The Sun.
London, England, 1851-08-11 00:00:00

AUGUST 11, 1851.

march of the Commons, was in the main successful;
but would have been improved if the head of the
column had been halted till the rear could close up.
I am, Sir, yours very sincerely.
AN OLD REFORMER,
London, Aug. 11, 1851.

THE INCOME-TAX COMMITTEE.
(From the Daily News.)
The following is believed to be a correct summary
of the evidence given by Mr. C. Pressly, Commis-
sioner of Inland Revenue, before this Committee, on
the 19th of June, the first day that it sat to examine
witnesses :
Charles Pressly, Esq., called in, and examined.
CIIAIRMAN—What office do you hold in the public
service in the Inland Revenue, and how long have you
boon in that office?—At present I hold the office of a
Commissiontr of Inland Revenue, to which I was ap-
pointed in January, 1849. Prior to that I was Secre-
tary to the Board of Stamps end Taxes, and previously
to that Secretary of Stamps; I came into the public ser-
vice is 1818.

And you have been on continued service since that?—
I have.

Did you hold an office when the present income-tax,
the sth and 6th of Victoria, iu 1842, came into law?—
I then held the office of Secretary to the Board of Taxes
and Stamps.
Were you employed in preparing and assisting the
Government in forwarding that Bill? —I assisted in
carrying out the measure.
Will you state to the Committee the history of the
income-tax, as succinctly as possible, from its corn•
mencemeat under Mr. Pitt, in 1798, down to the sth
and 6th of -Vict., the ono which is now in force?—l will
endeavour to do so. The Act which first imposed a tax
with reference to income was the 38th cf George 111.,
chapter 16, in 1798. Mr. Pitt was then the Chancellor
of the Exchequer. By that Act rates were fixed ac-
cording to the amount which a party paid for assessed
taxes, and tatal exemption was granted to those whose
incomes were less than 601. a year; reduced rates, how-
ever, were imposed on those whose incomes ranged be-
tween 60/. and 2001. a year. The rates were as follows:
601. and under 651., a sum not exceeding one hundred
and twentieth part of the same; 100/. but under 1051.,
a sum not exceeding one-fortieth; 140/. but under 1451.
a sum not exceeding one-twenty-fourth part of the same;
170/. but under 1751, a sum not exceeding one-sixteenth
part of the same; 195/. but under 2001., a sum not ex-
ceeding one-eleventh; and on 2001. and upwards a sum
not exceeding one-tenth.
By section 14 of that Act is it not stated that persons
having more than four children, maintained by them,
were entitled to an abatement from all these rates?—lt
is; an abatement was allowed by that Act.
There were additional duties where male servants,
carriages, and horses were kept; will you state what was
the charge when rated at 25/. a❑d under 30/. to the as-
sessed taxes ? They are as follows, by a graduated tax
of which the following are illustrations: where the
amount of the said duties were under 25/., a duty equal
to three times the amount thereof; where the amount of
the said duties were 25/, and under 30/., a duty equal to
three times the amount and one-half the amount thereof;
where the amount of the said duties were 30/, and under
40/., a duty equal to four times the amount thereof;
where the amount of the said duties were 40/, and under
501., a duty equal to four times the amount and one-half
the amount thereof; and where the amount of the said
duties were 50/. or upwards, a duty equal to five times
the amount thereof. There it stops.
That was the arrangement under that Act as regards
these additional duties?—lt was; in the Act of 1798.

Under section 2, will you state what was the law as
regarded assessment of houses, windows, dogs, clocks,
and watches?—" Where the amount of the said duties
were under 2/. a duty equal to one-fourth the amount
thereof;" "where the amount of the said duties were
71. 103. and under 101., a duty equal to the amount, and
one-halt the amount thereof;" " where the amount of
the said duties were 30/. and under 401., a duty equal to
four times the amount thereof;" and " where the amount
of the said duties were 501. or upwards, a duty equal to
five times the amount thereof."

Was there not, by section 3, on lodging-houses, or
shops a graduated duty in the same manner ?—Exactly
in the same manner. " Where the amount of the duties
were 31. and under 51., a duty equal to one-tenth of the
amount thereof;" " where the amount of the duties were
101. and under 12/. 10s., a duty equal to one-half the
amount thereof;" "where the amount of the duties were
201. and under 251., a duty equal to the amount and one-
fourth the amount thereof:" " where the amount of the
duties were 251. and under 301., a duty equal to the
amount and one-half the amount thereof;" and "where
the amount of the duties were 301. or upwards, a duty
equal to twice the amount thereof."
When was the first alteration in that Act?—ln 1799;
that Act was found inoperative from its being a tax upon
expenditure and not upon income; that was the reason
assigned at that time, and from its being paid by persons
who were not chargeable to the assessed taxes.

