The Express.
London, England, 1851-08-12 00:00:00

THE INCOME-TAX COMMITTEE.

(Front the Doily Nara.)

WE published on Saturday last a report of the
first duy's examination of Sir. l'nEsst.Y, Commis-
sioner of Inland Revenue, by the committee of the
House of Commons on the income and property tax.
We will continue at the earliest possible opportu-
nity the publication of this imix)rtant testimony. In
the meantime we wish to call attention to one or
two points in Mr. PRESSLY'S evidence. That gentle-
man, it will be borne in mind, has been in the public
service since 1818; and hits been in succession Secre-
tary of Stamps, Secretary to the Board of Stamps
and 'faxes, and Commissioner of Inland Revenue.
Ile speaks with a practical knowledge of the work-
ing of the system, and with the caution of a veteran
in office.

In the earlier part of the evidence we published on
Saturday, Mr. l'itEastv gives a historical sketch of
the Pin income tax from the first imperfect Aaarhe
of it in 1798 till its repeal in 1816. Of its general
features and history we shall have occasion to speak
hereafter; our present theme is the attempt made
under the l'lrr income tax to exempt incomes below
a certain annual amount. By the net of 1798 all
incomes below 601. per annum were exempted, and
reduced rates imposed on all incomes under 2001.
Time same exemptions and reduced rates were con-
tinued in the act of 1799. The exemption of incomes
under 60/. and a different scale of reduced duties on
incomes under 130/. was a feature of the act
of 1803.

In the act of 1806, however, brought in by Lord
HENRY PETTY, a material alteration was made. Tho
exemption from the tax was taken away altogether
from incomes arising from realised property such
as lands, tenements, dividends, and interest of
money—with a few inconsiderable exceptions. The
exemption on profits of trade, instead of being con-
tinued to all persons having incomes under 60f. per
annum, was limited to incomes under 401. And for
this alteration the following reason was assigned at
the time:

By the former Act an exemption was granted on the
whole of every persou's income under 60/. pe'r annum. So
baneful is indulgence on weak minds, that this regulation,
intended to have a strict and limited operation, has been
introductive of the greatest frauds on the public. It is
notorious that persons living in easy circumstances, nay,
even in apparent tiftluence, have returned their incomes
under 601. although their annual expenditure has been
treble that sum, and on whom there was no ground of im-
puting extravagance. The incomes of whole parishes havo
been swept away by this fraud, such persons generally
bringing their incomes to a fraction below 601.; hence it is
that the legislature found the necessity of confining the
exemptions to :ad., that their former returns may be made
use of, and should the fraudulent practice continue, it may
be necessary still further to restrain it.

Mr. PuEsst.r enables us to form as approximativo
estimate of the extent to which similar frauds have
been practised or attempted, under the present in-
come and property tux, in consequence of the exemp-
tion of all incomes under 1;10/. " The number of
cases," he said in answer to the last question asked
of him on the first day of examination, " in which
parties made returns under the Income Tax Act at
►ess than LW. a year, us the profits of their trades
and professions in the year 1844-9, and claimed total
exemption, but who were afterwards brought into
assesstnent anti paid the duty, wax J,657; rind
dare say there was an equal number in former
years." Thut would be nearly 97,01 N) del( (led
attempts at evasion in the course of ten years.
These detected attempts were all cases of incomes
derived from trades and professions. In connexion
with this fact, the following passages from Mr.
l'aEssLv's evidence deserve particular attention :

Mr. 7'. Baring—ls it your opinion that the amount to
which the revenue hits been defrauded by these evasions is
considerable ?-1 am afraid that by claims of exemption it
is very considerable.
Does your experience permit you to suesrt-st any mode of
correcting it I—By Win,/ away the exemptions oJ,vm in-
comes arising from property.
•
• •

Mr. Cobden.—Arc the claims for exemption when made
by person. enjoying an income derived from a haute, or a
profinision, or a salary, more easily verified by you than
when the income is derived from real property 'l
—Yen, pro-
vided he has nu income from other sources. It is perfectly
easy to grant a man exemption on the profits of his trade or
profession, if they do not amount to 1:101., because if the
general co, missionen du their duty they have the power
of calling for the man'. hooks, and obliging him to prove
that his income is less than not. a year.

