1939-09-28 — Page 25

Thursday,

HONGKONG TELEGRAPH

September 28, 1939.

Income Tax 7s. 6d. in £; 60 Per Cent. Excess Profit Tax; Capital Levy May Be Introduced: War To Be Financed By Direct Taxation of People

COLOSSAL

TAXATION

FIRST

IN BRITAIN'S

TAXATION EVER UNDERTAKEN BY A FREE NATION INDUCED

REPRESENTING THE MOST STAGGERING BURDEN OF HISTORY, SIR SIMON'S WAR EMERGENCY BUDGET, IN THE HOUSE OF COMMONS LAST NIGHT, PROPOSES STUPENDOUS INCREASES.

INCOME TAX IS TO BE INCREASED FROM 5S. 6D. TO 7S. 6D. IN THE £ STERLING.

AN ADDITIONAL SURTAX, RANGING FROM 1S. 3D. ON IN- COMES OF £2,000 TO 9S. 6D. ON INCOMES OF £30,000 AND OVER, WILL BE IMPOSED;

Duty on estates of between £10,000 and £50,000 will be increased by ten per cent., and on estates of over £50,000 by 25 per cent. BEERS AND SPIRITS

ANNOUNCED WAR BUDGET

War Emergency Budget: Simon's Speech in Full

increases in direct and indirect taxation, including LONDON, Sept. 27 (Reuter).—Substantial all-round raising of the income-tax level to 78. 6d. in the £, and large increases in so-called luxury articles, were announced by Sir John Simon, Chancellor of the Exchequer when he introduced the war emergency budget in the House of Commons this afternoon. At the outset, Sir John Simon) this means surtax would produce an- the budget at the end of April £8,000,000 in the full year.

Announcing n further modification he estimated the expenditure In estate duty, Sir John Simon sald: for the year would amount to "I now propose that in relation to | £1,322,000,000,

deaths taking place after to-day-

Excise duty on Beer will be increased by one penny. Duty on spirits said that when he introduced other £5,000,000 this year and will total 13s. 9d. a bottle.

Duty on sugar will be increased by one penny per lb.

An increase of 28. per lb. will be imposed on tobacco.

In addition, trade and industry will have to bear an all-round excess profit

tax of 60 per cent."

LEVY ON CAPITAL?

During his outline, Six John Simon warned that the Government might forced to apply a levy on capital.

Even with the next taxation, revenue will fall far short of war time ture, and several forms of loans are to be made available to the public.

The defence expenditure included voice: There will be a lot (loud In that vast total was at that the laughter)-duty on 'estates execeding stated as £630,000,000.

£10,000, but not exceeding £60,000

The budget proposals were calcu-shall be Increased by the ten per Inted to raise from revenue £942,-cent." 600,000, and consequently at that! The Chancellor indicated that for be borrowed within the financial year, would be 25 per cent, the yield from time £300,000,000 was left to be estates over £50,000 the increase

at

Before the Finance Act was passed, these increases being estimated expenditure on defence had grown to a total

The figures for this year's expendi- £6,000,000 in the full year,

Additionally, Sir John Simon pro-. of £730,000,000, and the amount to posed increases to all taxes on something like £400,000,000. Le borrowed at that time came to alcoholle liquor to take effect as from

to-morrow. Total expenditure when Parliament There will be an additional penny rose in August was £1,433,000,000. on a pint of beer, and this, I is of which 502,000,000 was to be bor-estinated, will produce £11,000,000 this year and £27,000,000 In the full year.

Estimated expenditure up to March this year will be £2,000,000,000, which is only £696,221,000 short of the record Great War expenditure in 1917-18, despite the fact that the Empire will only have been at war for seven months.

HIGHEST IN HISTORY

RICH AND POOR

The new income tax is the highest in the nation's history.

rowed.

Posco Timo Effort

Thene totals, vast as they were were arrived at on the basis that we remained at peace throughout

the year.

The Budget proposes to raise about 51 per cent. of expenditure by taxation, which is almost double the und a vote for credit for an addi-

proportion raised during the Great War.

promptly £500,000,000 was

this is

Spirits with the added duty would cost 13/0d. 11 battle, and estimated to produce €3,500,000 in the full year.

Luxuries Up

Also there would be further add- On September 3, we were at war, tions on light wines.

tional

Other increases include one penny klopted.

The Chancellor said he could not a pound on fully refined sugar, two The crux of the Budget was Sir John Simon's state-guarantee this first vote for credit shillings a pound hicrease on tobacco, ment that financing other than by taxation or loans quirements up to March 31 next.

would be sufficient to cover all re- and 60 per cent. excess pronts tax modelled on the armaments profis of trade and industry. The need for a further budget as duty, and applied over the whole feld unprecedented us we should be facing in this finan

clul year a total qutlay of nearly €2,000,000,000.

