Evening star. [volume] (Washington, D.C.) 1854-1972, 1943-03-03
HoIf of individuals
1912 Liability Will
Be Foregone

as you go" income tax plan
under which the government will
forgo so per cent of 1912 tax liza
bility on individual earned in
comes will form the corner stone
Of Canada's fiscal structure for
the year beginning April /, budget
proposals offered yesterday by
Finance Minister J. l.. Ilsley to
Parliament indicated,
Although Parliament will debate
the proposals, rejection would be
equivalent to vote of non-con-
fidence in the government, and no
such move is expected.
The plan. similar to that proposed
by Beardsley RUM and others in
the United States. is second step
rent basis, since most Dominion tax
payers already had paid large part
of the tax on 1912 incomes as they
we're earned through the medium of
Victory" tax on salaries and
wages.
The new plan will eliminate an
eight-month lag in government
tax collections and put government
Income and outgo on current basis.
Victory Payments to Be Credited.
Under the partial pay-as-you-go
plan which Canada adopted last
year. the tax on income for 1912 was
payable over the Il months from
September l. 1912, to August 81.
1943. Thus some OF the income was
payable as much AS eight months
after it had been earned
Because of the lag Canadians
had paid proportions ranging from
one third in the case of high incomes
to as much as 100 per cent in low
income brackets. with the average
estimated at about half.
Those who have paid more than
the required half of the tax on 1912
incomes will receive credit, while
those who have PAID less than half
must file return and pay up to the
so per cent mark by June |.
Mr.. Ilsley cited the case of single
man earning $50 week in 1912
whose total tax liability was 1891 20.
OF this total he had paid Sl6479 by
the end of the year. Cutting his
total liability in half, or to S195 so.
left him owing $3081, still to be paid
by June /.
Victory tax payments made so far
In l943 will be credited to 1943 in
come, so that the pay-as-you- go fea-
ture is actually retroactive to the
first of the year.
Higher Postal Rates Sought.
Investment income under $1,000
received in 1912 will receive the same
so per cent forgiveness as earned in
come, while so per cent of income
from this source above $4,000 may
be deferred and added to death
taxes.
Special provision was made to al
low for the difficulties farmers would
have in estimating their incomes on
current basis.
They will be required to pay two
thirds of their tax any time up to
the end of the calendar year, based
on a rough estimate of their in
comes, and to adjust the balance in
a final return in March of the fol-
lowing year.
A final return and adjustment
payment also will be required of
other taxpayers to account for the
estimated per cent of income not
collected on the pay-as-you-go basis.
Mr. Ilsley's proposals also included
higher postal rates and increased
taxes on liquor, tobacco and enter
tainment in an attempt to increase
revenues by s136 100000 to a total
of s2.752 900 900.
"Work-and- Save" Is Keynote.
This would still leave So ,748 900 900
to be raised by borrowing, and Mr.
Ilsley made Work-and-save" the
keynote of his address, urging that
savings be placed at the service OF
the Nation
He declared the record high rev.
enues proposed in the new budget
represented near approach to the
maximum which could be raised by
taxation
Of his proposal, which Mr.. Ilsley
called "pay-as-we earn" he said
Under this plan. when a mans
income falls off. his tax falls off
with it.
The difficulties in the present
system are most serious in the case
of those whose incomes cease or de-
cline severely because they enter the
armed forces, lose their jobs, retire
or die"
The new plan, Mr. Ilsley said.
enables us to make more effective
use of collection at the source from
earnings" and Ito adjust our income
tax rates and collections more
promptly when changes in economic
circumstances make such adjust
ments desirable -
In this way it will make the in
come tax better instrument Of
fiscal policy in helping to maintain
full employment" Mr.. Ilsley said
Mr.. Ilsley warned that the Gov
eminent had been forced to borrow
too heavily from banks to meet its
1928 war deficit of S2,262 900 900
and urged Canadians to increase
savings which could be placed In
the service of the nation