The Sun.
London, England, 1852-09-11 00:00:00

LONDON, SATURDAY

THE INCOME-TAX.
(From the Times)
We can imagine the c.-;vJcatos of an undiscriminating
income-tax looking with some complacency on the
proceedings now reported, and deriving from the stormy
and complicated discusslons of the day a now argument
in favour of uniform injustice. " You see it is just es
we told you. You bavo had your own way, and you
can make nothing of it. You got a Committee, but the
Committee could come to no conclusion. You debate
the question among yourselves, and you can arrive at no
result. You are all at sixes and sevens, and you will
have to confess in the end that what we said was the
truth, and no less—that it is utterly impossible to discri-
minate between sources of income, and that the only
possible principle of assessment is a single fixed rate of
impost on all returns, whencesoever derived." Some such
observations we are quite prepared for, but we can very
confidently assure these crafty speculators that the end of
the business will be in no sort such as they ancicipate.
That there may be some degree of difficulty in
ascertaining distinctions vowed to be undiscoverable, we
freely admit. But the public will at least never revert
to the doctrine, that solid property and precarious earn-
ings, though the most contrasted of possessions i❑ every
transaction of daily life, are identically the ssme for the
single purpose of State taxation. We shall find some
standing ground there is no doubt, but, in the meantime,
propositions have been started which exceed in boldness
even the maxims of official financiers. The old Govern.
ment doctrine merely maintained that the distinction
which everybody telt to exist between realised sub-
stance and professional receipts could not be practically
regarded in a system of direct taxation. The differences
itself was not denied, but it was represented as possess-

i❑g so many ramifications as absolutely to preclude any
equitable adjustment. Now, however, a class of econo-
mists, not without pretensions, has ventured to assert
that the distinction has no _ existence at all, and that,

