The Sun.
London, England, 1853-06-07 00:00:00

INCOME TAX BILL.

On the motion for the third reading,
Col. HARCOURT called upon the Government to
make some exception in the bill in favour of pilots.
Mr. HUME said he should not move any amendment
to the bill, but it must not be supposed from this that
he abated one jot in his opposition to the present inequa-
lities of the income tax. (Hear, hear.) He thought
time would show that this country would not stand it,
and, with the expression of that opinion, he should al-
low the bill to pass under protest. (Hear.)
Mr. L. HEYWORTH argued that an income tax
was a very proper tax, but it ought to be relieved of the
inequalities which disfigured the present measure.
Mr. GROGAN, Captain KENNEDY, and Colonel DUNNE
took the last opportunity which would most likely be
afforded them of protesting against the extension of the
income tax to Ireland.

The CHANCELLOR of the EXCHEQUER reminded
the house that Ireland would be compensated for the
burden of this measure by having the annuity tax re-
pealed.
Mr. MAGUIRE said it had been stated by an ex-
Chancellor of the Exchequer that this measure would
impose upon Ireland an additional taxation of 413,0001.
a year.

After a few words from Sir A. BROOK, the house
divided, when there appeared—
For the third reading..
Against it

. 189
~ 55

Majority..
On the question that the bill do pass,
Sir F. KELLY moved a clause to reduce the tax upon
incomes between 1001. and 2001. a year from 7 to 3id. in
the pound, and upon incomes between 2001. and 3001. a
year to s!d. in the pound. The first class on whose behalf
he asked the house to agree to this clause was that of the
poorer clergymen and curates who had to support them-
selves in a respectable position of life on very slender
means. He also asked them to agree to it on behalf of the
smaller and poorer class of tradesmen and small farmers,
the latter of whom had had their incomes reduced one-half by
recent legislation. He had a precedent in the appeal that
he made. It was well known that in 1806, when the in-

134

come tax was raised from fii to 10 per cent., a distinction
was made in favour of various classes of persons identical
with those on whose behalf he was now addressing the
house ; and on whom the tax was then fixed at only 5 per
cent. If in the midst of the longest and most expensive
war this country was ever engaged in, this distinction was
made, on what ground should it be refused now ? The
Chancellor of the Exchequer had conceded the principle to
some extent, as he hadrovided that the tax on incomes
under 150& should be Sid. in the pound. He trusted that
Governmeait would take the matter into consideration. 1

The CHANCELLOR of the EXCHEQUER said he
was very sorry it was quite impossible for him to accede to

tho request of the right hon. gentleman, that Government
should taloa this clause into consideration, and for reasons
which were obvious. All persons felt that one great dan-

ger respecting the income tax was the exemptions that it
involved; that there was a serious danger in the principle
involved in these exemptions. The consideration on which

