War Hurts

To the staggering tax load Britons have been carrying, this week a few more pounds were added, not to make Britain's budget balance (which is impossible) but to forestall threatening inflation. Into the House of Commons strode Chancellor of the Exchequer Sir Kingsley Wood with a new war budget, calling for a record outlay of £4,207,000,000 ($16,828,000,000) in the next twelve months. The basic income-tax rate was upped from 42½% to 50%.

Britain will add some 2,000,000 small-wage earners to the tax rolls: personal exemptions were cut from £170 to £140 ($560) for married taxpayers, from £100 to £80 ($320) for single men. But these additional taxes will not be an outright gift to the Government. They will be credited to the taxpayer's account in postal savings after the war. Thus Sir Kingsley produced what was, in effect, a long-expected compulsory war-savings system for Britons.

Said he: "The burden I am compelled to impose is vitally necessary, not only to meet our financial position but to secure a reduction in consumption." No crocodile tears were these. One of the chief perils of war is inflation: rising prices because the supply of goods is inadequate. One way to keep prices down is to cut the public's purchasing power. This is a device with which Hitler has forestalled a new German inflation for several years past, and Britain had to come to it. Britain's new taxes, said Sir Kingsley frankly, are not intended primarily to raise more revenue, but "to make a considerable cut" in the public's power to buy in order to "avoid the ever-present dangers of inflation."