DETAILS

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tain changes made necessary by the redistributionwithin the lower income group which it is nowproposed to make through family allowances, orby a more careful consideration of how it inter-locks with the burden of direct taxes. The revisedformula is given in Appendix IV , and its effects indetail are shown below.

(1) Children''s Allowances. The system of chil-dren's allowances under the existing income taxappears highly anomalous when it is examined indetail. For a man with an earned income of £250,it works out at £7 per annum for the first childand nothing for subsequent children; and it gradu-ally rises with income to a maximum of £18 15^.for every child. For non-income-tax payers thereis no general children's allowance, though allow-ances are paid in a number of special cases.In lieu of the whole of the present system ofchildren's allowances, I propose a fiat paymentof 5s. per week per child or £13 per annum,both for income-tax payers and for the insuredpopulation.

(2) Basic minimum income. As the basicminimum income which should be allowed freeof deferment, I propose 35s. a week to unmarriedand 45s. a week to married men. If differentfigures are preferred, this can be adjusted byaltering the percentage to be taken in excess ofthe basic minimum.

(3) Incomes in excess of the basic income. Apercentage of all incomes in excess of the basicminimum to be paid over to the Government,partly as direct taxes and partly as deferred pay;