The Sun.
London, England, 1852-12-09 00:00:00

TIIE

TAX.

. (Front the nines of yesterday.)
Among the various conclUsions of public opinion to
which the Chancellor of the Exchequer adroitly gave a
Ministerial expression, there was none more settled,
positive, or universal than the establishment of a dis-
tinction between realised property and precarioul in-
comes in assessing there profits respectively to the
service 'of the State. With only so much difference of
opinion as showed the absolute freedom of the inquiry,
the point had been ruled by the most elaborate and
formal argument, but this argument itself had been pre-
ceded by that instinctive judgment of the public mind,
which in the long run rarely errs. It was not a party
question it was a question of simple right and wrong,
which fell within the comprehension of all.. We are
not disposed on such a topic as this to submit the con-
elusions of our own senses to the arbitrary rule of what
is termed "authority," and we claim for the public wle t
Mr. Disraeli most constitutionally claimed for Ministers
—" the right of acting rather in accordance with what
they think just and proper themselves than in deference
to the opinion of others." If any person, however,
should be persuading himself that this proposal of a
Conservative Cabinet is less Conservative than it should
be, or that it savours in the smallest degree of " Man-
chester politics" or clandestine democracy, we can at
once reassure him by a reference to Sir Archibald Alison
himself. Even this most consistent and unyielding
Tory, who still considers that the ruin of his country
was inaugurated by the Reform Bill, will be found in-
sisting on that " most material point in any discussion
upon a property-tax—the injustice of taxing income
derived from precarious and perishable sources at the
same rate as that derived from land or fixed and im-
perishable investment."
Nevertheless, at the eleventh hour, Mr. Gladstone has
started ari objection to the proposed adjustment, which
he rararea4sly. declams_ must prove " wholly insAp,e-
.Mle, and to .iv-tich Fe eagerly endeavours a teniffin-
nicate all that profound insolubility which an intellect
well trained in such subtleties can create. His argument
is this :—A property-tax appropriates to uses of the State
certain portions of the dividends of fundholders, whereas
it was decreed when the said funds were established that
the dividends receivable thereon "should be free from all
taxes, charges, and impositions whatever." Up to the
present time this alleged compact has been substantially
observed ; for, although the fundholder has been duly
taxed, he has been taxed only as a citizen of the State,
exactly like all other citizens, and with no reference
whatever to the quality of his income. Now, however,
on the proposed principle of " going directly to the
quality of the income," he will be taxed, not as a citizen,
but as a landholder, and such taxation will be in direct
breach of the public faith as plighted to the original cre-
ditor. Such is Mr. Gladstone's argument, and, so de-
lighted is the right hon, gentleman with its apparent
intricacies and bewilderments, that he forestals all rea-
soning on the other side by a prelimenary and general
contradiction ; describes the difference between him and-
his opponents as radical, fundamental, and insurmount-
able ; and finally, like an Irish patriot preparing to die
on the floor of' the house, asserts that so " formidable is
the nature of the difference, that it is impossible for him
not to offer to any proposition of the kind, from the first
to the last, the most strenuous opposition." It is almost
cruel to rob such a disputant ,of such a topic, but we
think we can make it plain to the simplest understand-
ing in the country that Mr. Gladstone's great argument
has no ground whatever.
In the first place, as regards what will be the real
question before the house, it may seem strange to affirm,
but it is nevertheless positive truth, that even if Mr.
Gladstone could establish his point, it would not affect
the general proposition. That proposition is, that
realised property and precarious income shall no longer
be considered identical for purposes of direct taxation.
Mr. Gladstone's allegation is, that the fundholder pos-
sesses a certain guarantee against certain charges. As-
suming that to be proved according to his own views,
what follows ? Not that substance and earnings are
one and the same thing, or that schedules B, D, and E
ought to be maintained • as they stand, but that a par-
ticular description of property, although of undoubted
reality and permanence, is taken out of the category of
real and permanent property by special exemption of
the law
Omitting, however, this deduction, it will be evident
to any person, after a few moments' consideration of
the argument described above, that its fallacy lies in the
sense attributed to the words " quality of the income."
The observations of Mr. Pitt, on which so much stress
was laid, were as follows :—" Whenever an idea has
been started of imposing upon the stockholder sepa-
rately and distinctly any sort of tax, I have re.prol?atecl
the attempt as utterly inconsistent with the good faith
of public engagement. But the matter is materially
reversed when a tax is to be levied on the income of
every description of persons in the realm ; when it is no
longer in the power of the stockholder to say, could
avoid this tax by removing my property from the funds
to landed security or to trade.' I should say to the
stockholder, as one of the public, 'lf you expect from
the state the protection which is common to us all, you
ought also to make the sacrifice which we are called
upon to make. It is not peculiar to you ; it does not
belong to the quality of your income ; but it is made
general, and required from all.' " Now, we are sure
few readers can be at a loss to see that Mr. Disraeli's
proposition is perfectly compatible with the principles
here laid down. The promised reduction of the percent-
age to the different values of property and labour will
leave Mr. Pitt's arguments just where they stood be-
fore. It will not tax "the stockholder separately and
distinctly ;" it will only tax his property exactly in the
same ratio as other properties of the like nature. The tax
will be levied, not on his income exclusively, but on every
description of income corresponding to his. It will still
be out of his power to say, "I could avoid this tax by
removing my property to landed security or trade," for
his landed investment would be taxed just the same, and
his trading investment would only be taxed less in exact
proportion to the lessening of its security. We say to
the stockholder precisely as Mr. Pitt did, " You ought
to make the sacrifices which all make. It is not pecu-
liar to the quality of your income, but belongs to all in-
comes of the same 'quality." It is the purport of this
word "quality" which Mr. Gladstone has so wholly
misconceived. An income derived from the funds has,
of course, a special quality of its own, in that it is the
interest of money lent to the State, and paid out otthe
revenue ; and if a tax were laid " separately and dis-
tinctly" upon these incomes in respect of this quality
only, while incomes just as fixed and imperishable were
exempted, that would be a breach of faith with the pub-
lic creditor. But an income derived from the funds has
also the further quality of permanent and realised pro-
perty ; and, when all permanent and realised property
has been declared chargeable with certain contributions,
there can surely be nothing in the contract of the na-
tion with the fundholder to give him an exemption from
the obligations of his fellows.
Let Mr. Gladstone reflect a moment on the conse-
quences of his own reasoning. If what he advances is
sound, the country has not only undertaken not to tax
the fundholder separately, but to preserve him from
taxation preferentially. It has decreed that property
invested in the public stocks, although secured by
credit of the entire nation, and placed on the safest and
most desirable of bases, shall not be considered as per-
manent property when permanent property of all sorts
is subjected to taxation ! The landed interest might'
then truly retort upon the fundholder, and say,. By
removing my property to the funds I could avoid my
tax ;" and would this, in Mr. Gladstone's eyes, be
the
injustice or contradiction ? We should like to see
le
figure touched by Consols if this doctrine is ma
itsin aired.
An investment which shall give property all rights,
and release it from all its duties, while providing at the
same time the greatest possible security, ought to com-
mand even a higher premium than Ig. The plain truth
that Mr. Gladstone's grand argument is nothing less
than a blunder, discreditable not only to his logic, but
even his common sense. The single illustration which
he himself quoted ought to have shown him his error.
If, in the collection of an impost avowedly assessed on
property in proportion to its reality and permanence,
the fundholder were so taxed that he could escape any
portion of his contribution by transmuting his property
into some other form equally real and permanent, but
less heavily assessed, that would be a proof that he was
taxed unjustly, and Mr. Gladstone's plea would hold
good. But if he is taxed neither more nor less than all
other possessors of corresponding property, lie is clearly
suffering no injustice at all. To argue for more than
this—to extend to him in his quality of proprietor a
pledge given to him simply in his quality of fundholder,
and to' bespeak for him an exemption from obligations
which his fellow-proprietors accept and discharge, is to
assert in his behalf preferential claims never dreamt of
in the original compact, and never conceived, we are
perfectly sure, by the class in whose assumed interests
they are now advanced.

