The Sun.
London, England, 1853-06-22 00:00:00

I which we have already followed, that this amount of re-
mitted taxation, large as it is, will recover itself in the
course of this period, just as the remissions of taxation in
1844 and 1845 have had that effect ; and taking the same
average as we have already experienced during the period
since 1842, we have arrived at the same result. Therefore,
at the end of the period to which I have referred, there
will be an income tax remaining—the present income tax
being 5,550,0001., and the additions now proposed being
590,000/.—making a total of 6,140,0001. There will also
bo now permanent sources of revenue to meet that, namely,
a legacy duty of 2,000,0001., spirit duties, 436,0001.
licenses, 113,0001., making a total of 2,519,0001. There
will be an anticipated reduction of charge on the Three-
and-a-Quarter per Cents., the result of the operation of
Mr. Goulbourn's measure, amounting to 624,0001. The
average annual diminution of charge, according to that
which has taken place during the last three years,
will amount in seven years to 640,0001. In the
year 1860 will fall in the Long Annuities, being
1,292,0001., with others amounting to 854,0001., making
2,146,0001. So that the whole of the reductions of
chard and the permanent sources of income which I have
mentioned will amount together to 5,959,0001., making an
amount within 180,0001. of the 'then existing income tax :
so that, if the Legislature should think proper, the income
tax may be dispensed with without any charge or sacrifice.
Now, my lords, I must say that this appears to me to be a
solid system of finance. (Hear, hear, hear.) It has already
been received with great acceptation by the country, and
has met with very general approval. I believe that,
coupled as this proposal is, with a fixed faith in and ad-
herence to that system of free trade so wisely adopted, if
you pcnevere in this system of finance, and also if we
should be fortunate enough to perserve the inestimable
blessings of peace which we have experienced for the last
forty years—l believe that in that case this country will
see times of happiness and prosperity which hitherto it has
not yet known. My lords, I beg to .move the second read-
ing of this bill.

The Earl of DERBY : My lords, I do not rise for the
purpose of offering any opposition to the second reading of
this bill, because I am quite aware that the state of our
finances is not such as would enable us to dispense with
that large sum of money which is annually brought into
the Treasury by the income tax. But I must say that the
speech of the noble earl, from first to last, appears to me
to be a contradiction both of the premises from which he
proceeded and of the conclusions at which ho arrived, and
I cannot but believe that some of his calculations are of a
character so vague and delusory as to render it absolutely
impossible to reckon upon them with any degree of cer-
tainty as to what may happen or what may be done in the
next six or seven years. (Hear, hear.) The noble earl
began by stating all the objections which there were to an
income tax at all. He spoke of its inquisitorial character,
and—quoting an argument which was used, I believe by
the Chancellor of the Exchequer—he stated that this was
a tax peculiarly suited to the time of war, which ought to
be a weapon not always kept in the hand, but hung up
against the wall ; and then, having established the unfit-
ness of this tax for the ordinary revenue of the country,
the noble earl, without assigning any season, comes to
the conclusion that the tax should be renewed, not in
time of war, but for the general serviee of the country
in time of peace, and for a period, which, accord-
ing to the views of the noble earl and his collea-
gues, is more than double the period for which it
was Government. (Hear.)
The renewal of bythe atanxy ene
was asked for by Sir R. Peel, for

the purpose of assisting the taxation, and he, expressed a
hope that at the end of three or five years he might be
enabled to dispense with it; but as each successive period
has come to a close, every Government has found itself, in
consequence of the reduction of taxation, in a position in
which it was absolutely necessary to ask for a continuance
of the tax, notwithstanding all the objections to whom it
was open. But the difference between former Govern-
ments and this Government is this, that whereas they
have asked for it for a limited period, in consequence of
the actual state of the revenue, the noble earl and his col-
leagues ask for a continuance of this tax for the purpose
of carrying into effect, and still further extending those
principles of taxation upon which the noble earl has pro-
nounced a eulogium. But after the noble earl has come to
the conclusion that, notwithstanding the character of the
tax altogether, it is still necessary to impose it, and to
continue it for a longer period than on any former occa-
sion, he next proceeds to discuss the character and parti-
cular incidents and details of the tax, and he tells your
lordships that, in addition to the inquisitorial nature of
the tax, it is impossible to deny but that between various
classes of the community it operates with gross and grie-
vous injustice, the consequence of which I should have
thought would be that the noble earl, in proposing its re-
newal for so long a period, would have sought to have
diminished and redressed that injustice. (Hear, hear.)