You understand that the first Act was intended to be
applied to expenditure?—Undoubtedly.
And this is an Act, finding that Act inoperative, to
apply the tax to income?—lt is.
The CHANCELLOR of the EXCHEQUER—What was the
produce of that tax?—We have been able to discover it
for the years 1798, and 1799, and 1800, hut by a note
which the comptroller has made at the foot of the ac-
count, he reports that in consequence of the destruction
of the books and papers relating to the property-tax, by
order of the Treasury, the years 1801 and 1802 are not
in the office. In the year 1798 the produce of the tax
was 1,855,996/. ; that is the amount of the gross assess-
ment. In the year 1799 Mr. Pitt passed the Act of
39th of Geo. 3d, c. 13; by that Act a duty was imposed
upon all incomes amounting to 601. a year and upwards,
upon the same graduated scale as in the Act of the 38th
of Geo. 3d; abatements were also allowed by that Act
to persons having families. But by that Act a very
material alteration was made in the principle. The
Guide Book of 1799 states—" The reasons given by the
Legislature for that substitution are, the sundry in-
stances of evasion experienced in the execution of the
former Act, and the inadequacy of its provisions in pro-
portioltrig the assessments upon each person to his
means of contributing to the public service. These
reasons evince the intention of the Legislature to es-
tablish an (quality of taxation, as far as it is practicable
by human means, and to keep in view in the provisions
of the present Act the leading object of the former;
namely, the ascertainment, by just and fair rules, of
each person's income, in order to a proportionate assess-
ment." That Act required all persons to make a return
of the whole of their incomes, from whatever source the
same arose.

CH.trumax—Whether arising from lands, personal
property, professions, trades, offices, or any other source?
—Yes, and an annual assessment was made upon them,
subject, of course, to appeal in the usual way. I have
the form of the return in which the income was re-
quired to be stated; on the one side it gives the descrip-
tion of property, from whatever sources of income it
arose, with its annual •alue, viz., land occupied as
owner; houses and lands in the occupation of tenants;
and then it goes on to professions, effices, pensions,
stipends, employments, and trades; annuities; interest
of money; foreign possessions; money arising from fo-
reign securities, and any other income not tolling under
these prticalgr heads. On the other side of the return
were all the outgoings, and among ethers, of course, in-
terest of money.

What are the outgoings which are included?—The
outgoings aro land tax; fines paid upon an average of
years; that must be upon the renewal of leases; fee-farm
rents, quit rents, ground rents, tenths, procurations, and
payments upon ecclesiastical appointments; repairs of
farm, farm-buildings, draining lands, embankments,
houses and buildings not occupied with farms; repairs
of chancels, in churches by rectors; expenses of collect-
ing tithes; annual interest payable for debts, both per-
sonal and charged on real estate; allowances to children;
assessed taxes under the 3iith George III.; annuities;
land tax on personal estate, and premiums of insurance
on life. _ _

Are we to understand that where a person paid as-
sessed taxes, under that Act, he was to set that off as
an abatement from the amount of his income?—No
doubt. It then gave the total amount of the deductions;
and, I presume, upon that return the assessment was
made. That was in 1799. _ _ _

Those being, in your opinion, tho regulations that
rendered the net income of the individual liable to taxa-
tion?—Yes. Tho produce of the tax in that year 1799
upon that alteration, was 6,046,6241.
When did that Act come into operation?-0n the sth
of April, 1799.
Did not that Act repeal the Aid and Contribution
Act, giving certain duties in lieu thereof?—lt did.
I understand that the 33 Geo. 3, c. 16, is the Aid and
Contribution Act to which allusion is made? —lt is.
CHANCELLOR of the EXCHEQUER—The Act of 39
Geo. 3, c. 13, repealed the Act of the preceding year?—
It did.

And substituted the provisions of the Act of 39
Goo. 3, for those of 38 Geo. 3?—lt did, making that
great alteration of requiring persons to return their in-
comes upon the form which I have read.
In fact, it substituted a duty upon income fora duty
calculated some way or other upon the expenditure of
the party?—lt did.
CHAIRMAN—And the produce having been 1,800,000/.
in 1798, was 6,000,000/. in 1799? Yes; that was, I un-
derstand, the gross assessment. •We have not the ac-
counts for 1801 or 1802.

Will you look to pages 181, 182, and 183, and state
what the general deductions aro which are contained in
that Act? I have read the deductions. I stated them
from the return paper; they aro the same as the clause
in the Bill.