( From the Times of this day.)
At this precise moment the most mud in this focus of
civilisation, is no other than the proper order to be ob-
served by the Chancellor of the Exchequer in proposing
his financial resolutions. As they stand in the Notices,
and as was announced last Monday, the resolution for
doubling and ,extending the Inhabited House Duty leads
the van, and comes on to-morrow. Then follow in suc-
cession Tea Duties, malt, malt drawbacks and allow-
ances, Malt Importation Duty, hops ; hops—duty on
importation, and Property and Income Tax. As to the
necessity, or peculiar merit of this arrangement, we
confess we understand it as little as we do the reasons
why a leg of mutton comes on at the beginning of dime' -
in one country, in the middle in another, and surrounded
by sweets and fruits in a third. As we don't feast on -,
Budget every day, and as whole years may pass without
the remission or imposition of a single tax, our •z an
of financial etiquette may, perhaps, be excused ; but we
even the doctors
arc further comforted to observe thasats
disagree. Mr. %I,dstone seems to
that the Income Tax must come uinsoconasoarnlaaxtei,oimn-
asmuch as it now only stands for
claims precedence ; but as the right
discovered what he thinks a fatal flawhim.
proposition, and what we think
be biased by a very natural desire
their worst trial first. Certainly, the current year, it
gentleman has
in the Ministerial
a mare's nest, he may
to force Ministers to
rtainly, if an acrobat has un-

