§ It is next proposed to revise the Super-tax scales applicable to incomes in excess of £8,000. At present, any excess of 355 income over £8,000 is chargeable at a rate of 2s. 8d. Henceforth the charge will be 2s. 10d. between £8,000 and £9,000, 3s. 2d. between £9,000 and £10,000, and 3s. 6d. on the surplus of all incomes above £10,000. [An Hon. MEMBER: "Not enough!"] The effect of this revision of the scale will be to produce £2,150,000 this year, and £2,685,000 in a full effective year.
§ I said a moment or two ago that I would give some examples of the operation of the Income Tax, if the suggested charges are adopted. I take, first, the case of a man, with no children, earning £2 15s. a week. He will be directly assessed and he will pay 12s. 1d. quarterly. Next, I take the case of a man earning £3 a week, without children. He, also, will be directly assessed, and once a quarter will be called upon to pay 18s. 11d. Then I come to a man earning £4 a week, also without children. He will likewise have to meet a quarterly assessment and to pay £2 6s. 2d., or just over £9 4s. in the full year. In all these cases, wherever the man earning that wage or in receipt of that salary proves that in the whole year he has not earned such a sum as would make him chargeable to Income Tax, he will be entitled to call for repayment of the quarterly amounts which he has already paid. Where a man is in regular receipt of wages or of salary of that amount, he will have to pay quarterly by direct assessment.
§ Now I go to the other end of the scale, and see how the rich man is treated. A man with £5,000 a year will pay £1,029, which is a virtual rate in the pound of 4s. 1½d., that is, if you combine Super-tax and Income Tax. The man with £10,000 a year will pay in Income Tax and Super-tax £2,529—a virtual rate of 5s. 1d. in the pound. A man with an income of over £10,000 a year will pay £2,529 on the first £10,000, and 7s. in the pound on all excess over £10,000. Thus a man with £20,000 of income will pay £6,029 in tax, or a virtual rate of 6s. in the pound. The happy possessor of £100,000 will be called upon to pay £34,029—a virtual rate of 6s. 10d. in the pound.
356§ Mr. CROOKSThat is where it hits me!
§ Mr. McKENNAI am not sure that, having regard to the charges which many very rich people have assumed—to the large number of people dependent upon them, and to the responsibilities which they cannot avoid—I am not sure that the lot of a man in these circumstances, with an income of £100,000 a year, is a very happy one when he is called upon to find £34,000 which he did not expect to have to find. Given time, it can be done; and, given time, no doubt, if necessity requires it, further burdens can be met. A sudden blow may cripple the individual with less advantage to the State than if we take from him by taxation by degrees what he is prepared from time to time and able to pay.