§ 20. "That Excess Profits Duty under Part III. of the Finance (No. 2) Art, 1915, as amended or extended by any subsequent enactment, shall', unless Parliament otherwise determine, be charged for any accounting period ending on or after the first day of August, nineteen hundred and eighteen, and before the first day of August nineteen hundred and nineteen."
§ Motion made, and Question proposed,
§ "That this House doth agree with the Committee in the said Resolution."
§ Sir J. WALTON
I have always supported the Excess Profits Duty, having held from the very outset of the War that no one should be allowed to enrich himself by profits arising out of War conditions. But I must again press the strong feeling that I have as to the unequal incidence of the Excess Profits Tax. That tax ought to be levied on the income of every citizen throughout the country who is in the enjoyment of profits in excess of his prewar profits or income. Notwithstanding the speeches we have heard to-night from my hon. and gallant Friend the Member for the Barkston Ash Division (Major Lane-Fox) and others in regard to the hardships that we are inflicting upon the farming industry of the country, I must say I am still extremely sceptical in regard to that. We are told we are taxing the farmer in Income Tax six times more than we were taxing him before the War. That only shows to me how far short of what 1653 was just and equitable was his taxation before the War. All I contend for is fair and equitable treatment all round in the matter of the incidence of taxation. I submit that, as a rule, the agricultural interest in this country have been reaping during the last two years enormous profits and, at the same time, have not been contributing nearly their fair and proper share to the War taxation that has been imposed upon the rest of the country. I recognise that the question of food production is one of vital importance to us at the present time, that we ought not to discourage the farmer by imposing upon him too heavy burdens of taxation, and that we ought to treat him generously But, at the same time, I recognise that to-night, in passing the Super-tax, we have practically let the farmer off, and I do not see why the farmer, along with other tax-payers of the country who have had increased incomes, should not pay Super-tax like other people under the same conditions. We have, however, let him off unless he is taxed under Schedule D. If he is taxed under Schedule D., it is only the very largest farmers in the country who will even then be touched by the Super-tax. If he elects to pay Income Tax on double his rent then, except in a very few cases indeed, he will be absolutely free from the Super-tax that touches everyone else with an income over £2,500 a year. Listening to the hon. Gentleman who has spoken in the interests of agriculture to-night, one would have no idea of the real facts in regard to farmers' profits. You best get the facts when a farmer wishes to make a claim for some compensation. When a farmer came not long ago before the Losses Commission, apparently he had no difficulty in keeping accounts.
§ Mr. DEPUTY-SPEAKER (Mr. Whitley)
I am afraid that the hon. Baronet has missed his target. We have got two stages beyond the Resolution to which he is speaking. We are now on Resolution No. 20.
§ Sir J. WALTON
I thought I was dealing with the Excess Profits Duty. I was endeavouring to show that the farming interest get off scot free as regards this particular duty, even though they are 1654 making largely increased incomes on their pre-war average. All that I am urging is that every section of the community ought to be treated alike, and that the only fair and equitable arrangement of an Excess Profits Duty is that it should apply to everyone in the country enjoying excess profits. The Excess Profits Duty applies practically only to firms and companies. For the life of me I cannot understand why it should not apply equally to individuals as to companies. Why not also apply it to professional men, many of whom are making incomes considerably in excess of those they enjoyed in pre-war days? My protest is simply that we appear to be losing sight of the only true principle of taxation, namely, equal incidence of taxation in these war times. If a man or a firm were making huge profits in the three prewar years, then they pay practically little or nothing in Excess Profits Duty to-day, but if another firm that was experiencing lean times in pre-war years is making enhanced profits to-day, then they pay enormously in Excess Profits Duty. [An HON. MEMBER: "All right!"] It may be all right in the sense that neither in the one case nor the other are they allowed to make immensely more than prewar profits, but still, in considering the question of equal incidence of taxation, it means that the man who is best able to pay—namely, the man who was doing well in pre-war years—may pay little or nothing, and the man least able to pay, the one who has had lean years before the War, pays infinitely more in proportion. Even the Chancellor of the Exchequer does not consider that the Excess Profits Duty is an ideal tax as levied to-day so far as equal incidence of taxation goes, and in this time of financial emergency we cannot expect to carry out as fully as we could in normal times the principle of the equal incidence of taxation. The farming interest, professional men, and others who are in the enjoyment to-day of much more than pre-war incomes ought by hook or by crook to be brought within the meshes of the Excess Profits Duty, and made to pay a fair share of the burdens of taxation which are now being imposed over the whole country.
§ Resolution reported,