TO PAY from genuine savings must be inflation. Britain, he promptly as possible was self-evideat

declared, intends to avoid this by

LONDON, Sept. 27 (Reu-financial efforts.

ter). Sir John Simon's OPPOSITION SUPPORT drastic Budget, affecting

Referring to the increase in the capital wealth of individuals during the war, Sir John Simon announced that a capital levy was being studied, but it was not practicable to apply one during the war.

rich and poor alike, has The Opposition, whilst reserving the right to country was engaged set for us a cellor, would produce £107,000,000 caused an enormous im-criticise certain points, will support the Budget. pression throughout "Severe as the Budget is, it does not bring us even Britain, regarded as the within the remote range of the limits of our financialis gravely weakened." best possible proof of the strength, or the sacrifices which the people will accept country's determination to as they become necessary as a means to victory," declared failed, then the prop that sustained complication

carry out a supreme war Sir Archibald Sinclair, leader of the Liberal Party. effort.

Income-tax of 7s. 6d. in the

£ is the highest since the tax was first introduced in 1798. It compares with 1s. 3d, at the start of the

last war and the previous highest figure of six shil- lings.

Neutrality Measure

Quick Approval By

U.S. Senate Likely

WATERS OF- AMERICAS

assumed that these enormous figures

Special Economic Problem "The great war in which this

The new proposals, said the Chan- special economie problem, and if this this year and over £220,000,000 in is not properly faced and not holdly the full year. on the war to a victorious conclusion handled, then our power to carry Sir John said it must not be

were proof that there had been pro- Finance was sometimes said to be digious squandering and waste.

The truth was Sint the increasing and claboration of the whole war citori collapsed, machines of war and the mechanisa- There were two obvious ways to tion which accompanied the develop- make the best use of productive {mnet of A military force, also resources--taxation and borrowing, greatly increased the cost. and doubtless we should have re-. course to both:---

the fourth arm of defence. If finance

Unprecedented Scale

the maximum contribution.

The Chancellor gave as an instance. the east of modern aircraft, which he said was three to seven times that of a comparable type in 1910.

Coverement Blamed

Sir John Simon added that by The Exchequer would leed money agreement with the defence Ministers, on an unprecedented seale, and for qualified and experienced business that vast need over the period of men had been recruited in order to May Claim Neutrality war, taxation would have to make see that the proposals for the new

In Half Of Oceans The budget as a whole, writes

"But it is obviously impossible that expenditure were framed with strict "Router's" city editor, re- (Reuter)-The debate on

WASHINGTON, Sept. 27

PANAMA CITY, Sept. 27, like this can be provided from the

the whole of expenditure in a war regard to the necessity of finance. presents undoubtedly

the (Reuter).The Pan-American proceeds'

THE OPPOSITION of taxation. I will be heaviest burden ever

the Administration's new neutrality Conference la discussing the necessary to supplement the provi- under bill for the repeal of the taken by

Arms question of how far the terri-fence loans on a large scale.

sion by revenue from national de- free nation in embargo may begin in the Senate torial waters of the American A history,

an October 2,

"It will be the duty of the private

Mr. Clement Attlee, leader of the continents shall extend.

citizen to contribute to the greatest Opposition, referring to Sir John possible extent to loans when they the House of Commons, recalled the Simon's emergency budget speech in The Cubant delegate proposed are announced. that they should be extended in) "When that time comes, I will be emergency budget of eight years ago, the Atlantie to half way between found that various types of loans will and expressed the opinion that the America and Africa, and in the be offered."

National Government had brought Paclic to half way between Ameri- ca and Asia.

Sir John Simon earnestly uppealed the country to the present position

Mr.. Attlee agreed that Sir John All belligerent acts in these areas country to refrain from unnecessary raise these large. surns by taxation, la all eltizens and institutions in the Simon was right in endeavouring to should be declared unlawful and a capital expenditure and to put what and he thought the income-tax in- threat to American security,

This was the only formal sugges-view to devoting them to the new ever savings they could make with a tien that has yet been put forward, loans issued for the prosecution of paying for the war to a fulure oc-

crease was right. but another possibility being canvas the war. ed in the extension of American waters from 50 to 1,000 miles.

ex-

up-

Senator Borul, leader of the position to the measure, announces

and

The committee, therefore, is promptly, peeled to approve the measure optimistic about quick Senate action. supporters are

Senate Majority

The budget proposes to raise

about 51 per cent, of the penditure by taxation, which that its opponents could gain little is almost double the Great time by an extended discussion in the War's proportion, which for foreign relations committee, instance from 1915 to 1910 was 22 per cent. The crux of the budget was Sir John Simon's statement that financing other than by taxa- tion or loans from genuine savings must be inflation SPECIAL TO THE "TELEGNAPH" which Britain intends to avoid WASHINGTON, Sept 27 (UP).- by unprecedented financial Mr. Stephen Early, the President's Secretary, said that the Administra- efforts.

tion would refrain from any com- Though the Chancellor has obviously ment regarding neutrality measures. the budget during the initial stages, forestall any charges of Executive striven to mitigate the severity of It is apparent that the move le to his main objectives have been to pressure on Congres3. provide machinery to wring the last He also revealed that the Adminis- penny out of the country's staying-tration will keep all extraneous power during a war of three years lesucs and business, or more, if necessary.