the exemptions had been chiefly justified was, that there
was a certain point in direct taxation in the progress down-
wards, at. which the sum they to levy became so small in
proportion to the cost and difficulty and vexation of col-
lecting it that it was not wise to impose the tax upon
them. Mr. Pitt, in imposing the income tax, fixed the
limit at RN., and he proposed a variety of graduations be-
tween 604. and 2001. He likewisie introduced exemptions
of the nreture of those proposed by the hon. and learned
gentle= in in his second clause—namely, in favour of mar-
ried pars one having a number of children ; and others in
favour, for instance, of the clergy. In practice it was
found un %vise to continue these exemptions. It was found
desirable, in the first place, to simplify the tax by getting
rid of the) gradations ; in the second place, to remove all
questions of a dangerous tendency by abolishing privileges
in favour of particular classes, and in favour of persons
having families large families as compared with those who
had sma%l families or none, and to fix a single exemption
point. Sir Robert Peel, when he fixed the exemption
point at 31501., was very much censured for fixing it at so
high a :point. The course, therefore, that experience
pointed cut was this—that when the income tax was first
imposed ;it was on a complex basis, with a variety of ex-
emptions for different classes, that as the tax had gone on
in its working they should get rid of those exemptions and
simplify it as much as possible, and that the distinctions
should be) as few and as broad as possible. The princi-
ple that the hon. and learned gentleman would intro-
duce w.as really a most dangerous one. He would not
say that his arguments wore radical, for they really went a
great deal further than Radicalism. (Hear, hear.) The
reason why the Government proposed to stop at 150/. was
because that was already the law, and a little experience in
such a matter was worth a grent deal more than much ab-
stract rcaasoning. Indeed, if he (Mr. Gladstone) had to
give an abstract reason for stopping at that sum, he should
perhaps have great difficulty in doing so. There was, how-
ever, this general principle in selecting 1501.—0 r rather
1001.—its was, speaking generally, just outside the wages of
the labouring classes, so that the law would practically
exempt the working man, or nearly so. There was this great
reason why working men should be exempted, namely,
that they received their wages weekly, and in large towns
mostly lived in lodgings, so that it would be exceedingly
difficult to collect the tax. (Hear, hear.) If, however,
they awepted the principle of the hon. and learned gentle-
man, theiy would be embarking upon a much wider field
than perhaps he was aware of. How, for instance, could
we fix 4001. as the mark above which everybody was rich,
and belo w which everybody was poor ? If they once opened
the door, they would find a vast number of parties whom
the hon. gentleman did not contemplate attempting to rush
through it. (Hear, hear.)
Mr. SPOONER said the right hon. gentleman had al-
ready adopted the principle of the clause in making a dif-
ference between incomes of 100/. and 150/. Did the right
hon. gee itleman mean to say that he would tax a clerk who
had a salary of 1001. a year, and excuse a workman who re-
ceived two guineas a week ? He (Mr. Spooner) certainly
could mot recollect that Sir Robert Peel had been blamed
for taking so high a figure as 150/. ; and he should support
the clan se, not only as being just, but as calculated to afford
great re lief to large and struggling classes, and to remove
some of the aversion with which the tax was regarded.
Sir G. GOODMAN was afraid the hon. and learned gen-
tleman did not go so much amongst his constituents as he
ought, or he would have known that the farmers were ex-
ceedingly well satisfied with their present position, and
that they would hardly thank him for his motion.
Mr. :E. BALL, on the contrary, affirmed that the far-
mers generally were never more dissatisfied than at present,
although he would admit that the large farmers who could
breed extensively received a remunerative return upon their
capital. (Cheers.) The small farmers, however, were not
partakers in the advantage, and would be grateful for the
relief that would be afforded them by the clause.
Mr. L ZING had great experience with respect to small
farmers; in Scotland, namely, men with rents of 10/. or 15!.,
and up to 50/. a year. The prosperity of that class might be
measured by the circulars of the Manchester cotteu manufac-
turers, for the welfare of the two classes fluctuated together.
He happened to have received that very morning a letter
from a. friend who had supposed that the recent commercial
legislation would have been ruinous to the small farmers,
but he now confessed that he had been agreeably disap-
pointed, for they had never been so well off before. (Hear,
hear.) If any class had suffered at all, it was not the laze%)
nor the small, blatuviditilobn theetwecloel
iirimgewei
ncual:nulelan.i
analogous
Haut agriculturists—the
competel
thtiule aratirs. t)o:f7 _,
~t,Tih ,heerne
smallieiniocii-f- \
ti on nr
ec manufacturersrcfawphiailnain'
ciple of the proposed clause was really of a very reveal-
tionary character. If it were admitted they could not story
in
short of constituting every Board of Inc Tax
Commis-
sioners a Court of Equity to assess each°lnaen s tax accord-
ing to his supposed ability to pay ;
confiscation must follow. These
tliat
grounded upon a mistaken • and if they did. that,
thosetlhfe.
thosewh o
amendments were
account of the supposed un-
popularity of the income taxwith
schedule D. He believed
offered the option of continuing
having
stored,
income tax, and of
ppearisdonits underNvere
an equivalent amount of indirect taxation re-
" even of having other direct taxes imposed in its

