The new British budget for 1918-19 was introduced in the House of Commons April 23. It included some sweeping changes in taxes and gave important data of expenses. The estimate for 1918 in round numbers is $15,000,000,000; the estimated revenue is $4,200,000,000, leaving a balance to be covered by loans of $10,800,000,000. The actual expenditures in 1917-18 were $13,481,105,000; the revenue was $3,536,175,000; the deficit met by loans was $9,944,930,000.

Under the new budget the tax on incomes is increased from $1.25 in $5 to $1.50 in $5. Under the new rate the increased tax begins at an income of $2,500 a year. On an income that is wholly earned—such as a salary—the tax is as follows:

Where the income is wholly unearned the tax is as follows:

TAXES ON UNEARNED INCOME

The super tax in the new law begins at an income of $13,750, and the total taxes paid on the following incomes, including income tax and super tax, are as follows:

TOTAL INCOME AND SUPER TAX

The tax on $500,000 incomes is a little over 50 per cent. In the case of a tax-payer whose total income does not exceed $4,000 an allowance of $125 is granted in respect of his wife and an allowance of a like amount in respect of any dependent relatives whom he maintains; also an allowance of $125 in respect of children under 16 years of age.

TAXES ON COMMODITIES

Checks require a stamp of 4 cents, also promissory notes. The excess-profit rate remains at 80 per cent. The tax on spirits is raised to $7.50 a gallon; on beer to $12.50 a barrel; on tobacco to $2.04 a pound, the effect of which will increase the price 4 cents an ounce, while the cheapest cigarette, now 6 cents for ten, will be 7 cents for ten. The tax on matches is increased so that they will be sold at 2 cents a box instead of 1-1/2 cents. An additional duty of $3 a hundredweight is levied on sugar, so that sugar heretofore selling at 11-1/2 cents a pound will now have to be sold at 14 cents a pound.

A tax of 16-2/3 per cent, is levied on the sale of luxuries, including jewelry, and of articles above a certain price when they become articles of luxury; also on hotel and restaurant bills. This tax will be collected by means of stamps. The new postage rate is raised to 3 cents an ounce; on book packages exceeding one ounce an extra charge of 1 cent will be levied. Letters to the United States will cost 3 cents instead of 2 cents. Post-cards in England will be 2 cents instead of 1 cent, and the parcel rate, under seven pounds, 18 cents, and between seven and eleven pounds, 25 cents.

LUXURIES HEAVILY TAXED

The tax on luxuries is a new tax in England, and is following the method adopted in France Dec. 31, 1917. The tax on luxuries in France is levied at the rate of 10 per cent. on the retail selling price of the scheduled articles. All payments of less than 20 cents are exempted. The schedule consists of two lists, one comprising articles taxed irrespective of price at 10 per cent., and the other, articles taxed when the retail price exceeds certain specified amounts, as follows:

Taxed Irrespective of Price.—Photographic appliances, gold or platinum jewelry, billiard tables, silk hosiery and underwear, artistic bronze and iron work, horses and ponies for pleasure purposes, curiosities and antiques, sporting guns, books, servants' liveries, gold watches, perfumery, soaps and dentifrices, paintings and sculpture, pianos, (other than cottage pianos,) tapestry, truffles, pleasure boats, and yachts.

Taxed Above Specified Prices, (approximately shown in U.S. money.)—Pet dogs, $8; other pets, $2; smokers' requisites, $2; bicycles, $50; silver jewelry, $2; picture frames, $2; walking sticks, $2; chinaware table service, $40; single pieces, 39c to $3; men's headwear, $4; women's hats, $8; women's footwear, $8; men's footwear, $10; chocolates, 75c per pound; corsets, $10; men's suits, $35; women's costumes or mantles, $50; scissors, $2; lace and embroidery machine made, 35c per yard; handmade, $1.83 per yard; artificial flowers, $2; furs, $20; gloves, $1.58; furniture, $300 per suite; mirrors, $4; motor cycles, $400; watches, $10; handkerchiefs, $3.66 per dozen; umbrellas, $5; feathers, $5; clocks, $20; photographs, $8 per dozen; cottage pianos, $240; curtains, $20; carpets, $3.62 per yard; pajamas and dressing gowns, $16; horse carriages, $200; bird cages, $2.

Payments for goods bought before Jan. 1, 1918, are exempt from the tax.

