Income Tax Begins at $1,000—New Taxes on Luxuries
The new Canadian taxes in the budget for the fiscal year 1918-19 show marked increases, especially in income taxes. Exemption in the case of unmarried persons is reduced from $1,500 to $1,000, and for married persons from $3,000 to $2,000, the rate being 2 per cent. from $1,000 to $1,500 in the case of the unmarried and the same amount from $2,000 to $3,000 in the case of the married. The present rate of supertax is continued upon incomes up to $50,000, and above that there is a gradual increase, reaching 50 per cent. on incomes over $1,000,000. In addition there will be a war surtax upon incomes over $6,000, running from 5 per cent. on incomes between $6,000 and $10,000 and 25 per cent. on incomes over $200,000. It has also been decided to grant an exemption of $200 per child. The total war tax on incomes over $1,000,000 reaches 77 per cent.
The tax on tobacco is increased from 10 to 20 cents per pound; on cigars from $5 to $6 per 1,000; on cigarettes from $3 to $6 per 1,000; on foreign raw leaf tobacco from 28 to 40 cents per pound, and on foreign leaf tobacco stemmed from 42 to 60 cents per pound. It has also been decided to place a tax of 10 cents per pound on tea, and it is proposed to increase the duty on coffee to 5 cents for British coffee and to 7 cents for the general tariff. There will be a tax of 8 cents per pack on playing cards and a specific rate customs duty of 5 cents per lineal foot on moving-picture films. A special war excise tax of 10 per cent. is to be imposed upon the selling value of motor cars, jewelry, gramophones, phonographs, mechanical pianos, imported into or manufactured in Canada.
The Minister of Finance stated that $258,000,000 was the revenue for the year ended March 31, 1918, with civil expenditures of $173,000,000. The increase in interest and pensions for the coming year was estimated at $25,000,000. The Finance Minister stated that the war expenditures of the last year approximated $345,000,000, of which $167,000,000 had been spent in Canada. Up to March 31 the total outlay on the war was approximately $878,000,000, which included all expenditures at home and abroad. During the last two years they had applied $113,000,000 toward war expenditures, in addition to expenditures on interest and pensions. The net debt of Canada was now approximately $1,200,000,000.
He pointed out that trade was annually increasing, and that exports were now much greater than imports. The total trade had increased since 1913 from $1,000,000,000 to $2,500,000,000 last year, the balance of trade in favor of Canada being $625,000,000. Exports to Great Britain totaled $860,000,000, while imports were only $81,000,000. On the other hand, the balance of trade against Canada with the United States was $350,000,000.
Referring to immigration, the Minister of Finance said that, in spite of the war, over 200,000 people had entered Canada in the last three years, largely farmers from the United States. He anticipated large immigration into Canada shortly after the end of the war.
War Record of the United States
An Official Summary of American Activities During the First Year of Belligerency.
By CHARLES POPE CALDWELL
Member of Congress from New York
[Delivered in the House of Representatives, May 22, 1918]
At the outset, let me say frankly that we have made mistakes—yes, grievous mistakes—and had our foresight been as keen as the afterthought of our critics we might have accomplished more. But, notwithstanding these mistakes and omissions, America has done her share—indeed, more than her share—for she has done many times more than any of our allies suspected that she was capable of doing and more than the greatest enthusiast in America hoped she could do. She has confirmed our friends and confounded our enemies. Or, let me put it in another way: America has raised and equipped a bigger army in shorter time and now holds a greater section of the fighting front, transporting her forces 3,000 miles across an infested sea, in ten months, than England was capable of doing in twelve months across the English Channel of less than thirty miles. We began with less, went further, and arrived with more in shorter time. Yet their motive was necessity and ours only desire.
When war was declared in April, 1917, the standing army of the United States consisted of 136,000 officers and men, many of whom were in the foreign service, and the National Guard consisted of 164,000 officers and men, many of whom were too old for active service, and a large part of them physically unfit to perform the duty for which they had volunteered. Our experts told us that it would take two years to raise an army of 1,000,000 men and five years to train the commissioned personnel. It has now been about one year since the first legislation was passed authorizing the increase of our army for war purposes. The strength of our military forces is now as follows:
| ARMY STRENGTH, MAY, 1918 | ||
|---|---|---|
| Officers. | Men. | |
| Regular army | 10,295 | 504,677 |
| Reserve Corps | 79,038 | 78,560 |
| National Guard | 16,906 | 411,952 |
| National Army | 33,894 | 510,963 |
| On special and technical duty | 8,195 | |
| Drafted in April | 150,000 | |
| Drafted in May | 233,742 | |
| ———— | ———— | |
| Total | 148,328 | 1,889,894 |
Grand total, 2,038,222 officers and men.
So we have today an army of more than 2,000,000, of which 500,000 have already been shipped to France and 1,000,000 more have had the necessary training to fit them for foreign service. These are now waiting for the boats to carry them over. Our critics now complain that we have not done more, yet we have done in one year twice as much as they thought we could do in two years.
When war was declared, each of our allies sent commissions to America to advise us what to do and to assist us wherever possible in our preparation. The English told us that they did not need men, but they did need money and supplies; the Italians that they did not need men, but that they did need material and money; the Russians that they did not need men or material, but did need money and ammunition; the French told us that they needed raw material and money, and asked that a small expeditionary force be sent to hearten their people and as an earnest of our intention of seeing the war through.
Under this tutelage and squaring our conduct with the requests of our friends, it was thought by many to be inadvisable to attempt to raise an army of more than 1,000,000 men. Congress was therefore requested to pass military legislation limiting the army to the 136,000 regulars, the 164,000 National Guardsmen, and 500,000 drafted men, with authority to call an additional 500,000 in case they should be needed. Under the legislation that Congress passed, in spite of the recommendation from the Allies, we have already raised more than 2,000,000 men, and early in the year 1919 will have 3,000,000 men in the army. We have lately taken the "lid off" so that the President may have as big an army as necessity requires and our man power permits. Notwithstanding the fact that the appropriation measure now pending before the House is drawn with the view of supporting an army of only 3,000,000 men, I am confident that before many months deficiency appropriations will be necessary. The army is growing so rapidly and its needs are so urgent that the efforts heretofore made will be small in comparison with those of the next twelve months. We will probably have between 4,000,000 and 5,000,000 men before the end of the next fiscal year.