The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1856-01-22 00:00:00

THE INCOME TAX.

WHATEVER may be the result of the anticipated
negotiations for the restoration of peace, whether we
shall have to persevere in our gigantic preparations
for another campaign, or felicitate ourselves on a
diminished national expenditure, it is a duty which
the people owe to themselves to demand a revision of
the system upon which the Income-tax is levied. We
have no wish to shrink from the responsibility incurred
in prosecuting a great war, or.to evade an equitable
contribution to the demands of the State ; but the
burden should be made to press with more equality
than it does at present. The readiness with which
this tax has been doubled, and again increased, without

any doubt as to the result answering the expectation,
offers such a temptation to the Chancellor of the Ex-
chequer to apply the screw in this direction, that
redress is hopeless, without a vigorous application of
the pressure from without ; but Ministers, even in war
time, should be made vulnerable to popular feeling,
and it will be found that there are few subjects which
more imperatively demand attention.
In the first place, the quiet submission to the pre-
sent imposition, heavy as it is, will do much to encou-
rage an increase of the burden, should the necessities
of the State, from a continuance of the war, be pre-
sumed to require a further addition to the revenue.
We have borne the seven per cent. so quietly that
there is no reason why we may not pay ten per cent.,

and so, in order to save trouble to an incompetent
Chancellor of the Exchequer, the injustice may not
only be perpetuated but augmented until the greater
portion of our incomes is virtually confiscated. The
great evil of the Income-tax is not so much the amount
which is paid as the inequality with which it is
levied; and to this point the attention of our legis-
lators should be specially directed, the more so as
the majority of them have little personal interest
in the question, except as to the amount of the rate.
If the liability applied simply to the income derived
from realised property, there would be little difficulty
involved in the subject beyond the exemption of those
of small amount ; but, according to the present system,
the man whose income is dependent on his continued
exertions, with nothing to fall back upon, and the con-
tingency of a sudden cessation from illness, or other-
wise, is liable to the same charge as the man whose
income is obtained without labour, is subject to little
or no risk, and who, whatever may be the demands
upon the interest, has always the principal to fall back
upon. In both cases the rate of taxation is the same,
though the circumstances are widely different, and so
far there is a positive inequality, involving an injustice.

Another evil arises from the mode in which the
limit of liability to this tax has been fixed, and which
in numerous instances offers an encouragement to
fraud and evasion. The man who possesses an income of
£lOO a-year, is called upon to contribute £4 15s. 10d.,
leaving him but £95 4s. 2d. to meet all other claims
upon him ; while he who has but £99 19s. 10d. is left
with the whole amount, and is therefore £4 15s. Bd.
richer than the one who is receiving a larger income.
So in the instance of a man with £l5O a-year, he is
called upon to contribute £lO, leaving him £l4O,
while the possessor of only £149 19s. has to pay-but
£7 3s. Bd., and he therefore enjoys a net income of
£142 15s. 4d.

We are aware that in any system of direct taxa-
tion there is necessarily an inequality inseparable
from such a mode of raising revenue, but it does not
therefore follow that no attempt should be made to
remove the injustice, and that it should be tamely
submitted to as if all remedy were impracticable.
When Mr. DISRAELI was Chancellor of the Eibhequer,
he proposed to make a distinction between the two
classes of income, so that the profits of realised pro-
perty should contribute more than the earnings of
labour, and had his plan been carried out there would
have been at least an instalment of justice. The sys-
tem, however, requires still further alteration, so that
the man of £lOO a-year shall not be made yearly
£5 poorer than he who receives but a fraction less.
It may be said that wherever a line is drawn there
will necessarily be great inequality where the extremes
meet, but it is not imperative that the line should be
arbitrary. A far more equitable mode would be to take
a lower limit, say £6O a-year ; which was fixed by
WILLIAM PITT as the income required for necessary
maintenance, and then impose a rateable tax upon all
income above that amount. The man of £7O a-year
would then pay upon £lO a-year,. and the possessor of
£lOO a-year, would only be called upon to pay upon
£4O a-year. The discrepancy could under such cir-
cumstances never be very great, and the burden would
be more cheerfully borne because less mixed with a
sense of injustice. On the other hand, we believe that
the total amount realised would be fully as great as at
present, so that the revenue would not suffer, while a
very large portion of the community would experience
a sensible relief.

At present the rate of Income-tax is 111 d. in the
pound upon all incomes between £lOO and £l5O a-
year, and Is. 4d. in the pound upon all incomes above
that amount. Should the exigencies of the war
require the maintenance of the present amount of
revenue, we would suggest that the Income-tax should
be fixed at ls. in the pound, or 5 per cent., upon all
incomes derivable from trades, professions, or the
earnings of labour, to be charged upon the excess Over
£6O a-year ; and that the tax should be ls. 6d. in the
pound, or 72 per cent., upon incomes derived from
realised property, to be charged in the same way on
the surplus over £6O a-year. Some little difficulty in
fixing the amount might occur in instances where the
income is derivable from both sources, as in the case of
capital embarked in trade ; but this might be obviated
by allowing a fixed per tentage as the interest of
capital, and charging the remainder as profits of
trade.

We have entered into the war with so much of
public spirit that we have been only too ready to
answer the demands made for the expenses without
inquiring into their justice or equity. The burden,
however, though borne, without complaining, for a
brief period, will not be long endured without being
grievously felt ; and it therefore behoves our legisla-
tors to be wise in time, and, by remedying admitted
grievances, render the pressure more bearable. Such
an alteration as we, have suggested would remedy
many defects, and enable the CHANCELLOR of the
EXCHEQUER to meet the demands upon him far more
readily than by an obstinate adherence to the present
system.