The Sun.
London, England, 1853-05-13 00:00:00

lature has recommended a proceeding of this kind in Ire-
land, and has made provision for facilitating its progress.
There may be a time--I hope it is not come, and that it may
yet be very distant—when you may have to introduce a
similar measure for England. What we have to consider,
then, is to frame a tax in a way that will not have the effect
of forcing the proprietor to part with his estate. Ido not
believe that you could find any tax to put upon the capital
value of an estate such as that I have been describing,
which, if it passed into its possessor's hands in a direct lino,
would not have the effect of compelling him to bring his
estate into the market. The proposition we propose to
make is this, that a person succeeding to such a property
shall be charged on his net life interest only according to
his age, and the number of years' purchase his life may
be worth. If the proprietor of his own free will chooses
to bring his estate into the market, and it realises
500,000 i., then, instead of charging hirecoonmtehe
al,looa/l.d:r 1,2001. a-year net rental,
as i
man, he is to be charged on the value of his
sucwceessiony.
Anything less than that will not be full justice `to
the claims of the exchequer and claims of other
classes. (Hear, hear.) In the event of the subsequent
voluntary alienation of the property the claim of the ex-
chequer will arise, but when the successor to the property
continues to hold it the charge will only be on the net life
interest. I hope hon. gentlemen will look upon this me-
thod of proceeding as a very powerful reason for adopt-
ing the principle of the Government proposal. (An
honourable member made an inquiry as to the duration
of the claim of the exchequer under this head.) The
claim of the excnequer will revive in the event of
alienation at any period during the holder's lifetime.
At his death there must be a new succession, but, if
the alienation of the property takes place at any
period during his life, the claim of the Crown will revive
against the actual possessor for the difference between the
amount of legacy duty which he may have paid upon his
life interest and the amount of legacy duty due upon the
value, after allowing for the encumbrances. I believe there
are other more legal, more technical considerations con-
nected with the tenure of land that will be affected by the
course I am now proposing, and I believe I am correct in
stating that the plan of the legacy duty as proposed by Mr.
Pitt was of a similar description, and with the acknowledged
purpose of charging the duty upon the life interest. These
are the main points to which I think it necessary to call
the attention of the committee at the present moment.
But I think it is necessary I should say a few words with
regard to the probable proceeds of the tax, because I see in
various quarters anticipations of proceeds which I cannot
follow or comprehend. Some are sanguine, others very
ridiculous and extravagant, and unable to stand a mo-
ment's examination. With regard to Ireland, I have
heard it stated in this committee that the amount of
legacy duty which we shall derive from Ireland, will be
about 300,0001. I myself believe that its amount will be
'somewhere between 60,0001. and 80,0001. (A laugh.)
This, I am afraid, is calculated to take the colour, and
the life, and hope out of the pictures that have been drawn,
and to bring them down to very homely and mean pro-
portions— (hear, and a laugh)—but at the same time,
as the computations I have mentioned are the best which
I have been able to obtain with the aid of that experience
and ability I can bring to bear upon it, I will not enter at
length into the question of the computation of amount;
but I think I ought to call the attention of the house,
and especially of hon. gentlemen opposite, to one common
source of error. One hon. gentleman said, with regard to
this matter, I had stated that this legacy duty would raise
a revenue of two millions. Stich an idea never passed my
mind, and sach words never passed my lip ; yet it was
stated that I intended to levy ten millions on the land.
The right hon. gentleman opposite seems to deny having
this impression. I do not doubt he avoided such a mistake,
but not only in newspapers and out of doors, but in this
house, it has been distinctly stated. The source of the
fallacy I think is this :—The landed class in this country
hold the first place in regard to influence, station, and
power, and I hope they will long occupy it. (Hear, hear.)
