2 APRIL 1965, Page 13

nine increases in the profits tax since 1946 have not

prevented dividends increasing substantially faster than wages. Dividends last year were 12.8 per cent higher than the year before; but if the Government's new corporation profits tax and other tax changes are such as to prevent dividends increasing by more than 31 per cent they arc likely to undermine in- centive in the same kind of way as the excess profits levy of 1952. An incomes equalisation tax of the kind proposed by the Economist would also be likely to undermine incentive if it really did•prevent dividends from increasing by more than 31 per cent.