The Press.
London, England, 1857-01-17 00:00:00

THE PRESS.

the. interest on the increase of the public debt,
and there will be a charge of, we believe, about
1,500,0001. more for the payment of the prin-
cipal of the loans raised, until the amount is
paid off'. For several years to come the War
has entailed on this country an addition to its
burdens of about 2,500,000/. annually, and this
increase will be thought by most persons to
supply another strong reason for vigilant and
judicious economy in the management of our
finances. The expenditure for the ensuing
financial year may probably be fixed at about
53,000,0001., or 54,000,0001.
If we take the latter amount, which, accord
ing to the scale of expenditure of 1853, would
allow of about 17,000,0001. for army and navy,
or one-half more than was thought necessary in
1835 ; and if we suppose the net revenue of
the current year to reach 08,000,0001., the Par-
liament will have to determine in what manner
the two are to be balanced. It may decide on
a large increase of expenditure. This we
hardly think likely ; nor would such increase,
now that all the threads of the War are
gathered up, meet with the support of the
country. A very considerable reduction in the
existing seals of taxation must be decided on,
and the only practical question to be consi-
dered is, whether that reduction shall be in
favour of direct or of indirect taxation.

If the Income Tax is to remain as a per-
manent source of revenue, it may be plausibly
reasoned that on the whole it is better to
derive a large amount from this impost, and to
reduce indirect, taxation, than to derive from
it a comparatively small amount. while the
indirect taxation remains untouched, as the
inquisitorial character of the tax, and the
obnoxious machinery by which it is raised,
exist in full force whether the amount derived
from it be small or large. In fact, we believe
that beyond the question whether large and
expensive, or efficient and economical arma-
ments shall be supported, the Parliament will
this next session be called on to pronounce a
decided opinion in favour of direct or of
indirect taxation.

If arrangements are not NOW made for the
total abolition of the Income Tax, it is most
unlikely that the country will ever be relieved
from this obnoxious impost. Contrary to good
faith, it has been maintained beyond the periods
promised for its expiration. It was at first
proposed by Sir ROBERT PEEL as an extraor-
dinary aid for three years, and then extended,
that the experiment of reducing indirect taxes
might be further proceeded with. The pa•
tience with which it was borne induced Lord
JOHN RUSSELL'S Chancellor of the Exche-
quer to propose an addition to it; this was
resisted by Parliament, and other sources of
revenue were easily found. The ease with
which this impost can be augmented supplies
financiers with a continual temptation to
increase it, that compliance may be made with
the demands sure to be plentifully raised for
remissions of taxation on particular sources of
revenue.

No financier has attempted to deny the
radical inequality of the Income Tax. The
injustice in particular cases is glaring. Thus
it taxes the total income from house property,
though heavy sums are required from time to
time to be laid out in repairs. Annuities and
leaseholds for short terms are charged at the
same rate as income from perpetuities. In
very many cases, particularly as regards pro-
fessional men, a hap portion of their income
is necessarily spent in upholding establish-
ments beyond their wants and means, but
absolutely indispensable to their position and
to the localities where, for convenience sake,
they arc compelled to reside. In all such eases
the tax becomes cruelly oppressive, and its
burden is felt the more harshly from the means
used to arrive at the amount of incomes. The
surveyor is an irresponsible officer. He is
interested in raising as large an amount of
revenue as possible ; and there are eases in
which he has at random surcharged the inha-
bitants of whole districts with no better reason
than that he hopes to wring from them a larger
amount than they have returned.

All attempts to remedy the inequality and
oppressiveness inherent iu the tax have failed.
Mr. DISRAELI, in his Budget of 1852, proposed
to reduce the tax on incomes to bd. in the

SATURDAY,

pound, while the tax on property remained at
7d. This was a recognition of the injustice of
a uniform rate of assessment, but it would
only very partially have remedied such injustice,
as some incomes, in the same class, must be
much more sure, and much more clear of en-
cumbrance, than others. In the same year,
Mr. GLADSTONE proposed in his Budget that
the Income Tax should totally expire in the
year 1860, when the charge fin• annuities to
the extent of 2,150,0001. will fall in. The Par-
liament will this next session have to decide
whether that pledge shall be kept.