I have said they occupy the first place, and, if they do not,
they hold at least a foremost place in the country. They
have an immense influence, station, and power in the
country, but the income of the landed class, as a class, is
not at all in proportion to the influence and power which
they possess. (Hear.) A great many such cases as I have
already adverted to of extremely reduced incomes exist,
but their position still leaves them great social power, and
undoubtedly great political power. It is for that reason that
there is a strong disposition to exaggerate the amount of
landed income in the country. Now, the amountof landed
property, when compared with the rest of the income of
the country, and all the mass of income that will be sub-
ject to legacy duty, is comparatively trifling. lam almost
afraid to say how far I anticipate that the proceeds of this
tax will be from mere land. On a former occasion I ven-
tured to state that it appeared to me the land paid 9d.
in the pound or thereabouts of income tax, while other
classes paid 7d. (Hear, hear.) It was deemed that I had
proved too much, and we had to pay for it in a long debate
ending with a division. Perhaps a similar result will at-
tend the calculations I take the liberty to make on this
occasion. I must say, however, lam afraid that of the
2,000,0001. but a very small proportion can be expected
to proceed from the land, and that for two reasons—not
only because we say the land should bear the lower rate,
but because the land will always show a small produce
that is subject to the tax. The hon. gentleman the mem-
ber for Belfast the other night, when I was absent from
indisposition, made an able speech, in which he discussed
this question, and by the light of his experience as a
professional man gave an opinion to the effect that the
amount of revenue to proceed from settled personalty under
a tax of this kind would be very large indeed. That is, no
doubt, what we reckon upon. We reckon upon a large
revenue from land, and when I speak of land it must be
remembered that there are two important kinds of property
connected with land, but which are not land. There is, first,
the income that is derived from mortgages ; and, secondly,
incomes proceeding to persons out of settlements fixed on
the land, but which are not really property in land.
I do not think it is possible to draw any dis-
tinction in favour of personalty settled on the land, as
compared with any other personalty. Such incomes are
no more liable to local burdens than the money of mer-
chants or of bill-brokers, or any other purely undeniable
personalty, or than money in the funds. That description
of property, therefore, which is related to land, though not
land, must take its chance with other personalty, and bear
with it the full burden of the tax. So far as I can com-
pute, the proceeds of the tax from property of that descrip-
tion—the settled.,porsonaltyon land—will be about 200,000/.
As to the proceeds of landed property, proper, I will not
venture into details, but I must say that I do not think the
proceeds of that landed property, which I distinguish from
houses and other mossua„ncs, can be rationally estimated to
pass 400,0001. Now, 1 have not heard anything stated that
has been nearly so low as that ; but I will tell the house
the mode in which I have proceeded in making this esti-
mate. I have stated distinctly that I have separated and
struck off from this item the house property and all other
messuages, and I am now speaking of what are strictly
called territorial or agriculture estates. I stated the other
night that there are no secret sources of information on
this subject—there is nothing on this question that is not
open to every gentleman in this house. (Hear, hear.)
Under schedule A you find the gross amount of landed
property charged with income tax. It is about 19,000,000/.
a year, but there are deductions to come off that. The deduc-
tions, if I take them roughly at 16 per cent. will reduce it
to 41,000,0001. Then I have to make the addition of Ire-
land. The value of the whole rateable property of Ireland
is 11,200,0001. in round numbers. I have next to estimate
that portion which is not landed property, but which con-
sists of houses and other messuages, and that I put at from
7,000,000/. to 8,000,0001. This will give me a net income
from land in the three kingdoms of ' 48,000,0001. From
that 48,000,000/. I have to deduct the interest on mort-
gages and other encumbrances, which every successor to
land will be allowed to deduct before he is charged with
the tax. What this may be we are all alike able to judge;
we are all upon an equality in that respect, and may guess'
at our pleasure; but I take the interest on mortgages, and
other encumbrances on the land at 25 per cent. That
leaves 36,000,0001. of annual income—that 36,000,0001. re-
presenting a capital value of 30 times as much. But then
comes the question, how often will the succession come ?
It seems to me not an irrational calculation to say, once
in 30 years. (Cries of " Oh, oh.") I may be wrong. At
any rate it is open to gentlemen to take another standard
of calculation. I can only say, I go as near the truth as
I can. (Mr. Disraeli—You make your estimate on the
income tax returns, but you don't deduct the sums under
1501. a year.) That is true. You will have to make an
addition for that, but the addition will be very moderate.
