Editing William Pitt the Younger (section)

====Finances====
[[File:National-Debt-Gillray.jpeg|thumb|In "A new way to pay the National Debt" (1786), [[James Gillray]] caricatured [[Queen Charlotte]] and George III awash with treasury funds to cover royal debts, with Pitt handing them another moneybag.]]
Another important domestic issue with which Pitt had to concern himself was the national debt, which had doubled to £243 million during the American war.{{efn|about £{{inflation|UK-GDP|0.243|1770|fmt=c}} billion today}} Every year, a third of the budget of £24 million went to pay interest. Pitt sought to reduce the national debt by imposing new taxes. In 1786, he instituted a [[sinking fund]] so that £1 million a year was added to a fund so that it could accumulate interest; eventually, the money in the fund was to be used to pay off the national debt. Pitt had learned of the idea of the 'Sinking Fund' from his father in 1772. Earl Chatham had been informed of the Welshman, Sir Richard Price's idea, Pitt approved of the idea and adopted it when he was in office.<ref>Alter 'Pitt' Volume 1 (2024) see pages 115 and 183</ref>  By 1792, the debt had fallen to £170 million.{{sfn|Turner|2003|p=94}}{{efn|about £{{inflation|UK-GDP|0.170|1792|fmt=c}} billion today}}

Pitt always paid careful attention to financial issues. A fifth of Britain's imports were smuggled in without paying taxes. He made it easier for honest merchants to import goods by lowering tariffs on easily smuggled items such as tea, wine, spirits, and tobacco. This policy raised customs revenues by nearly £2 million a year.<ref>{{cite magazine |last=Foster |first=R. E. |title=Forever Young: Myth, Reality and William Pitt |magazine=History Review |number=63 |date=March 2009 |url=https://www.questia.com/read/1G1-194427484/forever-young-myth-reality-and-william-pitt-r |archive-url=https://web.archive.org/web/20131214181515/https://www.questia.com/read/1G1-194427484/forever-young-myth-reality-and-william-pitt-r |archive-date=2013-12-14 |url-status=dead}}</ref><ref>{{Cite journal |jstor=558296 |title=William Pitt and the Enforcement of the Commutation Act, 1784-1788 |journal=The English Historical Review |volume=76 |issue=300 |pages=447–465 |author1=Hoh-Cheung |last2=Mui |first2=Lorna H. |date=1961 |doi=10.1093/ehr/LXXVI.CCC.447}}</ref>{{efn|about £{{inflation|UK|2|1788|fmt=c}} million today}}

{{anchor|Income tax}}In 1797, Pitt was forced to protect the kingdom's gold reserves by preventing individuals from exchanging banknotes for gold. Great Britain would continue to use paper money for over two decades. Pitt also introduced Great Britain's first-ever [[income tax]]. The new tax helped offset losses in indirect tax revenue, which had been caused by a decline in trade.<ref>Thompson, S. J.; "The first income tax, political arithmetic, and the measurement of economic growth"; ''Economic History Review'', Vol. 66, No. 3 (2013), pp. 873-894; {{JSTOR|42922026}}</ref> Pitt's two policies of suspending cash payments and introducing Income Tax were later cited by the French Minister of Finance as being 'genius'. As they had stopped the French from destroying Britain's economy. <ref>Alter 'Pitt' Volume 1 (2024) ''pp''375-6</ref>