INCOME TAX INEQUITIES 45

as Income Tax and Death Duties, have this enormous
advantage, that they can really be regulated so as to
press with continually increasing severity upon those
who are best able to bear them. Unfortunately our
Income Tax is still so unjustly imposed that it was .
clearly impossible to make full use of it without its
being first reformed. That two men, each earning
£1000 a year, should pay the same Income Tax, in
spite of one having a wife and five children, while
the other is a careless bachelor, is such a blot upon
this otherwise excellent tax that it is generally
agreed that the present rate of 55. is as high as it can
be made to go unless some reform is introduced into
its incidence. The need for its reform is made the
excuse for a sparing use of the tax, and we have
been on several occasions assured that, as soon as
the war is over, this reform will be set about.

In the meantime the Government falls back on
finding about 80 per cent, of its requirements of the
war on a system of borrowing. In so far as the
money subscribed to its loans is money that is being
genuinely saved by investors this process has exactly
the same effect as taxation, that is to say, somebody
goes without goods and services and hands over his
power to buy them to the State to be used for the
war. Borrowing of this kind consequently does
everything that is needed for'the solution of the
immediate war problem, and the only objection to
it is that it leaves later on the difficulties involved by
raising taxes when the war is over, and economic
problems are much more complicated in times of
peace than in war, for meeting the interest and