The Sun.
London, England, 1852-07-31 00:00:00

THE INCOIII.E-TAX COMMITTEE.
The following drafts of report and resolutions
were respectively submitted for consideration by Mr.
Hume, Mr. Sotheron, and Colonel Romilly to the
Select Committee of last session on the income and
property-tax :
Draft of Report proposed (Mr. flume), brought up, and

read a iirat time.

Your Committee, which wax oppointed "to inquire
into the present mode of assessing and collecting the in-
come and property-tax, and whether any other mode of
levying the same, so as to render the tax more equitable,
'can be adopted," have proceeded in their inquiry, and
have examined witnesses thereon, and have come to re-
solutions which they have agreed to report to the
House.

Your Committee began thbir inquiry in the examina-
tion of Mr. Pressly, the intelligent Commissioner of
Inland Revenue, and of other public officers of that de-
partment, whose evidence will afford full details of the
manner in which the income and property-tax has
hitherto been assessed and collected.

They also examined Mr. Farr, of the General Regis-
ter-office, under whoa° direction the English Life Table,
referred to by the other witnesses, was constructed, as
to the general principles upon which a tax could be
assessed equitably upon all property. and as to the prac-
ticability of constructing tables which might facilitate
the assessment of an equitable property-tax.
The results of the inquiry of your Committee are sub-
mitted under three separate branches, as the best means
of bringing the !abject more distinctly under the con-
sideration of the House, via :-
1. On the present mode of assessing the income and
property-tax.
2. On the present mode of collecting the same.
3. Whether any other mode of levying the income
and property-tax, so as to render it more equitable, can
be adopted, and observations thereon.
I. ON TEE kRESENT MODE OF ASSESSING THE INCOME
AND PROPERTY-TAX.
1. That it appears by the evidence before the Com-
mittee, that the assessment under the Act for granting
to her Majesty duties on profits arising from property,
professions, tredes, and offices, violates the principles of
equitable taxation in several respects.
That many alleged instances of hardship, inequality,
and abuse under the existing Act have been pressed
upon the attention of your Committee; that circum-
stances did not allow your Committee to investigate the
cases of individuals from whom applications and state-
ments of their grievances had been received, but com-
pelled it to confine the inquiry to the general operation
of the Act on large classes of the community.
esEquAtiznes IN THE ASSESSMENT OF REAL AND

PERSONAL PROPERTY.
2. That the property in lands, tenements, heredita-
ment, or heritages (under schedule A) is not assessed
uniformly in the several parishes all over the country
and that it is in no case assessed on the net annual rent
or income derived from such property, but is assessed
generally on the gross car rack-rent thereof, without any
allowance being made for the necessary outlay in the
repairing and upholding of the perishable parts of such
property, or for the losses incurred in various ways in
the management.
3. That in certain cases of fines of manors, or of leases
renewable for terms of years, the copyholder and lease-
holder, who have partial interests only in the property,
are taxed on its full value, which is defined to be the
rack-rent at which the lands are worth to be let by the
year; they have no right, by the Act, to deduct the tax
chargeable on the lord of the manor or the landowner,
who is also taxed on the amount of his fines. Neither
have life-tenants, nor tenants for short terms, the right
"of recovering the proportion of the tax justly chargeable
on the persons in possession of the reversion; and where
large, lasting improvements are effected by tenants for
limited terms, they ere taxed upon the full value of the
property, which belongs to the landlord at the termina-
tioi of their tenancy.

4. That in respect to property in houses, the injustice
of the assessment is greater than it is in respect to
lands, as the tent of houses includes not only the profit
of capital, bat a part of that capital which, in certain
classes of houses, constitutes a considerable portion of
the rent; and no allowance is made for the loss of rents,
for insurance, or for repairs.
5. That in respect to property in canals, docks, rail-
ways, and other works, us well as in mines and quarries
which may be exhausted, the assessment is also unjust,
as the tax is M many cases levied not- on the profit only,
but on a part of the capital; and also on that part of the
dividends which, in speculative undertakings, can only
be considered in the light of a premium of insurance
against the risk of loss of capital. This is clearly
shown by the dividends and the price which such stock
bears in the market.
6. That under schedule C several classes of the public
creditors are assessed unequally and unjustly; that
whilst the holders of the Three per Cent. Annuities in
perpetuity are assessed at the rate of 7d. on every 20s.
of profit or interest, the holders of life and terminable
annuities are taxed at the rate of 7d. on every 203. of
the annuity; which consists of the interest of the capital,
and a part of the capital repaid, variable in amount,
which the dividends of such annuities always include.
Thus, as an example, at the proseat price of Government
stock, the capital returns a profit or interest of 3 per
cent. per annum; whilst the market value of the Long
Annuities of 1,210,7981. in England, quoted at 6i years'
purchase on April 6, 1852, after the opening, was
8,021,5371., the profit or interest on that amount was, at
the rate of 3 per cent. per annum, 240,6461.; and a:tax
of 7d. in the pound on this profit would amount to only
about 7,019/.•' but the tax actually levied on the Long
Annuities in England is 35,3151.; viz., 7d. in the pound
on the interest (240,6461.), and 7d. in the pound on the
returned capital, 970,152/.,which is included,in the yearly
dividends of 1,210,7951.*
The annuitaurs of this class are therefore taxed in the
year at the rate of 35 pence in the pound on their pro-
fits; and, inasmuch as the interest decreases every year
as the capital declines, it follows, that if the tax of 7d.
remain the same, the rate of taxation in the pound will
every year increase, until the term of the annuity ex-
pires (in 1860).
And all the holders of terminable and life annuities
are assessed on their profi‘s and capital in like manner
unjustly, some to a lass, and others to a much greater
excess. _ _