CHANCELLOR Of the EXCHEQUER—Are there not, in
a SChECE:I3 to the Act, the rules for making the general
deductions from iucome?—Yes.

Are they all contained in that schedule?—They are.
CHAIRMAN—Have you any other observations on that
Act ?—None. _ _

Mr. T. BARING—Wore there any exemptions from
the operation of that Act?—The exemptions under that
Act were granted, as in the former Act, on incomes under
601. a year, and there was a graduated scale up to 2001.;
it granted the exemptions exactly as under the Act
of 1798.
Were foreigners exempted who received dividends on
the public funds?—They were, provided they did not
reside in this kingdom.
CHAIRMAN—They were exempted for a considerable
time?—Yes.
Mr. J. Wu-soli—Did that apply only to the foreigners
who held funds at the time the Act was passed, or had
it a prospective effect in exempting foreigners who might
afterwards hold :'
ands?--It exempted all foreigners
holding funds, then, or thereafter, provided they did not
reside in the kingdom.
In the first instance, when the dividends were paid,
as a matter of course the income-tax would be deducted,
and it must have been claimed as an exemption?—Not
under the old law. iu 1799 the parties returned divi-

detin4 as tovy Ulu aLy (Yht r prop E-sty ; they were not as-
sessed by the Bank of England as at present.
CHANCELLOR of the EXCHEQUER—Be good enough to
refer to the 2d section of the Act 39 Goo. 111., c. 13;
does that con rain the enactment by which all these duties
were raised?—lt does.

Are not the persons there rendered liable to pay the
tsx, all subjects of his Majesty, whether resident in
Groat Britsin or not, and all persons residing in Great
Britain, whether subjects of his Majesty or not?
—Certainly.
Is there not in the Bth section an exception in favour
of persons whose residence is only temporary ?—There is.
CHAIRMAN—Then the result of that Act was to free
all foreigners residing abroad and having property here?
—That would be the effect of it, certainly.
After that Act, was there not another passed in the
same year, chapter 22, the 21st March, 1799 ?—Yete
"for extending the time for returning statements under
an Act passed in the present session of Parliament, in-
tituled An Act to repeal the Duties imposed by an
Act made in the last Session of Parliament, granting
an Aid and Contribution.'"
Does that give you a scale of deductions, with a table
of various nenewfo
important
and declarations of income?—lt
does; there is no alteration by this Act of the
Act of 39 Geo. 111., c. 13.

Only in the forms?--Only in the forms.
There was another Act passed in the same year, the
39 Geo. 111, c. 42, 10th of May, 1799; I wish you to
look at that, and see whether the only alteration made
in it was to extend the time for returns and exemptions?
—That was the only alteration.
There is another on the 12th of July, 1799, 39 Geo.
111., c. 72; will you state whether there is anything im-
portant there?—That is " so far as relates to the assess-
ments made upon trustees, agents, receivers, and guar-
dians."
And that is the only alteration?—That is the only
alteration.
Will you refer to the next Act, namely, the 39 and
40 Geo. 111., c. 49, passed on the 20th of June, 1800;
you state what that provides?—lt is "an Act for
the better ascertaining and collecting the duties granted
by several Acts passed in the last session of Parliament,
relating to the duties on income, and to explain and
amend the said Acts."

Not varying the amounts?—Not at all varying the
amount!.

But extending the regulations?—Yes.
Are you award what is the next Act?—" An Act for
explaining and amending so much of an Act passed in
the present session of Parliament, relating to the duties
o❑ income, as respects the delivery of the statements to
the Commercial Commissioners of London, under the
amount of 201."

That is the 39 and 40 Geo. 111., c. 96?—Yes.
Principally applying to the city of London?—lt is.
Tho city of London almost only ?—Yes.
And the object is merely to confine it to commercial
statements ?—lt is.

The next Act is the 42 Geo. 111., c. 42?—Yes; that is
" An Act far repealing the dutieu on income, for the ef-
fectual collection of arrears of the said duties, and cc.
counting for the same, and for charging the annuities
speciEcally charged thereon upon the Consolidated Fund
of Great Britain."

Were there then any additional duties imposed?—
There were nct.

Was it only with regard to regulations?—Only regu-
lations.

That passed on the 4th of May, 1802?—It
Will you state what waa the next Act?—The next
Act was 43 Geo. 111., c. 122, passed the 11th of August,
1803.

Will you state the effect of that Act?—That Act
made a very material alteration in the principle of the
former Acts as regards the returns to bo made by per-
sons of their incomes for assessment. By that Act the
principle was first introduced of charging income upon
realised property at its first source.