In determining between direct and indirect
taxation there is one very important point to
be borne in mind. It is, that practically there
is a limit to the benefit the public can derive
from the reduction of indirect taxation.
When the price of an article is suddenly
lowered by the remission of the duty upon it,
an increased demand arises which means do
not exist of supplying. The price then rises,
and frequently the whole amount of duty re-
mitted goes into the pocket of the producer,
the price rising to the point at which it stood
before the duty was remitted.
To give one familiar instance, we may take
the article of brandy. The duty was reduced
by Sir ROBERT PEEL from, we think, 21s. 61.
to 15s. the gallon. At first the price of brandy
fell ; but as the supply did not grow with the
demand caused by the reduction of price, the
rate again rose, and brandy is now, we believe,
about as dear—at all events, to the retail con-
sumer—as it was before the reduction of duty.
The Revenue has lost, the consumer has not
gained, the foreign producer has alone bene-
fited.

The relief from direct taxation is, on the
contrary, certain, and extends to other classes
than those immediately affected by it. Direct
taxation falls with severity upon capital, and
curtails the enterprises in which surplus
capital is accustomed to find employment.
The increase of the Income Tax put almost a
total stop to building, and to all branches of
industry therewith connected. The result is
severe suffering among the industrious classes.
Ten thousand honest artisans willing to work,
but unable to procure employment, met this
week in Smithfield, to declare the intense dis-
tress to which they were, without any fault of
their own, reduced. The sixteen millions of
additional taxation imposed by the 'War have
been principally abstracted from the capital
which sets industry in motion, which gives
wages to the artisan, profits to the tradesman,
income to the small capitalist, and continually
renders life more commodious by making our
large towns more elegant and salubrious.

It is very justly observed by a contem-
porary—the Morning Post—that the Income
fax is in its nature a War Tax, and should be
confined to pe►iods of war. " Its original
" designation," we are told, "in the Act of
" GEORGE M., passed in 1798, is An aid and
" contribution granted for the purposes of the
" War,' and that is, in truth, the fitting descrip-
" tion. It is not, properly speaking, a tax,
" but is rather of the nature of the benevo-
" lences ' which were granted upon urgent
" occasions—generally occasions of war—to
" our monarchs in ancient times." As a re-
source in time of war the Income Tax is in-
valuable. In any great emergency its inequality
would be overlooked, and it would be paid by
all classes with cheerfulness. If retained as
a permanent source of revenue, it must be
modified. The people will not submit. to have
all descriptions of income, from the most pre-
carious and encumbered to the most sure and
unembarrassed, taxed alike. But the very
modification that would be necessary in time
of peace, would impair its usefulness in time
of war, and when it rose high would cause it
to fall with dreadful severity upon property.
Indeed, a property tax alone, or a tax which
fell mainly upon property, would always be
liable, in cases of urgency or pretended
urgency, to be pushed close to confiscation.
A regulated tax, distinguishing different kinds
of income, would probably lead to a graduated
tax, by which large fortunes would be assessed
at a much higher rate than small ones.

The first question then in which the public
Is interested is—whether the Government

JANUARY 17, 1857.

will attempt to retain the war tax of led. in
the pound on the strength of the statute
which, literally construed, would justify such
retention. We cannot believe that any such
attempt will be made. We cannot believe
that Parliament would sanction it. We believe
that the additional 9d. in the pound will be
given up, and with it nine millions of revenue.

