Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-06-20
The BRITISH CRISIS.
XXXV.-The Income Tax.
By Frederic J. Haskin.

g.
June Americans will have experienced
the novelty of paying an income tax
The experience, however enjoyable or
distasteful will be confined to those who
have an annual income of more than
$4,000 or in the case of unmarried per-
sons, Of more than 5000.
Our British cousins are much more
generous in affording opportunity to pay
this sort of a tax to a greater proportion
of the population. Every Englishman
who has an income of $500 year must
pay an income tax on all income in excess
Of that amount. After this year the ex-
emption will be reduced to $500. This
abatement. however, does not continue,
but is decreased gradually until, when the
income is more than So, 500 a year, none
of it is exempt, and the tax must be paid
on the whole amount.
Furthermore, a distinction is made be-
tween earned and unearned incomes. so
that person who receives his income
from investments pays a greater amount
of tax than he who receives money in the
form Of salary or for work actually done
The graduation of the income tax, I'M
like that of America, applies to the whole
income. For instance, the surtax in the
American income tax on incomes above
$4,000 applies only to that part of the
income above the ty-thousand-dollar
mark. while in England the similar super
tax applies to the entire income without
exemptions or attachments.
The income tax in England has shown
a great many fluctuations since 1854 but
in the "a s
Forms Good Part thirty years
Of British Revenue. tansona, o"n q
idly to increase. and since 1860 has
been depended upon for a very large
part of the British revenue. The new
budget introduced last month not only
increases the rates. but makes changes
in the graduations.
For instance, John Jones, having an in
come of $500 year, being married and
having two children, will pay an annual
income tax of 500 Under our system,
of course, he would pay no income tax
at all,
John Smith. having an income of
IS, 900 a year, if he lived in the United
of SO. Living in Great Britain he
would pay, if he earns his income $1S1 80.
II he should be so fortunate as to de-
rive his income from investments and 1t
should be regarded as unearned. his in
come tax would amount to $3.50. 80, or
more than thirty-three times as much as
all American income tax.
Let us go up a step higher. Take the
man with an income of $4,000 in the
United States. He would pay an income
tax Of $50. If the same man should
move to England he would pay $3.50.
Above $4,000 income no distinction is
made between unearned and earned in
come of $4,000 pays a tax of 5000
From man who has an income of half
a million dollars year the income tax
collector will collect $4,000.
x
The annual budget of the United King
dom is now just about $1,000, oO0, 600, or
the same as
Annual Budget Now that of the
About 81, OOO, 600, 600 ernmsnt gov,
the United States. There is. of course,
because the British budget includes so
many expenditures that in the United
States are taken care of by the state and
city governments. The influence of the
income tax on the total, however. forms
an interesting comparison.
The most that Is expected of the new
income tax in the United States is
that it shall furnish S100,O00,OOO reve-
nue. a year. or one-tenth of the total
amount required for the annual ap-
preparations. In Great Britain the in
come tax produces about S300.000,000
year, or nearly one-third of the total
revenues required.
In addition to this, the death duties.
or inheritance taxes, produce about
$160,0O0,O0O a year toward the upkeep
of the British nation. Inheritance
taxes in the United States are levied
only in some of the states and ade-
quate. comparison is impossible, al
though the British tax Is much greater
than has ever been proposed in this
country.
The death duties begin on any es-
tate passing on the death of the
owner the value OF which exceeds
$500 On these small estates the tax
is l per cent. and it increases grad