The title of the Act is " For granting to his Majesty
until the 6th day of May next after the ratification of a
definitive treaty of peace, a contribution on the profits
arising from property, professions,,trades, and offices?"—
Yes. This was the first Act that charged property at its
first source, the date of it being 1803.
Are not the general powers and provisions of this
Act nearly similar to those of the present Act?—
They are.

Will you state what is the great change in the prin-
ciple of levying the duty made by this Act?—ln some
observations upon that Act, published in 1803. which
I have before me, and which I have no doubt were
issued by the Board of Taxes at that time, it is stated
That as the former duty was imposed on the ge•
ueral account of income derived from all the sources,
the present duty is imposed on each source by itself,
in the hand of the first possessor, at the same time
permitting and authorising its diffusion through every
natural channel in its course to the hand of the ultimate
proprietor. The present measure, then, must be consi-
dered as a tax on the first produce, gradually subsiding
itself into a tax upon the income of the ultimate proprie-
tor; affecting in its immediate object the hand that ac-
quires, but extending by direct motion to the hand which
converts the income so acquired. Instead of the land-
lord, and the numerous claimants upon him in succession,
it looks to the occupier of lands only. Instead of the
creditor, it looks to the fund from which the debt is an-
swered. In the place of a complicated account collected
from the vatious sources from which the income of an
individual may be derived, it applies to the source itself to
answer for its increase. By these means its object is at-
tained with more facility and certainty, and with less in-
tricacy and disclosure, diminishing the occasions of
evasion by the means of execution. Pursuing these
principles, the charge in respect of real property
is imposed on the occupier, both as to his own
profits, and as to the profits that may ultimately,
belong to each proprietor according to his in-
terest. Whatever claims may rest on that property,
as a lien on the profits, are left to be adjusted be-
tween the contracting parties, under an established rule,
founded on the same principles by which the tax itself is
imposed. The occupier, charged with the whole duty,
deducts from his landlord a portion of the tax propor-
tionate to his share of the profits. The superior pro-
prietor, the mortgagee, the annuitant, the creditor by
personal contract, and any other legitimate participant
of the profits, is subject to the like proportionate de-
duction, without other interference from the powers
created by the Act than for the purpose of settling in a
summary way any dispute that may arise between them.
Another original source of annual profit is that which is
derived from the funds composing the national debt. The
charge is imposed on the person entitled to the di-
vidend on shares of those public annuities, as being the
first possessor, not, as has been falsely conceived on
the funds themselves, that charge being in the same
manner distributable amongst the several persons who
may have a legal claim thereon, to be satisfied out of
the profits so charged. So property acquired by the
employment of capital in trade, with its increase by
the application of industry, and property acquired
by industry alone, are chargeable in the hands of the
first possessor,-witheut regard to the claims that may rest
upon it. In the same manner all salaries and emoluments
under appointments of a public or private nature, are
subject to be charged to their full extent, without deduc-
tion on account of the mode of their subsequent applica-
tion. In each of these instances provisions are made
authorising the apportionment of the original charge
amongst those who have a legal claim on the profits
charged; and as by these means the whole of the pro-
duce of property is originally brought into charge, and
as all claims must orginate in some or other of these
sources, the distinction between real and personal obli-
gations is not necessarily preserved. Whatever annual
payments arc to be made by virtue of any con-
tract, whether it forms a specific charge or not, as
they must be defrayed from some or other of these
sources, are, without distinction of their origin, liable to
the same proportionate deduction. Thus the charge is
gradually diffused from the first possessor to the ultimate
proprietor;
arising from the necessity of protecting private transac-
tions from exposure experienced under the Income Act
is avoided, at the same time protecting the private trans-
actions of life from the public eye, whilst the revenue is
more etkctually guarded."
That was published at the time, as you believe, as
giving the reasons assigned for the alteration in the Act?
—lt was. No change was made with respect to the di-
vidends arising from the public funds under this Act,
which were required to be returned for assessment as
under the former Act. Under the former Act you ob-
serve all incomes were returned, whether from land or
property of any description. This Act charged every-
thing atits first source except the public funds.
How were they charged?—They were returned by
the individuals possessing them, as they would have re-
turned profits of trade or rents of land.

Not as now, deducted from the Bank of Englandi—
Exactly; a graduated scale of 3d. to I ld. in the pound
was imposed by this Act on incomes varying between
601. and 1501., and five per cent. on 150/. and upwards;
the same exemption, however, was continued to persons
whose total incomes were less than 601. a year as under
the former Acts.

