TRANSACTIONS OF SECTION F. 253 



increase, there must be a great economy in the use of gold as compared with 

 what prevaile<l before the war. This can be managed by means of the gold 

 exchange standard. But there must be .some method for preventing the economy 

 of gold, which this system makes possible, from further diminishing the currency 

 demand for gold. 



International co-operation is required, and this should be directed to 

 stabilising the general level of prices as measured by index numbers, and to 

 regulating the actual amount of note issue in each country. Provided the 

 financia'lly strong countries are included the international co-operation need not 

 be universal. It can be started as soon as the Anglo-American exchange can 

 be brought to par. ■> 



5. Royal Commission on the Income Tax. Summary of Evidence 

 suhnuttecl on belialf of the British Association by Sir Edward 

 Brabbook, G.B. (Acting Chairman), and J. E. Allen, Hon. Sec. 

 of Commiittees on ' Income Tax Reform ' and ' The Effects of the 

 War on Credit, Currency and Finance.' 



The Committee on War Finance, in its Reports for 1916 and 1917, referred 

 to Income Tax, and suggested certain improvements directed towards making 

 it fairer and more productive. But the Committee thought that the question 

 ■was too large to be dealt with merely as one among several, and accordingly 

 appointed a special Sub-Committee : 



' To consider and report upon possible amendments to the law relating to 

 income tax.' 



The Sub-Committee prepared and circulated a Questionnaire and obtained 

 opinions in reply from Accoimtants, Surveyors of Taxes, and others. 



The Sub-Committee drew up, in 1918, an Interim Report, a copy of which 

 was sent to the Chancellor of the Exchequer and the Secretary to the Treasury. 

 The Committee has not arrived at a final Report, and therefore has not pre- 

 sented one to the Credit, Currency, and Finance Committee. 



We are authorised to submit the following points as those on which there 

 is a considerable amount of practical agreement in the Sub-Committee : 



1. That the Income Tax is the fairest, cheapest, and most productive of all 

 possible taxes. ^ 



2. That the tax requires to be adjusted to the much-increased demand for 

 Revenue. 



3. That it is indefinitely elastic and can be made to produce as much Revenue 

 as the citizens as a body think iustifiatile. 



4. That if skilfully adjusted to the ' ability ' of each tax-payer it imposes 

 little real burden. 



5. That a heavy Income Tax has a tendency to lower prices of commodities 

 in general, just as an inflation of the currency increases them. 



6. That a graduated Incom.e Tax, unlike most (if not all) other taxes, makes 

 for greater equality of spending power. 



7. That the symmetry and equity of the tax are marred by ' steps and 

 jumps ' at arbitrary point.'? in the scale of graduation. 



8. That the tax should be intercepted at the time when the tax-payer receives 

 his income. 



9. That the existing machinery of the tax should be preserved as far as 

 possible, and that the most useful and inexpensive machine in the tax-collecting 

 plant — 'collection at (or through) the source,' should be preserved and extended. 



10. We are inclined to suggest that the tax on salaries, wages, and other 

 periodical payments should be deducted by the person making the payments, at 

 the time of payment. 



11. That the employer or paymaster should he made the agent of the Inland 

 Revenue in collecting the tax, and that he should be given some small remunera- 

 tion for his trouble. 



* We assume, of course, the existence of a constitutional Government; a 

 despotic Government might use the Income Tax as an instrument of oppression. 



