From the standpoint of the government, the main advantage of this mode of assessment as compared with a tax levied directly upon the recipients of the income is the greater certainty with which it reaches the income subject to taxation.  The opportunities for evasion by concealment of income are reduced to a minimum, partly because the sources of income are, in general, not easily concealed and partly because, to a considerable extent, the persons upon whom the tax is assessed are not interested in avoiding the tax.  The advantages, however, are not all on the side of the government.  The tax possesses certain advantages from the standpoint of the taxpayer, also, assuming him to be an honest taxpayer who is not seeking opportunities to evade taxation.  One advantage is that he is relieved in almost every case from the necessity of revealing to the tax officials the whole of his personal income.  The tax does not pry into his personal affairs.  Another advantage is that the tax is paid out of current income, being deducted from the income as it is received.  It is therefore distributed over the year and adjusted to the flow of income as it comes in.  A tax thus collected is less burdensome in its incidence than a tax paid in one lump sum several months after the expiration of the year to which it related and after the income on which it is levied has been all received and perhaps all expended.

The English system of assessing an income tax at the source, however, has its disadvantages.  It is admirably suited for a tax levied at a uniform rate on all income or on all income above a small minimum.  But it is not well suited for the application of progressive taxation or for the introduction of gradations or distinctions based upon the size or character of the individual incomes.  Nevertheless, the English income tax, besides exempting a minimum, provides for graded reductions or abatements in favor of the possessors of small incomes above the minimum, and for a reduced rate on “unearned” income within certain limits.  All this, however, makes necessary a declaration or complete statement of income from the persons claiming the benefit of those provisions, and also necessitates refunding a large amount of the tax collected at the source.  Moreover, the progressive principle has recently been applied by imposing a “super-tax” on incomes in excess of L5,000, which also requires a declaration, the tax being necessarily assessed upon the possessor of the income and not at the source.  The super-tax, it may be observed, occupies a position in the English system similar to that of the additional tax in the United States, serving to increase the tax upon the larger incomes in accordance with the principle of progression.