§ I believe that the Super-tax at its present rate constitutes an excessive burden both on enterprise and on the saving power of the nation, and that it is an impediment to the creation of that new wealth without which our present load of debt and expenditure cannot be borne. The Royal Commission on Income Tax contemplated that a certain relation should be preserved between the Income Tax and the Super-tax, but that relation has been altered by the reduction of the Income Tax without a corresponding reduction of the Super-tax. I therefore propose to reduce the Super-tax. The Committee will remember that at the beginning of my speech I proposed an increase in the scale of the Death Duties to yield.£10,000,000 in a full year. My object was to transfer this burden of £10,000,000 from income to capital, and I now propose to reduce the Super-tax by exactly the same amount as I propose to increase the Death Duties. From every point of view I believe that change will be salutory. The difference between the highly-paid brain worker who depends entirely upon the exhaustible product of his brain and whose income depends entirely upon his health, and whose provision for his wife and family depends entirely upon his power to build up insurance funds in his lifetime—the difference between the position of that man and the possessor of an equal income derived from investments is too obvious to need any further discussion. It is recognised with enormous force in the present heavy scale of the Death Duties, and I believe that a moderate diminution of the burden upon wealth in the process of creation, even if 86 that burden is to be transferred to accumulated capital passing at death, will tend to relieve the pressure upon the highly-creative faculties of the community. Such a change is in accordance with modern conceptions, and I believe that within these limits and at this particular juncture, having regard to the special circumstances of our industrial situation and the lack of drive there seems to be in so many quarters, it will be attended by definitely recuperative symptoms. therefore propose to reduce the Super-tax in as nearly as possible a corresponding proportion over as nearly as possible the same range of taxpayers and to approximately the same extent as I propose to increase the Death Duties, so that the new burden and the new relief will balance one another in each succeeding stage of the principal ranges of income. I am not reducing the burden on this class of wealthy taxpayers, but I am adjusting the load in a manner more conducive, as I contend, to the general interests of the country.
§ The scale of Super-tax reductions is considerable. Again I only give instances. The White Paper will reveal exactly what benefit every class of Supertax payer will get. For instance it halves the existing rates of Super-tax up to £3,000 a year; from this point the relief becomes smaller varying from 1s. in the to 6d. in the £ until in the region of income which denote a capital which will suffer no increase of Death Duty it dies away altogether except in so far as the richest taxpayer gains not a special rate of benefit for himself, but a benefit granted to the other classes on the lower ranges of the scale of taxation. The comparative scales of Estate Duty increases and of Super-tax reductions, together with other interesting figures on this subject will be found in the White Paper in the Vote Office. The cost of the Super-tax remission will be £6,700,000 in the first year and £10,000,000 in a full year. On the other hand, the new scale of Death Duties yields £4,500,000 in the first year and £10,000,000 thereafter. Therefore the net loss in the first year is £2,200,000 and in the future the balance will be exact.