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As the bombshell of his speech he solemnly indicated Great Britain's determination that the Lausanne Conference next June shall finally cancel both Reparations and War Debts—thus leaving the U. S. taxpayer holding the entire bag. "After the deliberations at Lausanne," said Mr. Chamberlain, "I shall submit to Parliament whatever proposals may be necessary to give effect to the measures we have agreed to." He presented in his budget no figure for such payments, either by Britain to the U. S. or to Britain from the Continent. "The best course is to refrain from all conjectures," said he, "and treat the account on both sides as being in suspense." By this technique Neville Chamberlain balanced his "maiden budget" at roughly $3,000,000.000—the lowest British balancing figure since 1924.
On the tariff side Chancellor Chamberlain of course reduced by not one inch or penny Great Britain's brand new tariff wall. The Chancellor announced a new duty on "foreign tea" of fourpence a pound, on "Empire tea," of twopence a pound. But tea-loving and beer-loving Englishmen had also expected Mr. Chamberlain to cut the beer tax.
"I believe beer has been overtaxed," said the Chancellor. "But remission . . . would cost me [the Exchequer] £10,000,000 in the present year," he added firmly, refused to make the sacrifice. Finally Mr. Chamberlain left the British income tax alone, drank a glass of water, sat down amid cheers from his party.
Most Heavily Taxed? Thus Chancellor Chamberlain did not much alter the tax status quo conjured up by that bleak British boast, "We are the world's most heavily taxed people."
Roughly the national income tax burdens on a U. S. and on a British citizen, each with a wife and two children, compare as follows in three significant income tax brackets :
Income .............................Tax U. S. ...........................Tax G. B.
$3,500 ................................nil .....................................$411
$10,000 ..............................$83 ..................................$1,926
$25,000 ...............................$933 ................................$7,588
There are no local income taxes in Great Britain.† The local "rates" (county taxes) are assessed on the rented or presumptive rental value of property. Contrarywise in the U. S., property taxes are assessed on the presumptive sale value.
As yet neither the U. S. nor Great Britain has a sales tax on manufactures, but Canada has and Chancellor Chamberlain has long been fixing his dark eye upon Canada. In urging Britain to abandon Free Trade he recalled on every possible occasion that Canada had adopted tariffs. He cried from many a hustings, "Why should we not take a leaf out of the Canadian book?"
Definitely a politician—a bargainer and adjuster—Chancellor Chamberlain now looks forward to the Imperial Conference at Ottawa next summer as his chief hope for Empire recovery. His object will be to exclude non-Empire goods by an Empire tariff wall around the Mother Country and Dominions, this with the avowed plan of later bargaining with other high-tariff countries.