April 29, 1910: The People’s Budget passes in England. The new legislation was the first in British history where the purpose of the budget was expressly to redistribute wealth. It was part of the Liberal government of Prime Minister HH Asquith. Chancellor of the Exchequer David Lloyd George and President of the Board of Trade Winston Churchill (called the “Terrible Twins” by right-wing contemporaries) supported the budget with unprecedented high taxes on the wealthy and radical social welfare programs. It was the main point of divergence between the Liberal government and the Conservative dominated House of Lords.
The Budget was introduced in the British Parliament by George on April 29, 1909 with the hope that a new means of moving money between strata would eliminate poverty. The income tax for those earning less than £2000 (£180,000 today) remained at 3.75%. Those earning more than £2000 were to pay 5% and a super tax of an additional 2.5% was proposed on incomes over £5000 (£450,000 today) exceeded £3000 (£270,000 today). The super-wealthy would pay 7.5% on the incomes up to £3000 and an extra 2.5% on income over and above that if they earned over £5000. An inheritance tax was also in the bill. The biggest point of contention was a land tax which entailed a 20% tax on increases in the value of the land when property was sold.
The Budget also included tariffs on imports which was seen as a way to bring in more money for the social reforms included in the bill. This part was unpopular because it would have increased the prices on imported food. The Conservative faction would have benefitted in the protection of their products since they were large landowners and their prices of their goods would have been protected. There was much debate from both sides on how to proceed and soon the entire country was divided on what should take place. It was one year to the date when the House of Lords finally accepted the Budget, but only after the land taxes were dropped.
David Lloyd George was the 1st Earl of Dwyfor and was Chancellor of the Exchequer from 1908-1915. He was moved from that position to Minster of Munitions, a new office created during World War I. He left that position and moved to Secretary of War and then to Prime Minister of the United Kingdom. He was also the leader of the Liberal Party from 1926 to 1931. During his time at the Exchequer, he helped to lay the foundations of the modern welfare state found in Great Britain today. He was instrumental at the Paris Peace Conference of 1919 and has been voted as one of the three most important Prime Ministers. It has been said that he made a greater impact on British public life than any other 20th century leader. He died in 1945 at the age of 82.
The genius of our ruling class is that it has kept a majority of the people from ever questioning the inequity of a system where most people drudge along paying heavy taxes for which they get nothing in return. – Gore Vidal
Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes. – Learned Hand
Tax reform is taking the taxes off things that have been taxed in the past and putting taxes on things that haven’t been taxed before. – Art Buchwald
It is easier to start taxes than to stop them. A tax an inch long can easily become a yard long. That has been the history of the income tax. – B. C. Forbes
Also on this day: What’s the Word? – In 1852, the third most popular book in the world is first published.
Rodney King – In 1992, riots broke out in Los Angeles.
Free, Free at Last – In 1945, Dachau was liberated.
Slide – In 1903, a landslide down Turtle Mountain took place.
Oldsmobile – In 2004, the company went out of business.