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Page Two August 5, 1942 (Column 1) STRAIGHT TALKS ON NEW INCOME TAXES Personal Sacrifice Required Of Everyone In War Effort "This Is No Time For Airy Overconfidence," Says Finance Minister Luxury Living Must Go Every Canadian Must Reduce Standard of Living "Do Canadians realize how critical the situation is at this moment in Russia, in China, and in the Middle East, and how critical it may be elsewhere before long? I believe that now they do and that their individual desires for gain, and ease, and advantage are submerged in the nation's will to win. In this belief I present this budget to the House and to the Canadian people." With these words, the Minister of Finance announced the biggest budget that Canadians have ever been asked to accept, with personal taxes ranging up to 98% and Corporation taxes up to 100%. "This is no time for airy overconfidence," said the Minister. "Events in China, events in the Ukraine, events in the Crimea, events in Libya, do not these convince us that the war may not be won this year, may not be won for many years? It was not recklessly that Germany and Japan brought the United States into the war, as they did. What foolish statements we have made! Not long ago, how often it was said that Hitler was a madman, irrationally running headlong to destruction, that Japan was committing hari-kari! Alas, there seems to have been nothing irrational certainly nothing intentionally suicidal about the plans of our enemies. These aggressor nations prodded the United States into the war because they were convinced that they could, nevertheless, win win in 1942." Mr. Ilsley told us what we now know and the situation has grown steadily worse since his memorable speech, which he drove home by proposing a joint tax and savings programme that would have been scoffed at under different circumstances. Canada is in Peril Canada is in grave danger of defeat because the enemy is still stronger, far stronger, than the Allied Forces, even after almost three years of back-breaking work and heart-breaking reverses. We are now producing explosives, and turning out shells, tanks, guns, planes and ships in the quantities that will destroy the forces now ranged against us, but we can only produce these materials and equipment if we meet Mr. Ilsley's challenge to hand over an average of 30% of our total wages and salaries as taxes and to double our voluntary savings as well! Why Does the Government Need Money Firstly, the Government needs your money to pay for all the war materials now on order, to keep our forces in the field and in training, to pay for the food and other supplies that must be sent to England, our European bridgehead, and to keep this country running in wartime. These are the greatest needs on the surface, but you do not need to be an economist to realize that there are other aims almost as important. Every Canadian, man and woman, must do his or her part, whether it be behind a gun, a lathe, a shovel, a plough or a desk! Each and every one of us must do our utmost for the war, sacrificing our present comfort for the future of our Canada and our children's Canada. If we continue to spend our money on luxuries and comforts, we encourage men to work to produce and sell goods that do not help to win the war. These men are kept away from war jobs and our airmen, sailors and soldiers have to go without equipment so that we shall not go without luxuries! In order to produce all our war needs, we must not only go without comforts and luxuries but we must also cut down on expenditures that were previously considered necessities. Therefore, we must live on a comparatively small portion of our wages or salaries and must turn the balance over to the Government as taxes, War Savings Stamps and Certificates, or Victory Loan Bonds. (Column 2 Inset) MORE TO COME IN NEXT ISSUE In the next issue of The Commando, a fuller explanation of the new taxes and what you will have to do to meet the Government's requirements will be published. The messages in this edition are designed to give you some idea of the size of Canada's responsibilities and your own so that you can start planning right away how and where you can reduce your living expenses to meet these obligations and help win the war. (Column 3) SAVINGS MUST BE MAINTAINED FOR VICTORY Probably most of us said, after reading the new tax rates, that we would have to cut down our savings that we wouldn't be able to afford to save. In this crisis we cannot afford not to save. Increased taxes mean decreased spending, not decreased savings. Everything we value is at stake and we stand to lose all if our effort is too small, too complacent, too luke-warm. These are the figures that Mr. Ilsley gave in his budget speech as Canada's expenses in the coming year: Direct War Costs, etc. $2,300,000,000 Supplies to Great Britain............................1,000,000,000 Costs of Government and miscellaneous 600,000,000 $3,900,000,000 To be met by taxation $2,145,000,000 To be met by Savings Certificates, Victory Loans, etc.....................1,755,000,000 $3,900,000,000 The figure for War Savings Certificates and Victory Loan Bonds is double the annual amount now being saved. A great burden thus falls on us and unless we accept it we shall fall short of our maximum effort and fail in our duty.(Column 4) $10 Million Daily Reprinted from Globe and Mail Over $10,000,000 a day is what the Canadian people must provide to the Federal Treasury in this fiscal year, which ends on March 31, 1943. About 52 per cent will be supplied by tax revenues and less than half the total amount by borrowing. Last year about $1,800,000,000 was raised by loans of various kinds and a similar amount will have to be raised this year, and over $2,000,000,000 by taxation. What is more, the new tax program means that the individuals will have to provide more by loans to the Government than the corporations which, because of the fact they will be hit harder, relatively, than the individual by the new taxes, will be unable to lend as much as formerly. (Column 5) New Taxes Will Be Deducted From September Earnings Tables Show Maximum Taxes Payable Deductions Will Be Somewhat Lower Adjustments To Be Made In Income Tax Return in September 1943 Tables showing the total taxes payable at the new rates by single men, married men with no dependents and married men with two dependents are shown below. The tables have been prepared for weekly and monthly pay periods and, if you are paid every two weeks or each half-month, you can easily calculate your own taxes from these tables. These are not the taxes that will be deducted from your wages or salary they are the maximum taxes that you may have to pay. The amount that the Government will return to you after the war is also shown in the tables and you will be allowed to deduct life insurance premiums and mortgage payments from this portion of your taxes, thus reducing the total amount payable. Deductions From Pay Deductions from your wages and salaries will commence in September and will be somewhat lower than the total tax payable as shown in the tables, to allow for your insurance premiums and other exemptions, but you will have to file a tax return in September 1943 and pay any balance of tax that has not been deducted, from your earnings. National Defence Tax will be deducted up to the end of August 1942 and the amounts deducted from your pay this year will be allowed to you as payments on account of the tax to be collected after the end of August. Starting in September the deductions will be much greater and you will see from these tables that the Government requires us all to make considerable changes in our way of living. You are urged to start preparing for these changes now, rather than wait until September. We must not grouse about our war taxes, even though they are now nearly comparable with taxes in England. Let us be frank with ourselves with the exception of those who are overseas with the Armed Forces and those who have already lost sons and relatives, we have not really suffered any personal loss or inconvenience as a result of this war. It is true that we have a little less sugar, a little less tea, a little less coffee, a little less gasoline but we do not spend our nights in air raid shelters! Our roofs keep out the weather and our windows are not blown in! Taxes are the price we pay for a very comfortable way of living and, now that the Nazis have shown us what we could expect under their rule, that price cannot be too high. Onerous Taxes Will Beat Axis Canadians from Coast to Coast worried about New Taxes But Determined to Provide the Money to Beat Hitler In the early days of motoring, when the Ford Model T was the most frequently seen car on the road, there was a joke about it to the effect that when a Ford panted its way up a hill, the exhaust was saying "Can I do it, can I do it, can I do it?" and somehow, it always or nearly always did do it. Since we heard about the new taxes which will go into effect next September, most of us have been like the Model T, thinking to ourselves "Can I do it?" There is no question about us being willing to do it, but where are we to find the money for new taxes, and for payroll deductions for War Savings Certificates and Victory Loan? Suppose we start with ourselves. What do we mean when we say "We are willing." Do we mean we are willing to pay taxes, buy War Savings Certificates and Victory Bonds to help win the war just so long as it doesn't interfere too much with our Continued on Page Five