' stead, they would, in nine cases out of ten, prefer the m
alternative. Take the hardest case that could be cited—
that of the professional man struggling into practice, who
was obliged to make a certain appearance without actually
earning anything. At present, as those men had no income
but were consuming their own capital, they were excused;
but if they had to pay a heavy house tax, for instance,
they would be made to contribute as much as if they were
in the receipt of large earnings. (Hoar, hear.) He (Mr.
Laing) believed that the income tax was really a very
popular tax. (Hear, hear, and cries of "Oh !")
Mr. G. BANKS admitted Mr. Laing's estimate of the
prosperity of the different classes of agriculturists to be
true; but it was precisely because the middling farmers
were being destroyed that he wished to give them the
small relief that would be afforded by the clause.
The committee then divided :
For the clause
Against it
Majority
The clause was therefore lost.
Sir F. KELLY then moved another clause, namely, "to
deduct 5 per cent. from the amount of the tax paid upon
all incomes under 4001. a-year in respect of each child of
the party
nntypratnred
paying, born in wedlock, and under 21 years of
age
The clause was negatived without a division.
Sir A. CAMPBELL moved the following new clause :
"In charging the duty under schedule A of this act, in
respect of lands, tenements, hereditaments, and heritages,
in Scotland, an allowance or deduction shall be made for
the amount of all parochial and county rates, taxes, and
assessments which by law or custom are paid by the owner
thereof." This clause was similar to one that had been
Issince
he beenoetivl
atnhde mrgrantediagnhytr
ahtt:e
hon.
.p
age persons
gentleman
assessmentsin Ireland,iann could
w
previously moved and negatived, but as a similar relief had
In England the same taxes were paid by the occupier, and
landlord, who, in consequence, received a higher rent.
nroehwe could
dst niett
.
consequently did not come under the operation ofP the
ment for the repair of churches, manses
in-
come tax. These included half the poor rates, the assess-
and schoolmasters'
costhouses
e f ;
prosecutions,th the
constabulary, rates, for he
hrimaintenancedgeeand prisons,the
atnhde
&c.,
highway rates in some counties. Taking the average poor
rate at 18.4 d. in the pound, and the county rate at 4d and
adding a proportion for the others, it made a difference of
6 per cent. in favour of the English landlord, through
whose hands these rates did not pass. It had been argued
that as the rate of assessment under schedule B in Scotland,
was different from that in England, the allowance was sub-
stantially made. But on the greater number of farms in
Scotland, the tenants paid no income tax, by reason of the
smallness of their holdings; therefore the assessment under
schedule B could make no difference to the landlords of
that property. Then it was said that the system of repairs
in Scotland was different from that in England ; but the
Scotch members, to the number of 30, who had a meeting
about the time the budget was proposed, had expressed the
opinion that such difference did not exist, in answer to its
allegation by the Chancellor of the Exchequer. Probably
the right hon. gentleman had been misled by the usual
form of Scotch leases, which bound the landlord to put the
premises in proper and tenantable repair, and the tenant to
keep them so; and it was added, " ordinary wear and tear
excepted." But the usual practice was that, on the begin-
ning of a 15 or 18 years' lease, the landlord spent about a
year's rent in putting the walls and woodwork of the farm
in proper order, and the tenant was bound to keep them
t., though not liable for what were legally called repairs.
Great differences, no doubt, prevailed in different parts of
the country—houses requiring more repairs than farms,
and one kind of farms more than another. This was not
a case without precedent ; for in the Income Tax Act of
1842, allowances were made for parochial rates, taxes, and
assessments charged under the act for the commutation of
tithes ; also for rates paid by the landlord which were
legally payable by the tenant. Landlords in Scotland
were precluded from taking advantage of this allowance by
a subsequent clause. It might be asked why they had.
Not come before Parliament sooner; but it should be re-
membered that they were now imposing the income tax
for the first time for seven years. The claim he now urged
was to be granted to Ireland, though there was less ground,
from the smaller amount of assessment.

