Evening star., 1929-12-01
BRITISH FINANCIAL
ANX|ETIES KEEN
Budget Increases Threaten
Incomes With Danger of
Flight of Capital.
BY A. G. GARDINER.

8y Radio to The Star
LONDON, November 3O-Growing
anxiety prevails in regard to the out
Look for national finances.
The failure of the government to deal
with the unemployment problem is now
fully disclosed, and j. H. Thomas, min
1ster OF employment, who was charged
with the task of finding a solution, is
IN manifest despair and is now the most
discredited member of the government
Unemployment has risen substantially
since the Macdonald government was
elected and all omens point to fur
ther increase.
Meanwhile the government is laying
formidable new burdens on the taxpay-
ers. This week there will be a second
reading of the new unemployment in
surance bill, which would add another
$60,000,000 to the cost of the dole.
This, along with enormous additions to
widows pensions, already practically ap-
proved in Parliament, and with other
social palliatives contemplated, means
that Chancellor Philip Snowdsn, in his
coming budget, will have to meet new
expenditures amounting to 5000 900 900.
This comes in the face of a tremendous
fall in values resulting from the finan-
cial slump, which is having a disastrous
influence on the countrys trade.
Subject of Much Concern.
The question of how the chancellor
can raise new revenue from the depleted
resources of the country is a subject of
much concern. Something like SEN
sation was created this week by dis
credited speech by Minister of War
Shaw suggesting that, in view of the
debated currency, the RENTER class had
no moral right to the 100000 900 paid
them in interest for loans issued during
the time of currency imitation. Snowden
had promptly repudiated any idea Of
interfering with the national credit,
but the gravity of this task is generally
recognized. It is understood that he
intended to revive land taxes, and that
the main burden of new taxation must
fall on the income tax and super taxes
which have never declined much below
the war standard.
The income tax still is Shillings on
the pound and the super-tax goes up an
other shillings, making the total taxa
ton for the rich equal to half their in
come. Already the yield from the su-
per-tax has begun to decline, and with
the calamitous fall of values owing to
the financial collapse, further decline
is regarded as certain. The view of eX-
perts is that taxation of the rich al
ready has reached its maximum point
of productiveness and that a further
increase only will intensity the eXercis-
ing of legitimate methods of evasion
already being largely practiced in the
formation of trusts in favor Of children
or relatives.
Regarding the income tax, it is gen.
orally held that further turn of the
screw is unlikely to do anything but
mischief 1t is argued that the only
effect will be to increase the fight of
capital from England which is already
creating diSquiet. Not only rich but
small renters are going abroad to avoid
taxation, with the loss of not merely of
direct taxation revenue but of indirect
taxation on consumption. AS a result
Of this admittedly serious movement, it
Is agreed that a further increase will
create the feeling that no limit can be
hxed to the raids of private incomes.
Growing Discomfort.
The result is a widespread and grow
ing discomfort in regard to the eXtrava-
CANT lengths that expenditure has
reached in respect to social services, of
which the dole is the most costly fea-
ture. The taxation of wealth N the
interests of poverty has already gone
far beyond anything done in any other
country, and the sequel to the nigh
cost of production. which in Illrn is
partly the cause of the depression in
export trade.
Hitherto, no party has dared TO LaSe
. stand against the policy of spoliation.
but the public reaction is now fnoing
expression everywhere, and even the
Labor government has been compelled
to disown the extravagant demands of
James Maxton. NJ. P, and the extrem-
lists, who want to raise the standards
OF unemployed pay almost to the level
Of normal earnings. 1t is not imurob-
able that when Snowden's budget ap-
pears it will be followed by great re-
vllsion against the Macdonald min
tstry.
(Copyright, 1927