Evening star., 1939-09-27
35q6 Income Tax
Is Levied in Britain
To Meet War Budget
Heaviest Burden Ever to
Go to 37.5% in April for
$500, 100000 OutIoy
BY the Associated Press.

LONDON, Sept. 27.-Britain to-
day levied on her citizens the heavi-
est taxes they ever have known to
meet an estimated $4,000, ,000, 900
$500, 900 000) outlay in the current
financial year, greatly swelled by the
costs of war against Germany.
Sir John Simon. chancellor of the
exchequer, presenting his first war
budget in the House of Commons,
announced the standard income tax
rate for the rest of the fiscal year
ending March 31-would be IS per
cent and for the 1901 year 37.5 per
cent.
The rates are to be 7 shillings in
the pound ($l.37 in 1896 until
March 81 and 7 shillings pence
(s1.40 thereafter. These rates are
levied on income in excess of ex-
emptions ranging from f125 year
about S495-for single persons to
f400-about S1.584-for married men
with three children.
At the same time Sir John levied
drastic direct tax increases-as he
put it, "all down the line"-on beer
whisky, tobacco. sugar. wines, death
duties, income surtaxes and excess
profits. The tea tax was untouched,
however.
These severe sacrifices-the heav-
lest which direct taxpayer in this
country has ever had to bear"-were
declared by Sir John to be vital in
the scheme which called for contri-
button to war expenses from citi-
zens of every kind and fortune"
He argued, however:
| However serious our financial
problems may be. the financial prob
lens which confront Germany are
infinitely greater"
He said the increased income taxes
would produce fl07 900, 900 (s423,-
720,0O0) this year and f226. 500 900
| 1896 $40 ,00O in the full fiscal year.
One of his most drastic levies was
60 per cent on excess profits. Ap-
plying to the whole field of trade
and industry, the tax will be levied
on excess profits since last March
81 over profits of the pre-war stand
ard period.
Sir John said a capital levy was
being studied, but that it did not
seem practicable to apply one dur
ing the war
The new income tax rates COM
pare with the top at the close of
the World War of 6 shillings in the
pound, or 80 per cent. At the start
of the World War David Lloyd
George, then chancellor of the ex-
chequer, doubled the income tax to
make it shilling sixpence, or 12.5
per cent.
The 7-shilling, or IS per cent, rate
for the remainder of this year will
apply on income tax due by direct
payment next January l.
Sir John recalled that the total
expenditure for the current year was
estimated in August at Fl ,453 900 900
(s5, ,753, ,880, ,000), of which f502 600 900
($1 ,987 ,920, ,00O was to be borrowed.
This included defense costs of
f730, ,0OO, 900 ($2,890, 900 ,000).
On the outbreak of war, he went
on, Commons voted $500, ,000, 900 ($1,-
$50, 900 OOO additional credits.
II cannot guarantee he said,
that this first vote of credit will be
sufficient to carry all our require
ments as to March 81 next"
Even if it is" he continued, need
of a further budget as promptly as
possible is self-eyident since we
shall be facing in this financial year
total outlay of nearly two billions
($7 ,920, 900 ,0O0 and on the other
hand the original estimate of reve-
q 01IR09i !