But will even this now satisfy the country ?
According to our estimate the net revenue,
with this reduction, would still be equal to
59,000,0001 A considerable surplus, unless
the estimates shc uld be much more extrava-
gant than can reasonably be anticipated,
would remain. In what manner shall the sur-
plus be appropriated ? If the Legislature can
be brought to decide upon the total abolition
of the Income Tax, means need not be wanting
to give effect to the resolve.
It is not probable that at any time the
Treasury will be in possession of a clear sur-
plus of 7,000,0001. If we wait until any
Chancellor of the Exchequer can say I have
hero seven millions available for the remission
of the Income Tax, wo shall wait for an event
never likely to occur. Whenever since 1842
there has been a surplus, it has been applied
to the reduction of indirect duties, though
often, as we have shown, without corre-
sponding benefit to the consumer. If the
same system is to prevail, the Income Tax
must be perpetuated. The only way to get
rid of it is, to decide that it shall diminish by
successive steps until it entirely ceases.

If the public be really in earnest in desiring
its abolition, there is no reason why it should
not finally expire—according to the promise
of Mr GLADSTONE—in 1860, when the
2,150,0001. of charge upon annuities will fall
in. The tax, for example, might be reduced
to 6d. in the pound in the present year, which
would still leave a net revenue, as wo esti•
mate, of 68,000,000/. ; and it might drop to 4d.
in 1858 ; to 2d. in 1859 ; and expire altogether
in 1880.

If some such plan be not adopted, it is vain
to expect that the Income Tax will ever be
extinguished.

When the war income tax is abolished Par-
liament will naturally have to consider the
case of the war taxes imposed on articles of
consumption. Fortunately, they are not heavy.
The additional malt duty imposed by Mr.
GLADSTONE in his Budget of May 8, 1854, did
not answer expectation, owing to the great
decrease in consumption. It added little to
the Revenue, and has already expired. Of the
other duties imposed, Mr. GLADRTONE levied
(May 8, 1854) an additional 700,0001. on
sugar, and Sir G. C LEWIS (April 20, 1855)
further increased the sugar duties by
1,200,0001. At the same time Sir G. C. LEWIS
added 150,0001. to the coffee duty.

The tea duty, which, previous to Mr. GLAD-
STONE'S Budget in April, 1853, was at 2s. 21d.
per lb., was at once reduced to Is. 10(1. per lb.,
and it was arranged that it should fall by suc-
cessive reductions till it reached Is. per lb.
When Sir G. C. LEWIS brought forward his
Budget (April 20, 1855), it had actually fallen
to Is. ed. He imposed a war duty of 3d.
extra, raising it to Is. ed. per lb., by which he
estimated he should gain 750,0001.

The additional taxes on sugar, coffee, and
tea are those which the public may fairly ex-
pect to see reduced.
The case of spirits stands on different
grounds. The additional duties levied by Mr.
GLADSTONE and Sir G. C. LEWIS amount alto-
gether, we suppose, to something near 2,00,000/.
We cannot think it advisable that those duties
should again be lowered, as from spirits the
largest revenue may properly be ruised that
they are capable of yielding. Whatever
checks their immoderate use is a boon to the
community at large.
The war taxes, then, which the CHANCELLOR
of the EXCHEQUER may be called on to reduce,
independently of the Income Tax, are :--

Sugar (imposed May 8. 1854)
Ditto (imposed April 20. 18.55)
Coffee (imposed April •!0, Imm) 150,000
Tea (imposed April 20, 1815(5)

X 2,800,000

THE PRESS.

It would appear possible to combine this
reduction with arrangements for the gradual
reduction of the Income Tax, and its total
abolition in 1860.