We know what these sums are, for the income tax returns
give them ; and now I am afraid I have taken the incomes
to which the right hon. gentleman refers. The 49,000,0001.,
unless I mistake, which I have taken, is the gross assess-
ment under schedule A, irrespective of returns. lam
afraid, therefore, there is no addition to be looked for under
this source. (Hear, hear.) But the question is, how often
does the succession come ? I take an average of 30 years.
If it is on an average of 30 years, and if landed property
may be assumed to be worth 30 years' purchase, you will
have 36,000,000/. of landed property on which to lay the
tai. (Hear, hear.) The next step is to ask, at what rate
will that land pay duties ? The legacy duty at present is
levied on an average rate of 2 4-sths per cont.; but it is quite
plain that it will fall on lauded property at a much lighter
rate ; and for this reason,—first, because no interest
higher than a life interest will be charged, which will re-
duce the rate of the tax one moiety ; secondly, because
landed property runs more in the direct line than per-
sonalty, for property descending to strangers is obviously
more out of the direct line than realty, and is charge-
able at a higher rate. If that is the case, and if the
present rate of duty only averages 2 4-sths per cent.,
it is quite plain that the rate of duty on the landed
property cannot average so much as one moiety of that
sum, or 1 2-sths per cent., producing a sum of 500,000/. ;
but when I make that charge, I feel convinced you
must make considerably further reductions still, and
that you cannot estimate the proceeds which will be rea-
lised from landed property at materially more than
400,0001. I have stated briefly the grounds ou which I have
arrived at that conclusion, and I have done so deliberately,
in order that the committee may be able to follow and
thoroughly understand them. The estimates—indeed,
I can hardly call them estimates—the dreams in which—
Ie
was going to say wiseacres, but as that term. may be
offensive I will not use it—but the dreams in whichl some
persons have indulged have tended to propagate
et
effect
dan-
gerous delusions on this subject, and have 1
of exhibitingwho mweasianbotehte
tloighrtaisoef
capacity,
that more will be raised from land than I have anticipated,t
fromstrothues
land by this tax. (Hear, hear.) If it can be deiuonstra
fabulous brtliOsuosn sumsfm()nto
nobody will lend a more willing
expecta-
tionstion than myself. Only let us seeeairrlitoatsuaciliv
and I shall sincerely
that the revenue will be larger, at
hdeemr real ganrati
bond fide grounds on which we are toH (Hear.
hear.)o
I will
rejoice at so satisfactory a result. ( .
have
egot intoo t.o s
tt the question tion
income-taxo f
re
tpersonalty.returns
Tahnedr ei
maya gai again, w
statee
that as with regard to realty, so with regard to personalty,
there is alarge portionwillnooft
qwuiellstniootn
,C(b)luilte
Ilinsten.V
the tax at all. go into the
taro to stateiu fibvemwirteahilutyaand
periodporsoonfalsty of a:in:it:cal:
the pro(year about
2,000,0001. One other point I should explain. as to the
payment of the tax on successions to real property,
second
We
ol
is the time at which the parties succeeding may be enxentp;tc
to pay. Generally speaking, whlbesutatheeoennsutuhuccegessor is not
payment
to
pet there-
fore
property.
be-
longalso ttohe residuaryhim
onh
the
legatee,tetr rent-day,
d lavyn,
rent-
day they may be expected to be paid to him.
fore propose that he should not be liable to pa
tax till 12 months after he has succeeded CO the
(Hoar, hear.) We then propose that he shall be liable to
pay the tax in eight equal half-yearly instalments, ln. the
case of direct succession that arrangementwould make the
taxthe easilyhear payable,lyindirect
successors.it wouldh t
hbee
caseveellofi 111
Othe
erasceenotf.
successions the duty of 10 per cent. case
even on the lifte-
rest, would take up in four years a considerable share oft he
concerned, it might be open
itnoccoomnseidentSotifoanrtaso
make
Sataftuertihs
olicer prolongation of the time,
but I doubt generally the o tat course. It would
tend to bring about an accumulationof encumbrances—it
would, therefore, be better toleave it to the discretion of the
executive Government to provide, byextension of time, for
cases of that necessity. Generally' speaking, therefore, the