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

(From the Morning Chronicle.)

The trial of strength between parties is concluded,
and, now that the question of the income tax is decided,
the rest of the budget will probably be discussed with
reference to the intrinsic merits of the scheme. The re-
solution on the legacy duties, which stands in the orders
of the House of Commons for this evening, comes next
in order ; and although objections to the extension of
the burden will no doubt be suggested, it may be said
that the principle of the measure has been virtually
affirmed by'tho recent vote. The bill which must carry
out the details of the new arrangement will necessarily
contain provisions of a highly complicated nature,; but
the resolution itself is both short and simple, and it will,
in all probability, encounter little direct opposition. A
new tax is`iarely popular; but, in the present instance,
the Government enjoys the unusual good fortune of
meeting the general feeling, at the same time that it
provides for the maintenance of the revenue. Nor, in-
accurate as the public judgment frequently is on ques-
tions of financial expediency, can it be denied that there
is reasonable ground for the satisfaction with which Mr.
Gladstone's proposal has been received. Taxes on
capital are, indeed, thoroughly vicious in theory, whether
they are imposed annually in the form of a property tax
such as that which Mr. Hume recommends, or at the
uncertain intervals marked out by the casualty of death.
But the Chancellor of the Exchequer found the legacy
duty in existence ; and he could not afford to part with
it when he was relinquishing other sources of revenue
which involved still more serious inconveniences. It is
impossible to reconcile the tax with strict economical
principles ; but it is, fortunately, possible to make it
more just by rendering it more productive. There
are differences of opinion as to the expediency of
an impost on property ; but little argument is neces-
sary to prove that, if it is levied at all, it ought
to apply to all property alike. The popular belief
that the legacy duty gives a special exemption to
land, neither correctly nor adequately represents the
capricious effect of the existing law. Some of the largest
real properties in the kingdom are technically regarded
as personalty, and are therefore subject to the duty, un-
less they escape the burden by the mode in which they
have been settled, or receive, as regards any surplus
above a million sterling, the unreasonable favour of total
exemption. On the other hand, settled property, in
et...7c or moneyed income of any description, has hither
to been wholly unaffected by a tax levied only on per-
sonalty which passed by will or inheritance. The origi-
nal injustice of the arrangement has, no doubt, in
course of time, been mitigated by that natural process
of adjustment which constantly tends to correct all fiscal
anomalies ; but it has still been left, to a great extent, to
the choice of every owner of property, whether his suc-
cessors should pay the contribution to the public revenue
which the law has established as a general rule. The
proprietor of a landed estate brought himself within the
pur%:ew of the tax whenever he directed a sale for the
purpose of distribution among his descendants ; while,
on the other hand, settlements and gifts have been
daily executed with the express object of escaping the
burden.