The noble earl has referred to the intention of the late.
Government to draw a distinction which he confesses to bo
equitable, namely, where property is realised, on which-
no deductions have accrued, and the income derived from
which is permanent, and without any drawback—to make
a distinction between that species of property and pre-
carious incomes. He says that he does not know in what
manner the late Government intended to carry that, into
effect; but now the noble earl must forgive me if I re-....
mind him that he should not come to any hasty conclu-
sion on this point, inasmuch as the late Government, hav-
ing had no opportunity of bringing their proposal forward,
did no more than indicate the outlines of it. An important
part of our budget was rejected by the House of Commons, •
and consequently the Chancellor of the Exchequer ,never ,
had an opportunity of developing the mode in which he pro-
posed to carry into effect the principle of which he acknow-
ledgedj
the justice, and on which he was prepared to act ;
of which, too, the noble earl acknowledges the justice, but
on which he is not prepared to act. The noble earl has
taken credit for the great ability and skill which characte-
rised the speech of the Chancellor of the Exchequer in sup-
port of his proposition for maintaining the present income
tax, with all its acknowledged injustice, and lie attributes
the success which has attended the passing of the bill
1 through the other House of Parliament to tho powerful
reasons stated by the right hon. gentleman in support of '
his views. He has forgotten, however, to recite amongst
the persuasive inducements which might have obtained the '
acquiescence of the House of Commons, that while the
Chancellor of the Exchequer undoubtedly deprived a cer-
tain class of the advantages which they might have ex-
pected from the equalisation of the pressure of the income
tax by establishing a distinction between fixed and pre-
carious incomes, he at the same time gave a boon to all
that class by fixing an oppressive tax, in the shape of a
succession tax, on real property, from which that class of
property is at present exempt. I have every respect for
the great ability and the great power in debate and argu-
ment of the Chancellor of the Exchequer, but I must ven-
ture to retain my own opinion, that the success of the in-
come tax in its present and amended form was not attri -
butable to any powerful arguments, but to the counter ad-
vantage of having a very heavy tax thrown upon real pro-
perty. Having established that the income tax is an in-
quisitorial tax—having, in the neat place, proved, and
having assumed that its manner of assessment was grossly
unjust and partial, the noble earl proceeds to take great
credit for not having made this tax a portion of the per-
manent revenue of the country. As I have stated ,before,
so far from having given any indication of an intention to
relieve the country from this tax, the present Government
have asked for the continuance of the tax for a period
more than double what was asked for by any previous
administration, but they hold out a prospect, though
clouded by various hints and insinuations, and have
taken credit to themselves for providing for the re-
duction of the tax at the end of seven years. (Hear, hear.)
Now, the noble lord wishes the house to believe, and I
wish I could believe, that there was on the part of Govern-
ment, and still more on the part of Parliament, any
wish, or indeed that it was in their power, to give up
this income tax at the expiration of the period of seven
years. I should have given credit to the Chancellor of the
Exchequer for really intending to act upon the principle
which he professes, of doing away with this tax, if lie had
begun by making some earlier and some more rapid dimi-
nution of this tax. But the fact is that the Government
retain the tax in its full amount for a period of two years ;
then they propose to diminish it by one penny in the pound
for a period of two years more ; at the expiration of that
time it is to be reduced by 2d. out of 7d.; and then it is,
to remain unaltered until the expiration of seven years.
