Again, a Super-Tax is to be levied upon all those whose incomes exceed £5,000 a year, of whom there are not less than 14,000 or 15,000. This Super-Tax is to be collected by Special Commissioners. How will these Special Commissioners know to whom to apply? Obviously they have not a list of the fortunate 15,000. They will doubtless go to work by sending a form asking for a return of total income to all people who appear to be very rich.
All the inhabitants of big houses, and, indeed, all the obviously rich, will receive a declaration form to fill up. And, of course, in order to catch the 15,000 the Commissioners will have to send notices to many times that number of people, for it is really exceedingly difficult to decide by appearance or reputation whether a man has £2,500 or £5,000 a year. The Budget provides that every person sent a form must fill it up, whether or not he has £5,000 a year. Consequently, at the very top of the scale, the Income Tax Commissioners will come into possession of personal declarations relating to 50,000 or more of our moneyed citizens.
And yet we shall not arrive at complete declarations from all Income Tax payers. Nearly all persons who earn their incomes will declare, but as to unearned incomes there is a big hiatus.
Small unearned incomes up to £700 a year will be mostly declared in order to get the abatements.
Very big unearned incomes must be declared, as we have seen, through the demands for Super-Tax.
But, between £700 a year and £5,000 a year, the unearned scale is ungraduated, and, save for the people with less than £5,000 a year, asked in error to declare by the Super-Tax Commissioners, there will be no personal declarations.
Surely this ought not to be. If the poor are to declare and the very rich are to declare, why should not the middle incomes be declared? Why should the State continue to rely, in respect of the considerable amount of income concerned, upon taxation at the source? The question becomes the more urgent when we reflect that the fresh batch of declarations brought in by Mr Asquith's differentiation scheme of 1907, noted above, brought to light many millions of "new" income (see p. 14). Every new revelation of existing income, of course, lowers taxation pro tanto.
Perhaps the final argument for universal personal declaration of income is furnished by the following enactment of the Budget of 1907:
Finance Act (1907), Section 21.
"Every employer, when required to do so by notice from an assessor, shall, within the time limited by the notice, prepare and deliver to the assessor a return of the names and places of residence of any persons employed by him."