Will you state some of those amounts on the gra-
duated scalef—lncomes under 60/. wero exempt; from
601. and less than 701., 3d.; from 1001. to 1101., 7d.; 1401.
and less than 1501., lid.; and 150/. and upwards, ls., or
fire per cent.
That was as regarded proporty2—That was as re-
garded incomes generally.
Will you refer to section 31 of the Act. What did
farmers pay then2—The sum of 9d. in the pound on the
rent or annual value.
At what amounts; how assessed?-0n three-fourths
of the annual value.
That was in England; what was the rate assessed in
Scotland 2—lt was one-half of the annual value.
Can you state any reason assigned at that time why
.
Scotch farmers should only pay one-half whilst English
farmers were to pay three•fourths of their prod
duty contained in Schedule (B) was charged
occupier
cupation in respect of the profits which
own use after
was supposed to he able to apply to his °-hneonfst—he ohs
duty
of his rent; it was calculated on
routt presump-
tion that the tenant after payment of. his
could, in the
pence of cultivation, and other out.goiangs
u"m for his own
three-fourths of the
ordinary mode of cultivation, acquoutehron
purposes equivalent in England I.
rack-rent of the farm, and in Scotland an equivalent to
one-half the rack-rent: the duty was therefore impoted
on the rack-rent at three fourths of oho rate of ls., or
9d. in the former instances, and in the latter at one-half
the like rate, or 61, producing the same result as if the
duty of ls. had been imposed on three-fourths and one-
half of such rack-rent; and, the reason I apprehend
why a less rate of duty was cnarged in Scotland than in
England on the profits of a farm, was, that in Scotland
he
pays all the rates and taxes, which in
the landlord
England are borne by the tenant; the sum therefore on
which the latter ought to be assessed (if a portion of
the rent is declared to be the profits) should necessarily
be on a higher rate than in Scotland, where the assess-
ment is on rent and something more, namely, rates and

taxes; whether the proportions were fair, 1. col not
capable of judging.

under that Act, what We call Schedules (D) anti (E)
were charged five per cent., the same as the o ther?—
They were.
CHANCELLOR of the ExcLiEguEn—Dees not the Blot
sec'ion of that Act exempt foreigners uct resident in
the country from payment upon dividends in th a publio
funds?—lt does.

CHAIRMAN—DO you understand what 13 re ant in
in that section by " shares" there, the words beirtg
annuities, dividends, andshares?"—lt appears to
mean the shares referred to in the preceding section,
which are shares of any public annuity.
By section 195, is there not an allowance claimed for
more than two children?—There is.
CHANCELLOR of the EXCHEQUER—I 3 there not an
abatement cf duty in favour of persons having mere
than two children, up to the exten of 5,0001. a-yearl—
Yes.

5,000/. and upwards?—Yee.
Will you have the goodness to state what the amount
of exemption was?—lf the income of the party INSIS. 601,
a year, and under 4001., there was allowed for earth cniki
above two, four per cent.; 400/. and under 1,0001-, three
per cent.; 1,C0:)/. and under 5,0001., two per cent.; 5,0001.
and upwards, one per cent.
CHAIRMAN—Are there any other provisions made in
this Act which you wish to mention? Not in the Act;
but I would refer to the discussion on the Bill. When
Mr. Addington introduced the Bill in 1803, it was in-
tended that the exemption should not extend to ins mss
arising from realiz2d property. A debate took Ouzo on
the 14th of July, 1803, which is worthy of the attention
of the Committee. Upon that occasion Mr. Addington
gave way on the question of exemption, stating at the
same time the great difficulty that the executive officers
would have in carrying out the exemption upon inecanua
from prnperty, when it came to be charged as it was
under this Act at its first source, because it necessarily
involved in some cases a repayment of the tax. It. was
found so inconvenient and so difficult to carry it out,
that in 1806 it was entirely altered, and the exemption
confined to incomes arising from profits of trade, pro-
tcssions, and public offices, and from property connetited
with labour, with some few exceptions.
CHANCELLOR of the EXCHEQUER—Was not an. Act of
Parliament passed in the 44th of the King, chapter 37,
to repeal so much of the previous Act as required attor-
neys, agents, and factors to retain and pay the duties
chargeable upon public annuities?—It was.
Was not there a subsequent Act to obviate certain.in-
conveniences experienced in the Accountant-Getietars
office in the Court of Chancery?—There was.
Was not there also more than one Act in the same.
year, to regulate the appointment of commissioners, Site.?
—Yes; the 44 Geo. 111.. c. 82 and 83. There was 'also
another, viz., 45 Gee. 111., c. 15, which imposed an a ddi-
tional duty of 11 per cent.
Were not all these Acts consolidated and amended ia
the Act 45 Geo. 111., c. 49?—They were.
(To be continued.)