Similar results may be brought out in
another way. It has been shown that on the
31st of March, 1854, the last year of peace, the
Revenue amounted to 54,025,0001., and the
Expenditure to 51,171,0001., leaving a surplus
of nearly three millions. Unfortunately that
surplus will be about swallowed up by the in-
creased charges for interest on the new loans,
and the fund for their redemption. But if
the additional duty on spirits remains, there
will be an increase of nearly two millions ; and
the natural growth of the Revenue during the
last three years has also to be taken into ac-
count. On the supposition that our expenditure
is seduced to nearly the rate of the expenditure
for the last year of peace ; end that all the war
taxes, with the exception of the increased
spirit duties, are abolished, wo may anticipate
that the surplus which in 1853 Parliament
was satisfied would exist for the reduction of
the tea duty to ls. per lb., and for the entire
extinction of the Income Tax in 1860, will be
available still.

If it becomes a question between the re-
duction of the tea duty from Is. 6d. to Is. per
lb., and between the reduction and final aboli-
tion of the Income Tax, we think the public
ought not to hesitate which to choose. It is
doubtful whether a reduction of the tea duty
lower than to Is. 6d. would benefit the con-
sumer until new sources of supply—a work of
time—could be opened.
In any financial calculations formed on the
proposal to totally abolish the Income Tax,
while extinguishing also the war duties on tea,
coffee, and sugar, it might fairly be anticipated
that in consequence of such large remissions
of taxation the Revenue would show great
elasticity. With the impetus given to industry
consumption would increase, and the Exche-
quer would amply share in the benefits expe-
rienced by the community at large, and in its
rising prosperity.

Let us recapitulate :

Supposing it be decided that the peace ex-
penditure of 1853, when the total amount was
below 51,000,000/., he not—with interest on the
new loans, and sinking fund for their• re-
demption —• raised above 54.000,0001., there
will, according to the present scale of taxa-
tion, be a surplus of about 14,000,0001. The
Income Tax realises, as near as may be, one
million sterling for each penny in the pound.
If reduced from 16d. to 6d., the CHANCELLOR of
the'EXCHEQUER, with a reduction of 10,000,0001.,
would still have a clear surplus of 4,000,0001.,
and making provision for the drops in the
Income Tax for the next two years, might
arrange a margin for the reduction of the
extra duties imposed on tea and sugar and
coffee. Practically, perhaps, the choice may
lie between Mr. GLansToNE's proposed reduc-
tion of the tea duties, and Mr. GLADSTONE'S
promised reduction of the Income Tax. We
think that, looking only to the glory of pre•
sent boons, he promised far more than he
could have had any reasonable prospect of
performing. Mr. GLADSTONE took the grace to
himself, and left the difficulty to his succes-
sors. It might be desirable to accomplish the
proposed reduction in the tea duty till it
reached Is. per lb., though we doubt whether
the gradual reduction would sensibly benefit
the consume►. But between such reduction
and the extinction of the Income Tax we
think the people ought not to hesitate. It is
for them to choose. They can decide as they
please. We have been mainly solicitous to
place facts before them. The present reduc-
tion and eventual abolition of the Income
Tax is perfectly practicable if they will it.
First, they must insist on judicious and effi-
cient rather than costly peace establishments,
and, next, that the Income Tax must be re-
served as a GREAT RESOURCE in time of war. If
they fail to insist on these great principles
when our whole financial system must be
considered and revised, they are unlikely to
find so favourable an opportunity again.—All
we say is—Now, oa Navas !

53

THE INCOME TAX.

SIR JOHN PAKINGTON AT DROTTWICH.

The Right Hon. Sir John l'akington, M.P., at-
tended on Monday a public meeting at Droitwich,
convened for the Furpoie of considering " the pro-
priety of memorialising her Majesty on the present
oppressive income tax, and of passing resolutions
condemnatory of the tax and of its present mode of
administration."

