asked the Chancellor of the Exchequer by how much indirect taxation would have to be increased in order to produce the same amount of total revenue if personal income tax were (a) abolished and (b) reduced by 50 per cent.
Receipts from indirect taxation would have to increase by 127 per cent. if personal income tax were abolished or 63 per cent. if the yield were halved. Such a radical change in the pattern of taxation would, of course, itself produce significant changes in prices and in the distribution of incomes and patterns of expenditure on which the above figures are based. They should not, therefore, be regarded as describing more than a highly theoretical situation.