§ What will be the cost? This, I may say, is a very opportune moment for making a change of this kind, because, as the Committee will observe from the estimated revenue for the year, we are anticipating an increased receipt from income-tax next year of no less than £900,000. That is a time when we may well be able to risk a little in the way of cost. Nothing is more remarkable in respect of the income-tax, notwithstanding the growing abatements and the rise in the rate of charge, than the growing produce of a penny. In the year before the war, 1898, Sir Michael Hicks Beach completed the present system of abatements up to £700; and the income-tax then stood at 8d. in the pound. Notwithstanding these abatements and the fact that the tax is now at 1s. in the pound, the produce of each penny, which was £2,284,000 in 1898, is now £2,600,000—a remarkable proof of the elasticity of this tax. But it is very difficult to estimate either a possible gain or a possible loss on this tax; though its tendency for many years has been in an upward direction. There are, perhaps from 800,000 to 850,000 persons with incomes between £160 and £700 a year. There are, perhaps, 120,000 taxpayers with incomes between £700 and £2,000 a year. How much of their incomes is earned and how much unearned is largely a matter of conjecture. Therefore, the figure I give must be taken more or less as guess-work. But I estimate, from the best materials available, the loss during the year from this differentiation at £1,250,000. Further, during this first year there will be an additional loss, which will not recur, owing to the delay which must necessarily result in getting in the tax in the early months of next year owing to the more complicated machinery. We anticipate that we ought for safety's sake to reckon that we may be delayed to the extent of £750,000 in the collection. That would make a loss for the year of £2,000,000. But you must set against that the fact that we shall get £900,000 more this year, according to our estimate; and the £750,000 is only a deferred pay- 1208 ment and not an actual loss. As I say I do not present it to the Committee as more than a well founded guess; but I hope it is an outside estimate of the loss.