The first resolution having been proposed by Mr.
Priddey and seconded by Mr. Fardon—
That the income•tax laws are, in their present form,
unjust and oppressive, and ought to be speedily repealed,
while the continuance of the tax, imposed for the support
of the war. for two years after the restoration of pence is,
in the opinion of the meeting, inconsistent and unsafe—

SirJ. PAKINOTON addressed the meeting. Referring
to the objectbins made by previous speakers against
the continuance of the war tax, Sir John said, the
additional tax had been imposed to defray the ex-
penses of the Russian war, and the act which em-
powered that increase laid it down that, considering
the impossibility of winding up the accounts incident
to the war immediately upon the restoration of peace,
the extra tax should remain in force for twelve
months after the sth of April next following the ra-
tification of peace :
It so happened—he would not say it was anything more
than a mere accident—but it so happened that the signing
of the treaty of peace was postponed till a few days after
the sth of April, and the practical result was that the
increased tax would be prolonged for two years after the
proclamation of peace. But they all felt that, though this
might be carrying out the act according to the strict letter
of the law, it was not in consonance with its spirit. And
he agreed with them that the country had a right to
demand that the spirit as well as the letter of the
act should be respected. He was not surprised at the
feeling which pervaded the country at large on this subject,
as shown through the public newspapers, and he had no
doubt that the general voice of the country would make it
imperative on Parliament to take this view of the subject.
The objections to the tax, however, were not confined to
the war portion of it, and he was glad that it could not be
imputed to him that it was from any momentary objection
that he concurred in the opinions that had been expressed
concerning it. Those opinions be had on former occasions
publicly declared in the House of Commons when he had
the honour of holding an office in her Majesty's Govern-
ment, 1111 d when Lord Derby's Government had desired to
see the inequalities in the tax rectified. He concurred
with Mr. Priddey that the owners of houses, and, he would
add, of land, paid a great deal more than their proper pro-
portion ; for they paid on the tack rent. They not only
paid on the revenue derived from the rropeity, but also
upon that which was never realised. Then he was also
ready to admit that the tax pressed harshly on those classes
which were the possessors of life incomes, whether arising
from trades or professions. He would, for instance, assume
that an individual was in possession of an income of 5001.
a year either from land or from money in the funds, and
another derived a similar income from his trade or pro-
fession. Both paid the same amount of tax, but in the
first case the taxpayer when he died left his land or his
funded property to his children, while in the second the
professional man or tradesman left nothing behind him.
It was clearly the duty of the professional man or trades-
man to save something for the benefit of his family, or to
insure his life with the same object, and the amount taken
from him in the shape of income tax would go far to effect
this. He had always thought and avowed his conviction,
which he continued to uphold, that if it could possibly be
done, some adjustment of the tax ought to be effected. He
was aware that the answer to this was, that it would be im-
possible to arrange the tax so as to meet every case ; but
that was no reason why no attempt at all should be made
at a more equitable adjustment.

The right hon. baronet then maclo a few remarks on
the Per,ian and Chinese wars, upon which explana-
tions would doubtless he given by the Government
upon the meeting of Parliament :

The war with Persia was the subject of the most serious
and threatening aspect, and was the one, moreover, os
which they had the least information. They were not in-
formed, for instance, whether this war was the result of
the policy of our Indian Government, or of her Majesty's
Government, or whether its cost was to he defrayed from
Indian revenues or from the revenues of England. Which-
ever it might be, he would follow out the saying that " Eng-
land cannot afford to have little wars."

With regard to our attack on China, we had access to
the fullest information through the published correspon-
dence which had passed between our plenipotentiary at
Hong Kong, the Chinese Commissioner, and the British
admiral. He (Sir John Pakington) had carefully read
that correspondence, and he had read it with the deepest
pain. He could not recollect any parliamentary papers
connected with public affairs which he had read with such
feelings of sorrow as those. He wished to be understood
that he abstained from committing himself to any definite
opinion upon this subject, for further explanation might
yet be offered, but he hoped that on the meeting of Parlia-
ment some satisfactory explanations would he given, and
that if we were to be involved in costly and bloody wars in
distant parts of the globe we should be satisfied in England
that we had the cause of justice on our side.

The following resolution was next put to the
meeting, and carried unanimously