CAN THE RICH PAY FOR THE WAR? 25

Yet this suggestion is a wild exaggerationbeyond what could be expected from our fiscalsystem. Indeed taxation on this scale would in-volve such wide-spread breaches of existing con-tracts and commitments that the taxable incomesthemselves would be largely reduced. An import-ant part of these incomes is spent on rates andother purposes which do not increase personalconsumption, on current resources, the alternativeuses of which are much less valuable, and on pay-ments to dependants. It follows that an importantcontribution must be obtained one way or anotherfrom the income group below £500 a year.

Nor is it practicable to put the exemption limitat £250 a year. There are about 2,430,000 personswith incomes above this level. If the whole ofthe excess of their remaining incomes above £250was taken from them, namely £1,050 million 1 andif this caused no reduction in the incomes byrepercussion (which is far from the truth), itwould only just exceed the Government'srequirements. If the cost of the war is to bemet by the income group above £250 a year, itwould mean taking from them in savings andtaxation (new and old) about three-quarters oftheir total war-time incomes, leaving them withless than a quarter of their incomes for their ownconsumption.

In the light of these figures it is not sane tosuppose that the war can be financed withoutputting some burden on the increased war incomes

1 Total available incomes of this group £1,660 million less about£610 million (in respect of 2,430,000 at £250 each).