§ The duty on entertainments will also be increased, and the present rates will be adjusted so as to aim at producing an estimated addition to the revenue of about £4,000,000 in a full year and about £2,000,000 during the present year. In this estimate I recognise, of course, that the yield from Entertainments Duty is inevitably affected by war developments and that some areas will yield little. I should like to say to the Committee and to the country that the increase in Entertainments Duty is not designed to discourage persons from having and enjoying the entertainments available to them. It is rather a contribution which I believe they will willingly make towards those defences which make it possible for them to enjoy, with their families and friends, reasonable relaxation and pleasure.
§ These proposals as a whole in the sphere of direct and indirect taxation 649 give me £86,000,000 in the current year and £129,000,000 in a full year, but the Committee will appreciate that even with these substantial contributions it is obvious that I must obtain some new sources of revenue.
§ Two sources of taxation have been suggested upon which I shall say a few words. The first is the taxation of land values. I doubt, apart from the merits, whether even the most ardent supporters of that tax would say it would be practicable to bring it into operation to-day. The ascertainment of the value of land, which is a necessary preliminary, is a long and difficult process, and a task of that kind obviously cannot be undertaken under present conditions. I can see no hope of such a tax bringing in revenue to meet our urgent and pressing needs.
§ Then there is the tax upon capital. I am not now referring to any action in relation to individual accretions of wealth arising as a result of the war—statements have already been made as regards intentions concerning them. What I have in my mind are those proposals which are now sometimes advanced not in the form of a large capital levy, but in the nature of an annual percentage tax chargeable upon capital values, but payable in cash. This again, apart from discussing more controversial aspects which I do not desire and have no need to do to-day, would mean prolonged investigation and assessment, and in this case there is the additional complication that the process would need to be repeated every 12 months. Moreover, I would suggest to all Members of the Committee that under our existing system of taxation, Death Duties with their very heavy incidence already tax capital in a different way, and, if taxation of capital is to be regarded as a laudable object, they do it, I suggest, in a more satisfactory manner.
§ For the rest, I would say again that what I need is cash, and cash out of current income. Already in the case of the highest incomes—which are mainly though not exclusively income from capital—the State takes in Income Tax and Surtax the main part of the current cash income. If it be said that even more should be taken, the best way, I suggest, to take it is by the method of income taxation, which can be effectively imposed without all the time and labour involved in the ascertainment of capital values. Greatly 650 as the Chancellor of the Exchequer needs new sources of taxation in these times, I fear that I cannot see in either of these proposals a contribution to the problems which have to be met to-day.