Mr. PuEssix therefore has been taught by.experi-
ence that now, as in Isfiti, the exemption of incomes
under a certain sum opens a door to fraud. Incomes
more than double of those exempted udder the
PITT income tax being now exempted, the, opportu-
nities of making false returns without incurring sus-
picion are necessarily increased. Mr. l'itEssLY finds
that in the case of incomes derived from trades or
professions, detection and the prevention of fraud is
comparatively easy, but that in the ease of incomes
derived from realised property it is almost impossible
to detect or prevent the fraud. And yet he men-
tions instances in which frauds have been committed
or attempted by the receivers of incomes from realised
property.

Will you state such examples as you can from recollec-
tion of these evasions ?—I will put a case at once: a man
tills up his claim of exemption, and states that his income is
derived from money in the funds, and from the rent of a
house, laid he leaves out altogether the sum of 400/. that he
has upon mortgage • he states that the whole of his income
consists of the dividends in the funds and the rent of his
house, and he gets exemption. • • •
Mr. J. 117/son—But is it not the case that, supposing
there is a mortgage upon an estate, the income tax is paid
in the first instance by the occupier of the estate ; it is re-
covred by him in the payment of his rent from the owner
of the estate, and the owner of the estate in paying the in-
terest of his mortgage recovers the portion of the income
tax? Yes.

So that there is no fraud in this case ?—I beg your par-
don, there is very great fraud ; the (Mud is in getting from
the tax office the repayment of the money deducted from
the dividends, and the repayment of the tux we have
charged upon the man's house.

It is obvious, therefore, that the revenue is de-
frauded to a large extent by false returns made with
a view to represent incomes above the exemption
limit as below it. The consequence of such frauds
is twofold; it renders a higher rate of assessment
necessary to raise a certain amount of revenue than
would otherwise be required; and it enables the
fraudulent to throw their share of the burden upon
the honest. This is a defect, an inequality in the
tax as at present assessed and levied, that ought to
be remedied if possible.

And Mr. PASSLT shows how it reay be easily
remedied, at least to a considerable extent. The
detections of attempted min-statements of incomes
derived from trades and profession. are many ;
the detections of misstatements of ill4ollllli derived
1 from realised property comparatively few. The ex-
emption of any amount of income derived from
realised property enables the receivers of such in-
comes to throw upon those who have nothing but
their industry to depend on an uaduo bhareof the
tax. Therefore, says Mr. PKESILY, "take away
the exemptions upon incomes derived from pro-
perty."
Into the general question, whether it is expedient
or just to admit of any exemptions, we do not now
enter. Our object at present is merely to show that
in the opinion of a gentleman. intimately acquainted
with the working of the Interne Tax Act, there is
at present an inequality in the pressure of the tax,
owing to frauds which might to a very great extent
be prevented by a very simple alteration in the law.
As the publication of the evidence proceeds we
shall have frequent oppoetunitics of pointing out de-
fects in the law, and the simple remedies by which
they might be amended. In doing this we conceive
we are working for the establishment of the law;
I while those who have endeavoured to suppress the
evidence, and yet advocate the perpetuation of the
tax, by their efforts at concealment necessarily create
suspicions that the, tax cannot bear close examina-
tion, and that itit inequalities of pressure cannot be
amended, and tb.us run the risk of exciting a popular
feeling against it that may lead to its repeal.

APPOIN'rMENTS. ADMIRAL'fT, AUGUST 11.
Muter P. Francis. to Waterloo. Second-Master G.
Stovin, 4, Shearteater. Muter's Assistant A. Gidbeth, to
ditto. Clerk-in-Charge J. M. Jefferson, to ditto. Assist-
ant-8 ogineen H. Gardner, J. King, and E. Clement., to

TUE LATE LIEUT.-COLONEL J. B. GARDINER.—
On the Bth inst. this officer died in town, after a lingering
and painful illness. lie entered the army in 1803, served
with the 50th Regiment in the expedition to Copenhagen
in 1807, in the campaigns in Portugal and Spain in 1808-91
and was present at the battles of- Roleia, Spain in 1808-9
and was present at the battles of Boleis, Vuniera. end
Commas. In 1809 be also served in the expedition to
Walcheren. From 1810 to 1813 he again served in the
Peninsula, and at the battle of Vittoria, in the latter
year, was very severely wounded. The late Lieut.-Colonel
Gardiner had received the war medal with four clasp, for
Roleia, Vardar*, Comma, sad Vittoria.