All taxes are injurious, and most of them are un-
equal ; but there is no characteristic of an impost so ob-
jectionable as an arrangement which leaves the liability
of the taxpayer to his own discretion. It is for finan-
ciers to determine where the burden shall be placed,
and to take care that it shall lie where they have fixed
it. Whenever the legislator offers an alternative be-
tween the payment of the tax and some other course
of proceeding, he interferes with matters with which, in
his fiscal capacity, he has no concern ; and, at the
same time, he misses his immediate object of extracting
money from individuals for the public benefit. The rea-
son for intercepting a portion of a bequest from a legatee
is simple and perfectly intelligible—the State wants
the money, and takes it where it can find it ; but Chan-
cellors of the Exchequer have no motive for promoting
settlements, or for encouraging purchases of freeholds
rather than investments in freehold property or in the
funds. Even the rural financiers who set up turnpike-
gates have the good sense to fix side-bars at the by-lanes,
and to forbid, under penalties, ingenious contrivances
for taking circuitous routes through the fields. In the
present instance, the property corresponds to the travel-
ler's horse or gig, and the appointed turnpike-gate is one
which all must, sooner or later, pass through. The new
system only provides that, while the traveller walks
through the gate, -he shall not evade the toll by sending
his taxable vehicle round by the road which previous
legislation had left open.
If it is just that a legatee or next of kin should pay a
percentage on the personalty to which he succeeds by
will or under the Statute of Distributions, the heir at
law can set up no reasonable claim of exemption en
account of his land ; nor is the question substantially
different where a reversioner of a settled estate comes
into possession on the death of the previous holder. To
the State it is, for all fiscal purposes, wholly indifferent
whether a former proprietor thought fit to provide for
the future maintenance of a family, or whether the suc-
cession has been determined by the will of the last pos-
sessor. In either case, there is an ownership ending
with life, and if the frequenoy of deaths is assumed to be
uniform, the burden on both properties will, on the
average, be equal. The value of vested reversions will
no doubt be affected by the charge to which they will be
liable ; but no new tax can be imposed without an im-
mediate injury to the property from which it is to arise.
The remainder-man will not, however, practically speak-
ing, suffer any greater infliction than that which will fall
on the son or nephew who enjoys a reasonable certainty
of succeeding to a family property.
It is in cases less simple than that of ordinary inheri-
tance that the difficulty of legislation will be felt. As
the various rates of charge on different degrees of con-
sanguinity are, with a slight alteration, to be maintained,
it is evident that the Minister intends as far as possible
to carry out the principle of the legacy duty, by extend-
ing it to all descriptions of property. Hitherto, how-
ever, it has always been easy to ascertain the relation
between the legatee and the testator—not to mention
the still simpler case of intestacy. The circumstance
that particular estates were interposed between the ori-
ginal possessor and the eventual object of his bounty,
offered no perplexity to the revenue officer. The nephew
who succeeded to personalty on the death of the uncle's
widow, paid duty as on a bequest from his near relative,
and not as reversioner to a stranger in blood. It will be
more difficult, though by no means impossible, to deter-
mine, for the purposes of the new law, from whom the
succession is in each instance to be traced.
A correspondent of our own, whose letter we published
a few days ago, points out the hardship which would
result from adopting, as the ground of liability to the
impost, the mere transfer of property by the death of
the last possessor. In his own case, an annuity has
been granted by certain legatees, in pursuance of a fa-
mily arrangement, to a stranger in blood who had a
claim on their testator's estate. At the death of the
annuitant, the fund from which it arises will, of course,
revert to the granters ; but it would be evidently unjust
to charge them with a payment of 10 per cent., as if for
an inheritance. In this as well as in many other cases
which might be suggested, there is no insuperable diffi-
culty in discovering the principle on which the law ought
to be framed • but great E.kill. and dexterity will be re-
quired to meet all the various and complicated contin-
gencies which will occur in practice.
It will probably be necessary to proN ide, by penalties,
that communication shall be made to the proper depart-
ment whenever a liability to the tax is incurred ; and it

[PRICE' SD.

I may be found expedient to allow. special exemptions
where a reversion is received, not in the nature of an
inheritance, but as the effect of a bona fide contract,
determinable on death. It is, we presume, not intended
to impose a tax on the purchase and sale of life annui-
ties, for a duty 0f,.1.0 per cent. on the falling in of the
reversion would effectually put a stop to such transac-
' Cons. There can be no doubt that all these questions
are under the careful Consideration of the Government ;
and although the details of the new arrangement may
be troublesome, the difficultt is not insurmountable.
Parliament will be asked to decide that the principle of
the existing legacy duty shall be maintained and ex-
tended to all realty and personalty, subject to a deduc,
tion in favour of rateable property. An estate in fee or
for life, in lands and tenements, will.be valued as a life
estate, and any smaller interest• at its actual value.
The duty on rateable property will be levied in eight
annual instalments, to be paid in full when there is an
ownership in fee, but, in the ease of any smaller estate,
to cease if the possessor dies before the payments are
completed. The outline of the plan is obviously just ;
and it is reasonable to suppose that it will be equitably
filled up.