Evening star., 1932-04-03
Balanced British Budget
Brings Taxation Worries
BY A. G. GARDINER.

LONDON, April 2-Anxiety over
Neville Chamberlain's new budget al
ready has begun to displace the elation
created this week in Great Britain by
the achievement of balancing the fiscal
1892 budget, with surplus Of more
than 0,000 900, this figure including
the saving effected in the dollar ex-
change account.
When the crisis came last September
1t was estimated that the fiscal year
would show a deficit Of $400, 90 and,
with the fall of the Labor government
and the formation of the National gov
ernment, an emergency budget was in
troduced in Parliament by Sir Philip
Snowden in order to save the credit Of
the country. Drastic new taxation was
imposed, including Increases in the In
come tax and surtax, which together
exacted levy in excess of so per cent
of the total taxable income.
~ 4
The response of the public to the whip
was extraordinary and the promptitude
of the payment of taxes unprecedented.
The taxes realized nearly S100i000,00
in excess of the original estimate.
Coupled with severe cuts in expend1-
lures, which included a 10 per cent re-
duction in the salaries of public serv-
ants of all grades and a reduced scale
of insurance benefits, Chamberlain, the
successor to Snowden as chancellor of
the exchequer has been able to apply
over sl50,000,000 to debt redemption
and still show surplus.
The main factor in balancing the
193l-32 budget, apart from economies
and the surprisingly high yield of the
income tax, was Britains departure
from the gold standard, which in giving
a flip to trade reduced the unemploy-
ment figure well below the 5000, 600 es-
timated in the emergency budget. The
cost Of unemployment insurance to the
state therefore was substantially below
the anticipation.
However, satisfaction at the magni-
tude Of the accomplishment Is now
qualified by anxiety over the 1928
budget. The assumption that on the
present showing, together with the new
tariff now In operation. Chamberlain
Will have a handsome surplus at his
disposal, encourages clamors from all
quarters for relief. Especially insistent
are demands for relief from the present
oppressive burden of the income tax
and for restoration of the cuts made In
unemployed insurance benefits.
The impression prevails in informed
circles that Chamberlain will seek to
NAAS ohA PAuo NY GIC
duties on tea and sugar, but even so
it is doubtful whether he will dare To
concede large tax remissions or increase
unemployment benefits. 1t is impossible
Tor the sensational achievement in COL
lection CT the income tax to be repeated
tnls year. The tax will be levied on
incomes universally lower and on trad
ing results which show a catastrophe
slump. Moreover, in the year just closed
the treasury collected a year and
quarters revenue on the income tex, q.
exped1ent which cannot be repeated.
x = x \
A further disquieting fact Is that the
death duties, which are now levied ur
TO half the value on great estates, have
begun to show evidence of exhaustion.
The millionaire class is rapidly being
extinguished under the operation of tilr
duties, and 1t is calculated that in less
than twenty years they will have ceased
to exist. Already a large proportion OF
the great country houses are closed OF
converted into public schools, club
houses or institutions. and in London
the great town houses of the aristocraoy
are disappearing. Park Lane, which
once was a street Of private palaces,
now Is becoming a street of hotels ano
fats.
This vast transfer of wealth by taxa.
ton from the very rich to the general
body of the public has enormously en-
hanced the standard Of life for the poor,
but its limits are now reached and a
decline has set 1t, with the result that
revenues must be sought in another di-
rection. The new 10 per cent tariff is
one expedient. but this will not go far.
Walter Runciman, president OF the
Board of Trade, originally calculated
that 1t would produce $l50,000, 900 in
revenue, but with the exemption of food
and meat imports from the dominions
1t is not expected now to realize more
than $l00, ,000. 900. The only other re-
source Is an increase OF indirect taxa
tion on consumption, which in raising
prices will lower the standard of living
The rich have paid their ransom to
the uttermoSt and now budgets must be
balanced from the other end of the
scale. This is the problem which con-
fronts Chancellor Chamberlain tcaaJ.