William Pitt introduces Income Tax (205 words)

Historical Context Note

  • Editors


In response to the mounting costs of war with revolutionary France, the British government of William Pitt introduced the first direct tax upon incomes. The deficit in 1797 had reached £19 million, of which he decided £12m could be found from borrowing and £7m from new taxation. He also wanted to reduce indirect taxation, which fell too heavily on the poorer groups. He therefore trebled taxes on windows, houses, servants and carriages, but scaled them so that those who had more paid more. He also levied a tax on all incomes of whatever kind greater than £60, a graduated scale applying to £200, and thereafter the rate being 10%. He hoped thus to raise £10m in a year. To implement the taxes a new survey of economic activity was made …

Editors. "William Pitt introduces Income Tax". The Literary Encyclopedia. First published 01 February 2010
[http://www.litencyc.com/php/stopics.php?rec=true&UID=4311, accessed 22 October 2016.]