though there may undoubtedly be a popular prejudice
in favour of independent property as compared with
fluctuating or uncertain gains, the returns yielded by
these two species of possessions should be considered as
identical in the eyes of a tax collector. Some difference
there may be, but it is no difference yuoad hoc. Such
is the new proposition which we have even seen invested
with considerable impressiveness by the aid of alge-
braical symbols. Omitting, however, the language of
mathematics, we think stn can make the question clear
enough for general reflection.
The ground taken appears to be this:—That if a tax
is to be laid upon income, one income of 1,0001. a year
must needs be as good as another income ot' the like
amount, so long as it lasts; that the only difference be-
tween the two consists ie incie respective certainties,
and that as no contributor is expected to pay excepting
for the period during which, by his own acknowledg-
ment, his income has maintained itself, such income
must, for this particular period, have had exactly the
same certainty as any other. If a man is clearly and
plainly in receipt of 1,000/. per annum as a barrister or
a banker's clerk, he is to all intents and purposes worth
1,0001. a year as long as these returns cowinue. When
they cease his payments cease also. His taxability goes
hand-in-hand with his income, and if one is precarious
so is the other. The difference between temporary and
perpetual receipts is accounted for in the difference be-
tween temporary and perpetual taxation. If a man
earns 1,0001. a year for one year only, he pays for that
year, and no longer; if his profits fall off to 500/. his
tax diminishes in the same proportion; and if they
vanish wholly his obligation vanishes too; whereas
the possessor of land or Consols, if unceas-
ingly supplied with income, is also as un-
ceasingly a contributor to the necessities of the
State. Transitory incomes induce transitory taxation;
permanent incomes permanent taxation. The State
which collects the year's revenue for the year's expenses
can look at nothing in the cases of individuals except
the actual income of the year for which the reckoning is
made. Such we conceive to be a fair popular exposition
of the views in question.
There never, we do believe, existed a subject on which
it would be more difficult to produce conviction by ma-
thematical formula. However cogently the conclusions
of algebra may be expressed, the common sense of every
man in the kingdom would induce him to rebel against a
result which proved 500/. a year in land to be no better
than 500/. yearly salary. The argument would fare like
that of the Protectionists, when they brought statistics
to show well fed labourers that they were starving. But
in the present case wo can hit the fallacy without diffi-
culty or doubt, and we join issue at once by asserting
that an income from daily labour is not the same thing
as an income from realised property, oven for the single
year to which the view in question is confined. Assuming
that the State can only regard the existing abilities of
its contributors at the moment of their contribution, we
say that the existing ability of a man earning 5001. a
asnicngle moment equivalent to the
e. And if not the means of a
cpyoeerrarmre sabpnyoe nlnadebienatignradibsailbaittuyn n
abundance.
a man enjoying a like income in
contributor, but his obligation to the State for a year's
protection is to be the measure of his contribution, we
say, further, that the debt of the former of these men is
not identical with the debt of the latter.
The argument before us is reducible to this plain as-
sumption—that money actually in possession is always
practically of one uniform value, whether it flows from a
permanent or precarious supply—whether there is more
forthcoming or none. According to this theory, a man
with 1,000/. for one year and an undiscernible income
for all years succeeding, is in every respect as rich a
man for that year as another with 1,0001. in perpe-
tuity. Now, is this so understood in the ordinary
business of life? Could any person, at any period of
that particular year for which his incomo is pre-
sumed, command the same credit, maintain the
same position, or indulge, without prudence, in
the same expenses as the other? The common sense
of every reader in the kingdom would answer—
No. A person thus precariously provided would not be
estimated, for any purpose whatever, at the same rate
as his independent neighbour. To take a familiar ex-
emplification—he would certainly not be expected to
contribute equally to any local or municipal institutions;
and why, then, should be be rated otherwise in respect
of the national revenue ? But further, if the doctrine
is sound it will bear carrying out ; and let us see what
it comes to. If a man with an income of 1,0001. for one
year is as good for that year as another with the like in-
come in permanence, a man with 500/. for six months is
also as good for that diminished period, as is likewise
another with 80/. for a single month, or 20/. a week ;
and, by pursuing the argument, we shall find that a
person with 3s. in his pocket is quite as rich, for the
space of an hour, as the possessor of an annual thou-
sand ; during which sixty minutes he may live ac-
cordingly, and must contribute proportionately to the
State. Was there ever such absurdity ?
Take another view of the case. Two men are called
upon to contribute to the Exchequer in proportion to
their means. One possesses 1,000/. a year from Consols,
if each of these pays his 7d. in the pound, and neither
another the like income m
fro business or labourN
. ow,
p a large portion of his proper obligation. He has
more nor less, it must be perfectly clear that the former
gesoctatheessame income as the other. Granted: but he has
-c-ertainly got something besides, for whereas the whole
possession • sof one are represented by his 1,000/. of earn-
ings, those of the other could be increased at any mu-
ment
by any portion of the whole of 30,000/. capi-
en income of 1,0001., and the other a
plus a capital of thirty times the amount,
andm
under the system before us,
similar
ila Otrhn iinese hasomc aap
pays no tax at all. If it be said that it is only upon
its returns that any species of possession is thought
taxable,
it and
pays
thatif capital pays upon the interest
yielded sufficiently, we ask what is meant
by property and income-tax, and whether it is really
desired that property, as distinguished from income,
should not only pay no more that income, but actually
pay nothing whatever? This brings us to the point
considered in the letter of our correspondent
whioh will be found elsewhere. For the purpose of
argument, each contributor may be supposed possessed
of a capital and an income. The capital of the inde-
pendent proprietor is his land or his money; that of the
professional man or trader his learning, his industry, or
his skill. Now, even if the incomes of these contri-
butors are to be reckoned pound for pound without
tt
ahlast
of their
former
capitals
the
edaisatninoettihoen,soit
tirseapteerdf: ectly manifest
for
class are convertible at will into an aggregate of
thirty years' income, whereas those of the latter, if
the cap
negotiable at all, would not produce one-fifth of the
amount. Property generating income with infallible
certainty while its owner is asleep, and which can be
turned at any moment into thirty times its annual yield,
is clearly more than equivalent to property which can
only generate a like income under the anxious applica-
tion of its possessor, and which can be turned into
scarcely any aggregate at all. Many readers, we have
no doubt, will think we havei been at strange pains to
demonstrate what needed no such demonstration--vii,,that 1001., together with the capital which produced it,
is a better thing than 100/. without this capital—and the
truth of the case is indeed plain enough to commend it-
self to instinctive reception. Still it is as well to
expose the fallacies which argument occasionally pro-
vokes, and in the present instance the distinction be-
tween solid property and precarious income can be shown
in terms quite as scientific as those employed to establish
their identity.