FOREST TAXATION IN THE UNITED STATES 425 
TAXES THAT AFFECT FOREST PROPERTY 
INCOME TAX? 
The income tax has the largest yield of any single tax in the British 
system of taxation. In the main it is a tax on the incomes of individ- 
uals, for nearly 90 percent of the total actual income of £2,520,000,000 
($12, 260,000,000) assessed for taxation in 1929-30 was distributed 
among individuals resident in the United Kingdom. This income 
tax paid by resident individuals is a graduated tax, that is, the real 
effective rate of tax levied on each pound of actual total income rises 
gradually from a fraction of a penny in the pound until, including the 
surtax, it closely approaches a maximum rate of 13s. 4d. in the pound, 
or 66% percent. Income tax paid by individuals is thus one tax on the 
total income of the individual, and not a series of taxes on the separate 
sources of his income. It is imposed in terms of a “‘standard rate” 
(5s. in the pound or 25 percent for the year 1931-32) for a “‘year of 
assessment’’ (from Apr. 6 in one calendar year to Apr. 5 in the follow- 
ing year), and there are also higher rates applicable to individuals 
whose total incomes exceed £2,000 per annum, the difference between 
the tax at the standard rate and the tax at the appropriate higher rates 
being the surtax applicable to the individual concerned. 
The peculiar distinction of the British income tax is collection at the 
source. Whenever itis possible to do so, the tax is obtained by deduct- 
ing it before the income reaches the person to whom it belongs. 
Wherever possible the formal assessment is laid, normally at the stand- 
ard rate of tax, on each source of income by itself and on persons who 
are debtors in respect of income belonging to other persons. Power 
is given to the payers of income to deduct the appropriate tax (nor- 
mally at the standard rate) from the payments made to the ultimate 
proprietors of that income. For example, instead of tax being col- 
lected directly from the various persons who may be interested in the 
rents arising from lands or buildings which are let, it is normally 
assessed on, and recovered irom, the occupier of the property, who 
deducts it from the rent paid to his landlord. The landlord in turn, if 
the property is encumbered with a mortgage or subject to a ground rent, 
may deduct the appropriate tax from the payments of those charges. 
As indicated above, graduation of the income tax is provided for by 
means of certain allowances and deductions, which brings the tax on 
small incomes to rates much lower than the standard of 5s. in the 
pound or 25 percent, and by the surtax on total incomes exceeding 
£2,000. The surtax is imposed on the total income as computed for 
income-tax purposes for the year of assessment, and is so imposed 
as a deferred installment on income for that year, payable on January 1 
of the year following the year of assessment. The scale of surtax 
rates for portions of Income in force for the year 1930-31 is based on 
the following schedules, increased by 10 percent im accordance with 
the Finance Act No. 2, 1931: 
sid | s/é 
SUS |, eee 1/0 | £8,000-£10.000____. 5/0 
Sa oS ON ak he 1/3 | £10,000-£15,000__.. 3/6 
co) oe? ie ea 2/0 | £15,000-£20,000.. 6/0 
co Ek (ies 3/0 | £20,000-£30,000_____ 6/6 
oi) | (a 3/6 | £30.000-£50,000.__.. 7/0 
SES SSG I SAF So Gee EE oh eee 7/6 
= The description of the senersl aspects of the British Income-iax system under this heading is condensed 
from a report of the League of Nations (233, pp. 167 i 