Including nominations, from Congress untli the The budget pays not the slightest neutrality issue is settled.

heed to considerations of political popularity as indicated by the taxes on beer, sugar and the great in- erenze on low incomes.

H.F. FISHERMEN SUFFER BADLY

Property losses to the amount of over $1,000,000 have been sustained by the Chinese fishermen in Hong- kong from August 1 up to date, as a result of Japanese navai otrocities, according to information from the Hongkong Fishermen's Gulid.

Meanwhile, Administration circles claimed that 50 voles in the Senate, seven above the majority, would (your a repeal of the embargo. A "United Press" compilation placed

This would include noverat Bri lish and French islands, Noutral Patrols?

Big Sacrifices

for

On to account should we defer

cacion, or make future generations pay by borrowing.

The House would see that the children's allowance on the ground He criticised the change in the emergency budget would call several sacrifices. High as the exists that this was not the time, to dia- Under-Secretary of State, told the must. In the circumstances of war.nl sugar tax.

Mr. Sunner Welles, the U. sing ts. 6d. income-tax rate was, it urged reconsideration of the addition- courage having children, and 0 tions should patrol the areas decided increase he contemplated in the role was to have no war profits. Conference that the American na- be substantially increased.

He welcomed the tax on war pro- Sir John Simon explained that the sts, but thought that the best thing in these areas or calling at American effect in the present year, and re- upon and that belligerent submarines of income-tax could not take full poris should be interned.

Liberal Support ductions which he felt it his duty to Liberal Opposition, foresaw financial Sir Archibald Sinclair, leader of the propose in the existing allowances

of could not be made operative in ilme) burdens

Dimost Incalculable DISRUPTION IN for the collection due on January 1. weight, but we were going to face The plan he put forward was that them, and Sir John Simon had In the full year the standard rate of rendered a good service by letting Income-tax should be 71. Bd. In the country, face the facis, instead of Indulging in muddled and wishful During the present year he pro- thinking which had been prevalent

EIRE TRADE ·

DUBLIN, Sept. 27 (Router)-

£.

| the vote at 47 Democrats, ive Repub-Moving the adjournment of the Dall, posed that the rate should be seven since rearmament began,

icans and one from the Independent Mr. de Valera camp of the President.

Meanwhile,

friends and foes of

thousands of letters, telegrams and postcards.

criticism on certain points later, Sir While reserving the right to make Archibald felt that the budget, which

sald although the country was not at war the position shillings. This rate should be regard any revision are booking radio time of the community was going to bo ed as a composite rate; made up of to carry the fight to the people. The serious.

five shillings and sixpence for the Legislators have been deluged by Defending the mobilisation of the first quarter and 78. 6d. for the other deserved their support.

jwan conceived on bold lines, my, Mr. de Valera said that it was three quarters. going to prove expensive, but it was Income tax due by direct payment sider the appointment of a

He asked Sir John Simen to con- a necessary measure to maintain on January 1 next would be made at committee on national expenditure select neutrality..

the seven shilling rate, The consequences of the, war were

ito check the growth of wasteful ex- Mr. R. J. V. Everest, of the Public going to he felt.

Heavy Surtax

penditure, There was going to Works Department, hos reported to be a complete disruption of the ordin-respect of income-tax would be re-inot bring us even within the remote After indicating that allowances in Severe as the budget was, it does the Police that an attaché case, anry methods of trade. were rattan basket and clothing valued at

duced, Sir John Simon turned to aux-range. of the limits of our financial the $27 were stolen from his motor-car, would have to arrange much closer that new surlax seates should run people will necept on they become Regarding supplies, he said they tax and intimated that he proposed strength, or the sacrifees which the Fisher-No. 4185, which was parked in Sal-co-operation with the British Govern- from Is. 3d: on incomes of £2,000 to necessary ng amenna

gon Street, yesterday.-

to victory, 93. ad. for incomes over £30,000. By concluded Sir Archibald. -

Altogether 50 fishing junks either pilinged or burned by Japanese during the period. men killed totalled 66.

ment.

DRINK

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ADMISSION $3.00 INCLUDING TAX

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