30 APRIL 1954, Page 4

Too Late for the Budget

The second report of the Royal Commission on Taxation may still produce political complications before the next Budget appears. The middle-class taxpayers are unlikely to forget the tempting morsels held out to them in the report. Not that the concessions suggested are undeserved, or unfair to the other taxpayers at the highest and lowest levels. The present sudden jump in the marginal rate of tax from 7s. in the pound for incomes of £2,000 a year to Ils. at £2,026 always was a scan- dalous anomaly and the proposal that it should be smoothed out by lowering the surtax starting-point to £1,500 for a single man, and raising it for married men, with additional rise for those with children, is not much more than common sense. It is much the same with the proposal that the child allowance should, within fixed limits, vary with the size of the taxpayer's income, for, as the report very clearly shows, at the moment the middle classes get a particularly raw deal in this respect. At the £500 a year level single men pay £56 12s. 2d. in tax, married men £32 4s. 5d. and married men with two children £1 2s. 2d. or, in terms of proportions, 100, 57 and 2 respectively. But at the £2,000 a year level this steep gradation in favour of families with children disappears, single men paying £568 10s., married men £528 and married men with two children £451 10s.-- int terms of proportions, 100, 93 and 79. This is all wrong. Wita is more, it is the kind of injustice which it may be possible to put right without starting a class war. The chief trouble is tbs.! both these main changes recommended by the Commission would mean a loss of revenue; and, since the Commission 1.1 charged to avoid that as far as possible, the acceptability e its present proposals will partly depend on any later proposal' it may make for revenue gains, elsewhere. So the taxPaY,,,c0 must wait not only for the next Budget but also for ww remaining parts of the Commission's report before they 101°, their fate. But in the meanwhile the middle classes will champing hopefully at the bit.