes in excess of 5000
ounds. This is assessed in the shape )
f a suDertaN of six pence per pound.