THE CHANCELLOR'S DUTY
THE Commissioners of Inland Revenue, a body to whose efficiency and common sense the community owes more than it can be reasonably expected to acknowledge, produced the annual report of its depredations last week. It is not, as a whole, the sort of document which makes the public's pulse beat faster. There was a decline of £34.8 million as between the yeat% 1952-53 and 1953-54 in the amounts collected, a comforting reminder of boons already conferred; at the same time, the machinery for catching tax evaders, it is satisfactory to record, worked much more efficiently than in the past. From the arid and precise analysis which the Report provides, however, two staggering facts can be unearthed : in 1952-53, there were only 35 people whose net incomes, after the inroads of the tax collector, amounted to more than £6,000 a year, as against 6,560 who were in the same class in 1938-39. Before being taxed, these 35 people had between them £7.2 million; after taxation they had £300,000. No doubt, the general view today is that this is no cause for tears. Even nowa- days, however, the facts relating to the £2,000 to £4,000 net income group must cause dismay: there were 110,180 of them in 1952-53; before they were taxed, they had between them £641.3 million; after taxation they had £286.6 million.
These are statistics, and as such make only a brief impact on the mind. In ordinary life, the truths they embody are driven home with more vigour. A professional man, a technician or a business executive, married with three children and earning £1,900 a year, has his salary raised by £300 but of this he sees only £158. To meet every fresh source of expense, such as the education of his children, he has thenceforward to earn some- thing like twice as much as he needs for the purpose, and of course rather more than that as time goes on. Unless we are prepared to assume either that the exertions of this middle class are not important to the country's welfare or that their exertions will be forthcoming irrespective of financial rewards, this is a desperate state of things. Two questions must be carefully differentiated and frankly answered : the first is whether the country wants this section of the population to increase its efforts. Since it includes the great majority of those on whose inventive skill and directive ability the nation's material wealth depends, and since the nation's desire for material wealth is daily increasing, it is obvious that increasing the productivity of this class of producer ought to come very high on any government's list of aims. In private transactions, no one supposes that people of this kind are indifferent to money, and the present level of taxation is only another instance of where statesmanship parts company with common sense. lor's duty in his next Budget is clear, though not easy. Mean- while, it is satisfactory if surprising to record that of the seventy- four prosecutions for tax offences in the year 1953-54, only one of them concerned an assault on a tax collector.
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