. 144
. - -113

The CHANCELLOR of the EXCHEQUER said the
hon. gentleman had founded himself partly on the general
argument, and partly on the ground of a special concession
which he supposed was to be made to Ireland, The gene-
ral ground had been discussed on a former evening ; he
had opposed a clause more limited than this, and it had
been rejected by a very large majority of the house on the
ground that it would be impossible to make the concession
without unsettling the whole structure of the income tax.
Upon that ground he was prepared again to oppose it. The
hon. gentleman had said nothing which tended in the
slightest degree to show that that argument was not ap-
plicable to the proposal he now made. It was not a mere
question whether the Scotch landlord paid 6 or 7 per cent.
of public burdens and charges more than was paid by the
English landlord. This income tax must stand as a sys-
tem of compensations. The hon. gentleman said they
ought not to re-enact it until all the inequalities were
removed. He should make the hon. gentleman an ill
wish were he to wish that the duty was imposed upon
him of removing all those inequalities. Probably, in a
few months, he would rise from his task " a sadder and a
wiser man.' (Hear, hear, and laughter.) The honour-
ahle gentleman had little conception of the difficulty
of the task when he talked of removing all the ine-
qualities. The question for the house to consider was,
whether the Scotch landlord was not as well off on the
whole? Did the amount of tax paid by the Scotch
landlord represent a greater proportion of his income than
the tax paid by the English landlord ? That was a very
doubtful question, and was by no means determined by
the insulated point raised by the hon. gentleman. But
when they began to make concessions to landlords, what
had they to say to house-owners? (Hear, hear.) The
Scotch landlord paid perhaps five per cent. for repairs; the
house-owner had to spend, in England, and not in Scot-
land, 15 to 20 per cent. for repairs. Did not the hon.
gentleman think that that question ought to be raised too?
If that question were raised, and a deduction of 15 to 20
per cent. made on house property under schedule A, the
only effect of succeeding in that motion would be to let in
a host of far more formidable claims under schedule D and
E. Those claims, now resisted and in abeyance, would be
revived ; and the landlord would lose more upon what
might be conceded to them than he now lost by paying
upon his gross, instead of upon his net income. This was,
in fact, a small corner of a very great question. (Hear,
hear.) It was whether they should have the income tax
or not, in a shape, he granted, full of inequalities, but
which in some degree compensated each other, but the
very attempt to remove which would unsettle the whole.
(Hear, hear.) The hon. gentleman had referred to a spe-
cial case, and said that by virtue of a concession which he
supposed was to be made to Irish landlords, the same
ought to be made to Scotch landlords. Ho assured the
house that no concession of any principle was going to be
made to Irish landlords. (Hear, hear.) From the first
introduction of the bill, the vernment had founded
themselves on a basis which did exempt, and was intended
to exempt, Irish landlords from the payment of poor rates.
As the bill was first introduced, the proposal was that the
tax should be assessed on the poor law valuation. But the
poor law valuation in Ireland was formed, by law, upon a
principle which absolutely excluded poor rate from the
calculation. (Hear, hear.) Therefore, from the first, they
had bound themselves that Irish landlords should not be
assessed upon a basis which included the poor rate. Per-
haps it might bo asked why they had done so ? He could
not answer that in the abstract ; he must answer it as part
of the whole case. They must look at the measure as a
measure of policy and prudence, and one about to be ap-
plied for the first time to Ireland—a country, be it re-
membered, which had not the same facilities for collection
as existed in England, and where the relations of landlord
and tenant, and of nominal to real rent, were quite different
to what they were in England and Scotland. (Hear, hear.)
What had they done since ? They had made a great
change in the law, but against the Irish landlord—(hear,
