Evening star., 1944-05-20
U. S., Britain Tux :
Peck Seen Reached
Favorable Financial Positions
Shown in Recent Reports
BY David laurence

BY David laurence
The peak In wartime taxation has
apparently been reached for both the
United States and Great Britain.
Analysis Of the budget recently pre-
sented to the British Parliament for
the fiscal year 1944-5 shows II to he
the first budget in which there Is no
proposal for tax increases on corpora
tions or individual incomes In fact,
all the recommendations, with one small
exception, are designed to revise taxes
downward.
A much more favorable position from
the standpoint of Federal finances and
taxation has been attained in our Fed
eral budget than was anticipated last
January. This is due to q decrease in
wartime expenditures as well as a sub
stantial revision upward in the amount
of money actually collected from tax
alton.
There seems no doubt now that the
Withholding tax has resulted In the
collection Of taxes from persons who
either ignored or were Indifferent to
Federal taxes heretofore. Never in the
history Of the income tax has there been
such an effective dragnet for the collec-
ton OF Federal taxes as Is possible by
requiring the employer to deduct the
taxes before paying the employe.
British Revenue Rise.
The total tax payments in Great
Britain in relation to national income
have risen considerably. They were
about rs per cent of national income in
1899 and they went I'D to 40 per cent
of the national income In 1914 This
compares with the payment in America
OF 10 per cent OF our national income
in taxes in 1910 and about "a Der cent
in 1914. In view of the fact that our
prewar level of taxes was much lower
than in the United Kingdom, the total
American tax load has increased 270 per
cent between 1910 and 1945 as compared
with 180 per cent rise in the United
Kingdom.
The interesting thing about the
British budget Is that there is an ap-
parent realization of the Importance of
keeping alive the corporations which
must furnish the bulk of the employ-
ment after the war. Corporations are
being given relief on excess-profits taxes
so that they can begin to prepare them
selves for postwar crises of an economic
nature.
1t Is significant, too, that the British
have relied much more heavily on ex-
else taxes than has the United States
Government. In America, the main re-
lance has been on individual income
and corporation taxes.
nY, y,nIb1in daht c,,l
for the British, it is estimated that the
total interest charges for the year end
ing March, 1945, will be approximately
$1,472 ,000,00 per year, and the public
debt of the United Kingdom is estimated
at $79, 100, ,000, 900, at present. This means
that the present debt is about 122 per
cent greater than the national income.
Rapid Rise in U. 8. Debt.
In the United States, on the other
hand, the gross public debt Is expected
to reach 5000 .OO0, ,o00, 900 on June 30 of
this year, and interest payments per
annum are estimated as requiring an
expenditure of approximately $780,
100000.
Our national debt has increased more
rapidly than that of Great Britain be-
cause the United States has borne the
brunt of the financial needs of the AL
lies through lease-lend.
Considerable improvement has been
made by both Great Britain and the
United States in financing the war. This
means that from the standpoint of in
hatlon, larger proportion of the money
is being raised through taxes than ever
before and, similarly, a larger propor-
ton Is being borrowed here from So
called nonbank or noninf1ationarv
sources than ever before.
The United States has made the most
remarkable strides in the field of financ-
ing. From only % per cent of the budg-
ct financed through tax receipts in
1943, the Federal Treasury has now
reached a point where approximately
Al per cent of the expenditures in the
fiscal year 1945 will have been raised
through taxation and other receipts.
The overall financial picture for all
countries is, of course not good. Neither
the British nor American governments
can feel too comfortable about the size
OF the national debt. And this will fur
nish the biggest challenge of the post
war period-how to cut down the budg-
cts. how to pay off the national debt
and how to increase national income so
that taxes will not bog down the ma
tional economy.
u