The Waterbury Democrat., 1940-07-23
German Bombs Fall
 Very Near London
Ccontinued From Page D

per pint in the tax on beer and oi two shillings (about 40 cents) per pound of tobacco. Empire preference will be maintained on wines and tobacco. The tax on light wines was boosted SO cents a gallon and on heavy wines 80 cents @ gallon.
 For the Ilrst time in British his- tory, it was announced, the income tax on salaries and wages will be deducted at the source. either each week or each month.
 Expenditures Grow
 Announcing that Britain's weekly war expenditures had grown from 5O,0OO 900 pounds a week to 57,000,- 900 ($228, ,O0000O Wood told the house that the nation was called upon to meet an estimated deficit of 2,2O00OO,00O pounds ($8,8O0 000,- 00O) in order to push>the war against Germany at its present rate of in- tensity.
 Wood addressed the house the day after Lord Halifax foreign secre- tary, had replied with a ringing NO" to Adolf Hitlers bid for peace on his terms.
 The chancellor of the exchequer said the government was determined to prevent imitation, although it meant drastic increases in the gen. eral tax burden.
 Other Increases
 He announced that the surtax on incomes exceeding 2,000 pounds a year ($8,000) would be increased from 25 cents to the pound to 40 cents, and that income tax on the first 165 pounds of taxable income would be five snillings, or $1, to the pound, compared to the present tax of about 85 cents.
 Considerably increased taxation is essential from both the financial and economic standpoints in our present situation" Wood explained. We must secure widespread and drastic retrenchment in the forms of personal expenditure not abso- lutely necessary"
 He said the highest rate of surtax would be about $1.90 to the pound on incomes of 10000 pounds ($80,- 000) Heretofore that surtax has been applied to incomes of 30,O00 pounds ($120,000).
 Wood emphasized that the gov- ernment, in absorbing the nations excess income by taxation, was ap- plying the new rates to all classes.
 An increase of 10 per cent was applied to the duty on estates of more than 10000 pounds ($40,000) and the income tax, he said, will be graduated to a peak rate of 18 shillings, or about $360, out of every pound, so that on incomes exceed ing 10000 pounds ($80,000 the gov- ernment will take nine-tenths of every pound.
 Increase Revenue
 The chancellor said the new in- come taxes would increase revenue this year by 60,00o,0OO pounds ($240,- 000,000), an increase amounting to 84,OOO, pounds ($336, 6,000,0o0) for a full year.
 Total receipts from income taxes and surtaxes for the full year, he said, would be 635, 100000 pounds ($2,540, ,0OO,0oO).
 Illustrating the effect of the new taxes, Wood said a married man with two children and an income of 1000 pounds ($4,000) would pay 210 pounds 10 shillings and 10 pence ($842.1O instead of 180 pounds six shillings and three pence ($721.2) as formerly.
 An increase in the entertain ments tax, Wood said, would pro- duce 100000 pounds ($16,000, ,0oo) annually. He said the government was dropping the so-called Simons purchase tax bill but that it was introducing a new kind of purchase, or sales, tax to curb personal expen- ditures.
 The program proposed by the chancellor calls for new and heavier sacrifices on the part of taxpayers It was offered at time when the entire country appeared to be in support of the views expressed by Halifax.
 Wood estimated expenditures on the war during the current budget year at 38OO,O00,O00 pounds (about $11 200 100000 as compared with the 2,0O0,0O0,000 pound estimate made by Sir John Simon, his pre- decessor in the cabinet of former Prime Minister Neville Chamber lain.
 He added that war expenditures had risen from 5,000,000 pounds (about $20O,OOO,00O a week to ST. 100000 pounds.
 Wood further estimated that the total expenditure in the current fls- cal year, including outlays for non. war purposes, would amount to B. 467,0O0, 900 pounds (about $l3,S68,- 00,0,000) as compared with the Si. mon estimate of 2,666, ,790 ,000 pounds
 On the basss of Simon's revenue estimates, these expenditures would leave a deficit of 2,200,000, ,000 pounds $8,800,0 100000, Wood indi- cated.
 "There is a large gap to fill which will require very strenuous and con- tinuous efforts in the form of in- creased taxation and additional savings" the chancellor warned the house.
 Wood said the new direct and in- direct taxes would yield 239,000, ,00C pounds ($956, ,000,000). With the r. 234, 1891 ,000 pounds of revenue esti- mated by his predecessor as chan cellor of the exchequer, Sir John Simon, the total would be 1,473 1891, : 900 pounds ($5 5,893, ,5640 000) leaving a prospective deficit of 1893, ,609, ,00C pounds ($7,974, ,736, 6,000)