hear)—for, instead of going against the occupier for the
tax, they were now to go against the landlord. It might
be thought that in England and Scotland it signified very
little whether they went against the occupier, or against
the landlord at once. He was sure that signiefid a good
deal in Ireland. (Hear, hear.) A state of things existed
there with regard to rental and the relations of landlord
and tenant, which really would bring about this—that if
they attempted to push too far their argument for absolute
equality between England and Ireland, founded on ap-
parent resemblances, they would end in only aggravating
the injustice. But the fact was there had been no
change whatever in the principle on which they were
proceeding. The bill of the Government had been
founded from first to last on this—that the general
basis of the tax should be the poor law valuation ; and the
poor law valuation, in the majority of cases, was under
the rent. It was natural that it should be so, because the
rent included a portion of the poor rate. But, the valua-
tion being under the rent, it was provided that the valua-
tion should be the basis. The valuation had been always
held out, from first to last, as the general basis of the
assessment in Ireland, and that entirely excluded the poor
rate. The clause proposed by the hon. member for
Youghal. was simply intended to apply a principle already
recognised in general terms to particular and exceptional
cases, where the rent happened to be below the poor law
valuation. That was the course the Government proposed
to pursue with respect to Ireland. With regard to the
general case of Scotland, as compared with that of Eng-
land, they must leave it to stand as it stood on a former
night, and must abide by the decision of the house. (Hear,
hear.)
Mr. C. BRUCE said the Chancellor of the Exchequer
had risen from his labours on the income tax, if not a
wiser, infinitely a more unjust man. (Hear, and a laugh.)
How stood the case? In England and Ireland a landlord
had a chance of being assessed on what he received ; in
Scotland, he would be assessed for what ho never received.
forpai
paid
the
rmaintenancetil
the
rebtlih, i
no of
oftl a p
churchr op e i_ I,bya Ps.
(Hear, hear.) This injustice was so monstrous that he was
surprised the right hon. gentleman should seek to main-
tain it. The repairs of houses were quite a different thine' -
mthulhnuateditycohhpnweseaiews(riyhbee3ioano
oslreeNtevh.aehf:suooslharoel Tuasrducehtn.otoall(s,H, lbe,ea2srooi,
dh/e.us;ata..n)
othera IyEmahuseoftoNhvraecrshayasresiaetysasbehiele_
purposes ; and yet ho was charged in respect of those
Ch
sums. Was not this a monstrous injustice / cellor of the Exchequer appeared to have lost all feeling—
(laughter)—but he would appeal to the sense of
ng-suffering people with
justice of
x‘'Vtoilollilli
the house. The Scotch were a 1?
divide T The di'eali ' The an-
much and complained
regardlittle;
butto bt taxation
Mr. SMOLLETT said he 1 ruse, if no one else did.
motion, but for the ' siottal not have supported this
Ireland. The fact he b
principleeiicN having been conceded to
to be this ; the Irish were
disloyal and turbulent , the Scotch were quiet and peace-
able. (Laughter.) In return, for this, not only was the
inequality which had
their case existed all along in the income tax
in
Mr. DUNLOP said if the Chancellor of the Exchequer
had stood on broad general principles he would have sup-
ported him; and not sought for an exception in the case of
Scotland. But as he had allowed a reduction in Ireland
the claim of Scotland ought to be insisted on. In England
the same question did not arise, the rates referred to being
laid on the occupiers. Hence, for a farm of the same
value an English landlord would be assessed on a rental of
9001., and a Scotch landlord on a rental of 1.0001.
Mr. A. KINNAIRD said he felt compelled to support
the new clause.
Mr. I. BUTT said
' he should do the same, but he did
not think the Chancellor of the Exchequer had, in the
concession to Ireland,
departed in the least from the a the bill.
general principle ,
G LL thought that as a certain relief
was to
Capt. 8 \CIBLit would be
be given to Ireland, injustice to refuse it to
Scotland, anti he should support the new claim.
Mr. WILKINSON appealed to the Scotch members t•

/