And if the income-tax of 7d. in the pound should be
continued until 1860, the excess of taxation levied under
it, on the Long Annuities alone, will amount at interest
to mere than 635,6701.
7. That while the subjects of her Majesty who have
property in thu public hinds are not, on general prinei
pled, entitled to exemption from the taxes levied equally
on land and other property, they have just ground to
complain c the inequality of the income-tax. The un-
%gnat assessment on the profits of different classes of the
public creditors, of which the above annuities are an ex-
ample, is not only a violation of the first principles of
taxation, but a breach of the public
faith, and, if per-
sisted in, may render difficult for the future a class of
loans which, by ensuring the li
etion of the debt in a
definite time, aro less disadvac'iltiageons to the national
interests than loans in perpetuali
8. That your Committee ae annuitios•
n reason to believe that
_o
the profits of llands,tenements, hi er..editamente, or heri-
tages, in respect of the
annon„thereof, as assessed
u
under schedule B, are to the
in
England,al value or rack-rent
in the proportion of 7 to 14
Scotland. The rent is a variable proportion or 5 to 14 in
of the value
of the produce, and in the absence of more direct infor-
mation may be merle the belie of a loose estimate of
profits in particular cases; but the assumptione the
that in
arable and pasture and other farms the profits in the
u
various parts o! Great Britain is in these invariable
lre-
lations, is far from the truth, and must operate unjustly,,
not only in individual cases,
3, the but in large classes of cases.
Under the recent Act, 14 Viet., c. 12, 1. inequality:
has only been partially rcotified by allowing an appeal
where the parson assessed can sow h that the profit
o t is less
than is charzed in the assessment.
.1 as the current 9. That the farrier 'a income, as wel
in-
come of persona assessed under the. schedules B, D, and
E, and engaged in trades, manufactures, and commerce,
is in part derived from capital employed in the business,
and exposed to risk and to vicissitudes of various kinds.
It includes, besides net profit, the return of capital in-
vested, and in successful years a premium of insurance
against loss of capital in years of failure and misfortune;
but that a part of the incomes of farmers, manufacturere.
merchants, and other persons engaged in business, and
nearly the whole of the incomes of persons in professions
and offices assessed under schedules D and E, are de-
rived from the direct exercise of industry and ski.l. To
the contingencies cf business are here added ill health
and the certainty of death when labour and income
'lease. That incomes from professions are therefore of
th_ 0 nature of life annuities, which they cannot exceed in
value.p
The capital invested at risk in subsistence, ecia
tlm-
. and protracted preparation may be lost by un-
is, clini,:b but
is returned in income where large '
into or Classes are concerned. A tax on the current
at(11 ctif all the persons assessed under schedules B, D.
only ma !_elo nseqnently unjust, as it is a tax assessed not
Pr tit, but also on a variable proportion of capital.
Mr. ,-,_es:-X;EMPTI,)NS PROM ASSESSMENT.
incomeftrax 14: evidence affords a brief history of the
1798-9, and alas al its first imposition by Mr. Pitt in
wee afterwards of the grounds for the alterations that
wide in the provisions of the Act are
clearly stated; b
to obtain satiefZto7;'" Committee have not been able
Pee l introduced th, tilriidence why, when Sir Robert
re 1842, he made the exemp-
tion
of incomes under
of Inland Revenue were The Commissioners
,ziB.oci'tYceoanrs.ulted as to the previ-
sions of the Bill until it
House of Commons; but it wiiti'een introduced into the
seen by the evidence
that Mr. Pressly and all the el?
enixtraissioners avid
surf are of opinion that such
:notions ought to be
put an end to, in order to less° evasion, fraud and
trouble. ,
Profits
10. That ender the Act for levying Dirties
frone real property or from industrial income,
is less than tra,o/.-
fit'a Vide C. 35, any persfon. who proves tha't sth
he
an:
gregats annual amount o his income
:,,, exemed from those
.duties ; that money in the
Bank er boarded, property in jewels, in pictures, icie
furniture, in procoisei valet, or_ in Unoccupied lancli,iii;
exempted from the paym ta t of
.to tax; such property
!ring generally cacti ur;preductive; and further, that
---e 12-7, is only 'levied in Great Britain, whereby a large
preportion of the praprty of the United Kingdom la
Ireland le exempted from assessawnt. It has been esti-
mated that tinewh,l", of the t3aos are psid by about
350,000 ;.;'e son
, - -Iv fiZtl that if the tax descent cei to an-
nualnicamee Of 501. it wou!ti be .lid by rrhaps four
VaieJ that number, partial Under the preseOl
assess-
ment, thereiere, one pe7,0,1 contributes his own share
of the national
expenditure, and also the she.re justly

• The gross amount of
Lon Annuities in 1852 was
1,293,022/., of which 82,2241
was in Ireland, 1,210,798/. in
g
tx,,,land. In 1842 the gross amount of Long Annuities was
I,z 94,13 G/., of which 1.'203,947/. was in En,land, and only
4819/. in Ireland. There has been a codsiderable transfer of
the stock. The Long AVnuities paid in Ireland are free of,
the income-tax.