dertaken twelve featg, one of Web is more decidedly
dangerous than all the rest, there is a species of eeo-
nomical calculation in urging huiii to give it the pr, :.-
deuce, inasmuch as if he breaks his neck in the attempt,
the waste of labour in the other less dangerous feats will
be saved. - Other: gentlemen think that the Inhabiter
House Duty is the most critical part of the Budget, so,
adopting Mr. Gladstone's rule of the worst first, they
wish Mr. Disraeli to take it on Friday, and in fact it so
stands for the present. If any precedent can be shown
far making tlas . the front of the Chancellor of
the Exchequer's offending, we bow to 'correction ; but
to_us_the arrangement appears altogether arbitrary, awl .
we cannot conceive why it should be necessary to discuss
a new tax when it is yet uncertain whether we want one
or not. We start not with a deficiency, but with a sur-
plus, which of itself is a case for remission. There is,
then, at once a good and sufficient reason for discussing
the question whether we can dispense with any tax, and, •
if so,; with what tax. Should the proposed remission
'exceed the amount of the surplus, then arises the ques-
tion, what further alterations are we to make to restore '
the balance of expenditure and income ?
By the light of common sense the best rule of pro-
cedure-is to give priority to that or those resolutions,
which, being the most important in themselve chiefly
determine the fate of the rest. If we could dispos.:e, of
all the resolutions •in one resolution, that would. save a
good deal of otherwise useless inquiry, sow, the car-
dinal point of the Budget—the pivot on which all the
other resolutions turn—is the proposed sacrifice of two
.millions and a half by the reduction of the Malt-tax. If
Parliament and the country desire that reduction, and
choose to leave the Chancellor of the Exchequer wzisgts
that sum, then it will be necessary to consider at once
how the gap is to be filled up ; and the means employed
to fill-it up may become bearable from the simple fact of
their having become necessary. At all events a vast
deal of trouble will be saved. The Malt-tax can be dis-
cussed very quietly and dispassionately. If it is proved
to the satisfaction of the public that they will not gain
a farthing a quart by the change, and to the satisfaction
of the farmer that he will not gain a shilling a quarter,
and that the brewers and publicans will take a lion's share
each of the 2,500,0001., nobody wit cry his'eyes out if the
duty is not reduced. That will at once settle some of the
other resolutions, for there will not be the least -occasion
for a new tax; or an increased tax, if there is no gap to
he supplied. We are far from admitting that a reduc-
tion of the Malt-tax would be eventually so little of a
boon to the public, but we should not be surprised to
find a majority of the Commons of thiS opinion. It appears
to us, then, that, were any of the proposed extensions
9f taxes to be discussed, they* would not be discussed
.... _
on therrown nieritciiiir iVitli: re ereitiithe chance of - -
the Malt-tax being reduced ;so that, even if one of
these other resolutions—for. example, the Inhabited
House Duty —were to be taken first, all would think
that, under a sort of disguise, the Malt-tax was really
the question at issue. If this be so, and if we cannot
help the Malt-tax being virtually discussed at once in
one form or another, had we not better take it first, and
discuss it in its own proper form, and on its own proper
merits ?

By taking the Malt-tax first we should very possibly
spare the House of Commons and the nation a good
deal of pain and discredit. There are probably not ten
men in the house who are not of opinion that the
Inhabited House Duty is a very fair form a property
tax, that more .ought to be raised by it than the
miserable 700,0001. we get under Sir Charles Wood's
scale, and that if a man is to have a vote for occupying
a house worth 101. a year, he ought not to be con-
sidered too poor to 'pay duty for it. We really cannot
conceive the state of that man's mind, who could se-
riously and conscientiously, deny these simple propo-
sitions. But to confess the truth, justice and morality
are as much out of place in taxation as the music of the
spheres, and there is hardly a borough member in the
house who would dare to endanger his seat by voting
for the enlargement and extension of the Inhabited
House Duty. The smaller 10/. householders are, as
a body, more powerful than the whole House of
Lords, not to say the Crown itself. They feel them-
selves the governing body of the country ; and
as the privileged class of France, before the first revolu-
tion, exempted themselves from taxes, so does this new
privileged class, created by the Reform Bill, consider
itself entitled to exempt itself from paying any direct
tax at all, and as few indirect taxes as possible. To such
a length has this system gone, that a man with 1201,
a-year may live very comfortably, and with a certain
degree of luxury, and not contribute more than 3/. or 4/.
a-year to the national burdens. The tax on his tea,
coffee, and sugar is pretty nearly all that he will par if
he does not drink fermented liquors. Our taxes press
heavily on the class below and on the classes above, on
working men and on gentlefolk of all sorts ; but taxation
right and left is staved off from the all-important and
all-potent 10!. householders. This is not a righteous or
convenient state of things. Justice demands that direct
taxation should begin with representation, and that
when a man is one of the constitutency he should not
object to pay for his privilege. If, then, we are to have
a sensible House Tax, worth the trouble and worthy of
the name, it ought to be extended to the 10/. house-
holders. But it is quite a farce to expect borough mem-
bers to cut their own throats by voting for it. Every
borough will rise in revolt like Marylebone against it,
and resolve to turn out the member who fails to comply.
So, of course, we may expect no end of hypocrisy on
he subject to-morrow night. All this might be spared
)3, taking the Malt Tax first, for if it be not reduced,
there will then be no immediate occasion for the In-
habited House Duty. We beg to suggest the considera-
tions to the independent members of the Commons, and
hope to see them acted on to-morrow evening by a mo-
tion to give precedence to the resolution for a reduction
of the Malt Tax.