§ There was another point in connection with this question referred to the Committee presided over by my right hon. friend—the practicability of graduation, whether by progression upwards from the normal tax by an ascending scale for higher incomes, or by degression from the normal rate by a descending scale to a lower rate. On this point there was a considerable divergence of opinion in the Committee, and I may say at once that, quite apart from other reasons, it would not be possible for administrative reasons to introduce any change in graduation simultaneously with the already sufficiently complicated alterations of a differentiated tax. The machinery would break down under the strain. I do not announce at this moment any final opinion on the various schemes submitted to the Committee. I see, as everyone conversant with the national finance must see, enormous difficulties in the application of that principle. It would require a compulsory declaration of income from everyone. I should like to see it very much; but how are we to get it? Only by giving an advantage for it. You get a compulsory declaration now where abatements are claimed. Under the scheme of differentiation you will have no difficulty, because it will be to a man's interest to make the declaration. But the moment you come to tell a man, "You are to declare your income, not for your benefit, but in order that you may be taxed at a higher rate," you find yourself confronting a good many formidable difficulties. As to the experience of foreign countries, in my opinion there is no foreign or colonial experience which is really relevant on helpful. I do not mean because out social and economic conditions are very different. But you will find, if you examine the various systems of so-called graduation, that they all stop at a comparatively low point, Most of them stop at £5,000. As far as I know, none of them go beyond £8,000. That is just about the point where, by compulsory declaration, we should hope to rake in for income-tax a lot of money that we do not now receive. But I am not now expressing a final judgment in the matter. I am pointing out difficulties which must 1207 be present to the minds of all who have considered the question; and, as far as the present year is concerned, we must be content with the reforms of differentiation.