AMERICA'S ASSISTANCE

In presenting the budget the Chancellor of the Exchequer stated that the expenditures in the past year exceeded the estimate by $2,030,000,000. He referred to America's assistance as follows:

The extent of the assistance of the United States and our advances to the Allies last year amounted to $2,525,000,000. In addition to this the United States have advanced to all the Allies no less a sum during the year than $4,750,000,000. Of this sum approximately $2,500,000,000 was advanced to us and $2,250,000,000 to the Allies.

The House will see, therefore, that, whereas this year we advanced to the Allies approximately the same amount as last year, $2,525,000,000 as against $2,700,000,000, the United States advanced in addition $2,250,000,000; that is to say, the total advances by us and by the Government of the United States are $4,775,000,000, as against $2,700,000,000 by us alone last year.

The House would notice that our advances to the Allies are approximately the same amount as the advances made to us by the Government of the United States. This is satisfactory. It means that it is only necessary for us to lean on the United States to the extent that the other Allies lean upon us, or that, in other words, after nearly four years of war we are self-supporting.

But it is almost absurd that we should be borrowing with one hand while we are lending with the other. The result is that our accounts are inflated apparently, and in fact to that extent our credit is weakened. I have therefore been in communication with Mr. McAdoo, the Financial Minister of America, and Mr. Crossley, the head of the United States Financial Mission, and I suggested as regards advances to the Allies a course which, if adopted, will have the effect of lessening to a considerable extent our burden, while in no way increasing the total obligations of the United States.

THE TOTAL BRITISH DEBT

In referring to the total debt the Chancellor of the Exchequer made the following statement:

The national debt, on the estimates which I have submitted to the House, will at the end of the present year, (March 31, 1919,) amount to $39,900,000,000. Previously, in counting our liabilities, I have deducted altogether advances to Allies and Dominions. I do not propose to adopt that course today. We cannot ignore what is happening in Russia; though, even yet, I do not admit—I do not believe—that we should regard the debt of Russia as a bad debt, because, sooner or later, in spite of what is happening now, there will be an ordered Government in that country.

By the end of this year the total amount due by the Allies to us will be $8,110,000,000, and I should hope that we should be able to deduct Dominion and obligation debts, making a total of $5,920,000,000. The amount of our national debt at the end of last year was $29,250,000,000. The amount of our liability on the basis I have stated is $34,280,000,000, and, taking 5 per cent. on this amount as the rate of interest, the total comes to $1,900,000,000. This, added to the normal expenditure, makes a total amount of $3,400,000,000.

Now, how is that to be met? Taking the Inland Revenue taxation alone, it amounts to $2,700,000,000. The Inland Revenue officials have assured me that they have made a very careful and a very conservative estimate. Taking this estimate, there remains a deficit on the full year of $550,000,000.

To make good this $550,000,000 I shall impose new taxation which, on the full year, will bring in $570,000,000. The Inland Revenue, in their estimate of result of existing taxation, take no account whatever of the excess profits duty, but that duty, as I have pointed out, is expected to yield $1,500,000,000.

Assuming—an assumption that may last for half an hour [laughter]—that the income tax remains at 5s, that should reach $375,000,000. Of course, that must be supplemented. It depends upon the state of trade and credit, but I think I am quite safe in saying that this amount, which they have left out of their reckoning, is more than sufficient to counter-balance any error made with regard to existing taxation.

GERMANY'S WAR DEBT

He followed this with a statement contrasting the financial condition of Great Britain with that of Germany, as follows:

Up to June, 1916, according to the statement of the German Financial Minister, the monthly German expenditure was $500,000,000; it is now admitted to be $937,500,000, which means a daily expenditure of $31,250,000, which is almost the same as ours. But it does not include such matters as separation allowances. As to the war debt, the German votes of credit up to July amounted to $31,000,000,000. Up to 1916 they imposed no new taxation at all, and in that year they proposed a war increment levy. Assuming that their estimates were realized, the total amount of taxation levied by the German Government was $1,825,000,000, as against our own amount.

This amount is not enough to pay the interest of the war debt which Germany has accumulated up to the end of the year. The German balance sheet, reckoned on the same basis as ours, will, with interest, sinking fund, pensions, and pre-war expenditures, be a year hence $3,600,000,000; and with additional permanent imperial revenue of $600,000,000 they will make their total additional revenue $925,000,000 per annum, and this amount, added to the pre-war revenue, makes a total of $1,675,000,000, showing a deficit at the end of the year of $1,925,000,000.

If that were our position I should say that bankruptcy was not far from the British Nation.

The German taxes have been almost exclusively indirect, imposed on commodities paid for by the mass of the people and not upon the wealthier classes, who control the Government and on whom the Government is afraid to put extra taxation.