Then, all at once, the noble earl believes that at the end of
this seven years it will be possible, and Parliament will
consent to get rid of the tax of sd. in the pound, a sur-
plus of 4,000,0001. or 5,000,0001. being required to effect
that object. (Hear.) If the Government had proposed
that the tax should be taken for seven years, and an an-
nual reduction of one penny in the pound should take
place during that period, I should have thought that the
proposal carried with it evidence of sincerity, inasmuch
as the reduction would be very gradual, and it would bo
within the limits of an ordinary surplus to meet the defi-
ciency, whereas sd. in the pound is manifestly beyond the
extent of the power of any probable surplus at that time.
(Hear.) But the noble earl takes credit for saying that at
the expiration of the period of seven years there will be a
sufficient surplus in the Exchequer to enable you to get
rid of the income tax, and he enumerates items for which
I am quite prepared to give him credit—namely, the re-
duction of the Three per Cents, consequent on the mea-
sure of Mr. Goulburn, and the falling in of the Long An-
nuities in 1860. But then, in order to make out a surplus,
he first of all shows that there will be a reduction of in-
come to the amount of 5,800,0001., and he then shows that
there will be—by a reduction of duty, on which he calcu-
lates, and by tke diminution of other charges—in point of
fact, a saving, at all events, equal to the 5,800,000/. which
he is about to lose by the remission of the tax. But then,
in order to establish his surplus, he is obliged to go
further, and he is obliged to assume that, for the purpose
of getting rid of the income tax, the reduction of
5,800,0001. will not only be covered by additional in-
come falling in, but also that the effect of the reduction
generally will have been so great that the whole amount
of 5,000,0001. will in the course of seven years
been have
there
will gbono d a
nt o
increasetl Je re revenue. nnuf e .
consumption, I ha v no doubtar that >
conse-
quently to the revenue, arising from the reduction of tax-
ation in many things ; but observe that the whole question;
which the noble earl assumes, the whole basis of hise calcula-
tions
b
tax, is that that amount shall have been so great that it
°-
tions upon which you are going to get rid of th
shall have restored the whole amount of the loss accruing
brought back 0 orunidiunnctoi
nmne s
.to
(iHt s
eoarrii
by the ebornednudcat,ionnn,twani
gine
chance, of whichit is absolutely impossible to 'form
My lords, that is a matter of the merest speculation, the
merest
dthsbt
the slightest opinion, and which may be effected by one
hundred different circumstances, of which it is impossible
that the noble earl should have the smallest data, and yet
it is upon the accuracy of those calculations that ho depends
for the ability of reducing the income tax in seven years.
(Hear.) Now let me call the attention of your lordships to
a few points, in which it is quite manifest that the noble
earl's arguments defeats itself. He states that he shall hails
from the income tax in calculated revenue a present amount
of 5,500,0001., together with an addition of '250,0001., which
is to arise from the extension of the tax to incomes below
1501. a year, and the sum to be derived from thefextension
of the tax to Ireland. Then he is to have 5,500,0001., and
about 590,0001. from the extension of the tax to classes not
now subject to it. But he has forgotten that before the
expiration of the seven years he means to reduce the income
tax from 7d. to 5d., and does he expect that the tax will
produce the same amount at sd. as it does at 7d. ? (Hear.)
Now this will affect the whole of the calculations upon
which rests the present prospect of getting rid of the in-
come tax. I am merely following the noble earl's figures, and
surely he must see that there is a mistake affecting 2-7ths of
his whole calculation. Believing, as I do, that the tax will
be permanent, I do not dispute the theoretical justice of
charging the landed property of Ireland,but I think it would
have been better to postpone a proposal of this kind to a
period when the land of Ireland would be better able to
bear it, and if the tax is to be only temporary, I cannot say
that I think it was worth while making such a proposition