TAKING the population of the United Kingdom, 1908, at 44,500,000, and the total income at £1,844,000,000, we get an average income per head of about £40.

Thus, if the income of the nation were equally distributed amongst its inhabitants, a family of five persons would enjoy an income of about £200 per annum.

But how is the £1,840,000,000 actually divided amongst our people? Contrasts between great riches and extreme poverty are every day presented to our eyes. Can we do anything to reduce to a definite shape our vague conceptions of riches and poverty?

Investigation of the material at our disposal has convinced me that it is hopeless to do very much in the way of detailed classification of incomes. Our census methods are ridiculously inadequate, and our inquisition into individual incomes is but partial. It is possible, however, to depict the subject of distribution in broad outlines with considerable accuracy.

As we have already noticed, the £160 line at which assessment to income tax begins, divides the national income into two almost equal parts. Those persons who have more than £160 per annum enjoy an aggregate income of £909,000,000. Those persons who have less than £160 per annum enjoy an aggregate income of £935,000,000.

Let us endeavour to discover how many persons have an income of £160 and upwards.

A certain amount of confused light is thrown on the subject by the returns of the Inland Revenue Department. Under Schedules D and E, which relate to profits from "Businesses, Concerns, Professions, Employment, etc.," to use the official language,[11] the commissioners give us a record of the number of individual assessments which are made. A summary of these is as follows:—

INCOME TAX. SCHEDULES D AND E.
PROFITS FROM BUSINESSES, CONCERNS, EMPLOYMENTS, ETC.

We have thus a record of 1,100,000 assessments, but these assessments do not always correspond to individual tax-payers.

Item a, "Persons not employees," gives us the fact that 416,661 individuals are taxed in respect of trading or professional profits. Item b reveals the existence of 53,663 firms with an unknown number of partners. Item c covers a great many large and small shareholders. Item d covers a large number of investors who have lent money to local bodies. Item e similarly covers many persons of property deriving interest from various securities which are taxed "at the source." In items f and g each assessment refers to an individual.

Further, these 1,100,000 assessments are made under Schedules D and E only, which cover but £675,000,000 out of a total gross assessment to income tax of £1,010,000,000 in 1908-9. There remain to consider Schedules A, B, and C.

A moment's reflection will show that from these three schedules, which deal respectively with realty, farmers' profits, and government securities, we can expect little assistance. The assessments under Schedule A are made upon tenants, who in the majority of cases are not the actual and ultimate tax-payers. The number of assessments is enormous; we do not know it, but it would not help us if we did, for it has no relation whatever to the number of property owners. Under Schedule B, as is explained elsewhere,[12] there are few income tax payers. Under Schedule C certain interest from home and foreign government securities is taxed, but not by assessment on the actual tax-payers.

To sum up, the number of assessments to income tax is not known, and, if it were known, it would be very much greater than the number of individual tax-payers. Two-thirds of the income tax is collected, not directly from the persons who owe the tax, but indirectly or "at the source." It is possible for an individual tax-payer to appear more than once in each schedule. With delightful humour the Inland Revenue Commissioners give a hypothetical case of a composite income of £5000 per annum, made up as follows:—