The Stourbridge Observer, Cradley Heath, Halesowen & District Chronicle.
Stourbridge, West Midlands, England, 1878-06-29 00:00:00

THE INCOME TAX RETURNS.

The Times has the following leader on the Income Tax
returns :

The Parliamentary paper, just issued, showing the
annual values assessed to the Income Tax in the year
1876-7 is just now a document of even more interest
than it would have been when it was moved for at the
beginning of the present year. The Budget has inter-
vened between the two dates, and has brought with it
new burdens to the Income Tax payers. The "three-
pence in the pound" will have become fivepence when
the tax has to be paid next January. In the annual
values there will probably be no great change. The
yield of the tax in 1876-7 was £5,891,829. The yield
for next year is set down by the Chancellor of the
Exchequer at £8,570,000. The difference between
the two 6111113 is not quite as great as we should
expect from the increase in the tax itself. It points
not to any improvement in the national income, but
rather to a falling-off. Even when we take into account
the allowances introduced in the late Budget, and
when we remember the proper caution which leads
prudent Chancellors of the Exchequer not to estimate
their resources too hopefully, the inference from the
figures before us is still unshaken. There is great
difficulty in making a calculation of what the income
of the country really is. Its taxable income we can de-
termine precisely enough. The returns just issued show
us what this was iu 1876-7. The very large total of
£490,344,906 is made up under a variety of headings.
Lands count for something more than sixty-five mil-
lions of it; houses for nearly ninety-six millions;
farms &c., for triirty-six millions; public dividends
for about forty millions. But it is under schedule D
that the largest amounts are to be found. "Trades
and professions" stand by far the highest. In
spite of all " allowances " not authorized by the
Chancellor of the Exchequer, they still come up to
more than a hundred and thirty-six millions. Of the
other returns which depend, at least in some degree, on
the good faith of the taxpayers, individual or coporato,
the largest is under the heading of gas, railways, canal,
and other property, and it reaches to something more
than fifty millions and a half. Public companies stand
for twenty-three millions and a half; mines and iron-
works for nearly seventeen millions. We come next
to offices, salaries, and superannuations. They stand
about twenty-four millions and a quarter, and we may
be sure that as to these, at all events, no unauthorised
deductions have been admitted.

As a return of the taxable income of the country,
these figures tell us all we could wish to know. They
are, however, inaccurate inmany ways as an indication
of the national wealth, in the first place, as we have
already hinted, the assessments are not always as high
as they ought to be. The back suits itself to the
burden in quite another way from that which the
originator of the phrase intended. The higher the
tax is the more numerous will be the attempts to evade
it. If threepence in the pound produces a certain
amount of dishonesty in the Income Tax returns, the
effect of fivepence in the pound may be expected to be
proportionately greater. But, besides this, therei s
the very large number of incomes which fall pro-
perly below the taxable amount. The receivers of
weekly wages escape altogether, but the total sums
they may be credited with are no small propor-
tion of the entire national income. But, even if we
knew the facts which the Parliamentary Returns do
not and cannot disclose to us, we should still be almost
as far as ever from a knowledge of the national wealth.
A knowledge of income is a very imperfect guide to
this. It would show in many cases that certain sums
had changed hands, several times over it might be,
and they would be counted in as often as they passed
to a new possessor. The fees, for example, which a
man pays for the services of his lawyer, or of his
daughter's music-mnster, are, or ought to be, entered
as part of his income, and they ought to appear again
in the returns made by their recipients. The Chan-
cellor of Exchequer has recognized the principle that
in the case of manufacturers allowance ought to be
made for wear and te r and depreciation of machinery.
In the case of the most important and most expensive
machine of any, and the most certain to depreciate in
value as time passes—the trained human being—he has
been less kind. The omission is intentional, and it
would be in the highest degree inconvenient to rectify
it; but it is a source of error nevertheless, and as a
matter of strict right not easily defensible.
The Income Tax is so simple an engine of extracting
money, and can so easily be screwed up or let down as
occasion requires, that we cannot be surprised at the
favour with which Chancellors of the Exchequer are
apt to regard it Like all forms of direct taxation, it
is less well liked by the tax-payer. Inoirect taxes he
can evade if he plerses by ceasing to consume the taxed
article, or by reducing his consumption of it. At worst
he pays his ineney without the unpleasant sense of
getting, as he imagines, nothing in return for it. But
with the Income Tax there is no such escape or subters
.fuge.The obligation it entails must be met and must
be paid in hard cash. This, however, is not wholly a
disadvantage. IA is well s, snetimes that taxation should
be felt for what it is. That it should be so felt aa a useful
check on the demand for an increase in national expen-
diture. Under whatever heading Ws demaud may come,
whether it be for more education,. for more and more

