The Limit of Taxation
The Chancellor of the Exchequer has admitted in the House of Commons that this year's Finance Bill, which was passed at last on Monday, was unimaginative. Sheer weariness, after weeks of unconvincing apology and ineffective reply, may have obscured the fact that this year's Budget was not merely unimaginative, but thoroughly pernicious. But even at this late hour it is impossible to ignore altogether the nonsense which the Chancellor talked on Monday about the limits of taxable capacity. He said that the limit of direct taxation had. been reached, but that more money could still be raised from other forms of taxation. But at the same time he said that taxation on incomes had been reduced by £650 million since 1945 and that this reserve could be tapped if it became necessary. All this was so much confusing verbiage, and it is difficult to believe that the Chancellor was himself taken in by it. The taxes, whether direct or indirect, are paid by the taxpayers. What the Chancellor's statement boils down to is there- fore that, if necessary, at least f650 million more could be squeezed out of those same taxpayers. No doubt it could, but the effect of such action would be to force the country back to the dislocations and improvisations of war finance, which are in themselves so exhausting to the national economy that we have barely recovered from the last bout. The immediate point is not what the country can manage to bear in war, but what it ought to bear in peace. We are so close to this second limit that the immediate problem is to find the resources, not to fight a world war, but to preserve the peace. That is the real problem which the Chancellor is called upon to face—a real problem, not a hypothetical one. And it has been created by the Government's own policy of spending more than the country can afford.
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