;- •
. _

expensive justice, or for more ships and more soldiers,
those who join in it ought to be made aware of the
consequences which must follow if it be granted. If
more money is to be spent by the Government, more
money must be drawn from the pockets of the taxpayers.
There is no magical fund available for the needs of
supply. Direct or indirect taxation must produce the
whole of it. To an increase in indirect taxation there
are many objections besides the one we have already
stated. It deranges the course of business, and com-
pels the consumer to pay a good deal more than the
amount the Government obtains. The dealer in the
taxed goods must take into his account the sums he
advances for duty on the articles he keeps in stock. He
must give credit, too, and must incur bad debts, and his
losses under these headings will be greater on a taxed
than on an untaxed article. All this must be considered
in the price he charges, and his customers will be
fortunate if he sets it at no more than its jut
amount. An Income Tax is less troublesome to
all parties, while, as long as it is not excessive, its in
direct effects are comparatively trifling. Not many
persons will endeavour to save less and no one will
endeavour to earn less in consequence of it. That it is
to disappear some day has been often promised, and
the promise has been as often broken. We have now
almost ceased to attend to it. The Income Tax has
become recognised as a regular part of the burdens of
the country. In ordinary times it may be kept down
at a low figure, but when any emergency comes it
mounts up at once. Convenient as it is and fleeces-
sary as we have now come to consider it, it is yet a
source of revenue which brings dangers of its own.
The strain of a very high Income Tax is sure to
be severely felt. Up to a certain point it does no
harm, but beyond that it tends to dry up the sources
of national wealth. The sufferers are not only the
actual payers of Income Tax, but those, too, who are
dependent on the payers of Income Tax. The un-
pleasantness of the tax may do mischief of another
kind. Necessary public expenditure may be unduly
cut down in order to avoid the need of increasing the
unpopular impost. The pressure of sd. in the pound
has not yet been felt. It will be interesting to see
how far the patriotism of this year will stand the test
to which it will be subjected next January.

[From Punch.]
UNDER ORDERS;
OR, HOW IT WORKS AT WHITEHALL.

SCENE —A Council Chamber. The Chancellor of the Ex.
chequer discovered in the act of concluding some desul-
tory observations on an Irish topic. The rest of the
Cabinet asleep.
The Chancellor of the Exchequer (stopping suddenly.)
Win ! All off, again! (Nettled.) Well, there; that's
all I've got to say on the subject. [Sits down.
The Best of the Cabinet (waking up at the cessation of
his voice). Excellent! Obvious! Capital! Very well
put! Hear! hear! [They rise, and look out their hats.
The Secretory of State for the Colonies. Well, I must
be going. I'm in the middle of another volume on the
Caffres. Stiff reading! Must get through it, you
know.

The Secretary of State for Wae. Just so. And I've
got to spend the afternoon over a new facing.
First Lord of the Admiralty. And here's something
about another boiler priming at Plymouth! It's a
busy time for all of us.

ihe Lord Chancellor (drily). My Lords and Gentle-
men, it's a very busy time. Without our chief we are
all fairly overweightel. [They all laugh.]

The Chancellor of the Exchequer (thoughtfully). Per-
haps; well then—l suppose we adjourn? (opens ab-
sently the early edition of an Evening Paper.) Dtar
me! What's this? Why, here it is! It's out—every
word of it! (Shows the text of a celebrated "project.")
Every word of it 1 • What's to be done, now?

Viscount Cranbrook. What? Why, send orders to
Berlin. This will alter everything. Come, gentle-
men, there's not a moment to lose. Places!
[They all resume their scats and debate hotly and
earnestly for three hours and a half, as to the best
course to be pursued by Her Majesty's Gokernment
under the circumstances.

The Chancellor of the Exchequer (having just drawn up
and despatch& to the Kaiserhof a very peremptory and
urgent telegram On the subject.) Thera I If that doesn't
lay down the course clearly for them, language has no
meaning. I've said we're unanimous,—and determined.
It couldn't be stronger.

The Rest of the Cabinet. Capital! Well, you'll
wait for the amwer ? We're off. [They break up into
groups and go out talking volubly.

An interval of some hours, during which the Chancellor of
the Exchequer. left alone, rehearses the perorations of
several speeches Eventually, reading the Evening
Paper through twice, and finishing up with the adver-
tisements. lie is about to leave as a foreign telegram
cows.

The Chancellor of the Exchequer (tearing it open
hurriedly). At last. Now we bhall see. After all,
there are eleven of us, and it would he odd if we on
the spot couldn't keep them at Berlin well under
orders ! From the chief. I thought he would reply
fast enough. Let's see. (Starts.) Eh ! What's
this? (reads)—

" Unanimity to hand. Bathos. Don't waste your
time, but wire how the Park is looking. Things go
majestic ,Ily here. Some one has sent me a pair of purple
velvet slippers. It's an oration. Kismet I
[The Chancellor of the Exchequer utters a wild cry—and
falls fainting on the crumpled telegram as the Curtain
descends.