The Sun.
London, England, 1856-04-09 00:00:00

irriE Lo '.D-- WEDNEgDIC*

ness had showed the remarkable tenacity of ii
but the experiments were not yet completed.

Tun

NE WGATE MARKET.
Mr. BRADY asked the Secretary of State for the
Horne Department if he had any intention of Olosing the
. .

existing markets ..f Newgate and L?adenhall, vihichwere
admitted to be insufficient and h.cornmodious; with the

view of eßtablishing a great central market in the neigh-
bourhood of S,Pithfield

Mr. MASSEY said an inquiry was at prOont going

onwith respect to the transfer-of Newgate 'tnarket to
another locality, and also to consider the subject of the
appropriation of the site of Smithfield. Those' inquiries
would soon terminate their labours, and their report
would be laid on the table of the house.

-INCOME TAX.
Mr. MUNTZ having presented a number of petitions
against the present mode of levying the inclme tax,
and also baying read a statement that had been ad-
dressed to him from a person in Ire4nd, pro-
ceeded to bring forward the subject of which
he had given notice ; it was as follows :—" That, in the
opinion of this house, an equitable adjustmnt of the
income and property tax is essential to the interests of
the country, particularly as regards the rates of pay-
ment upon industrial and professional incomes, com-
pared with those derived from fixed property." The
hon. gentleman proceeded to point out the inequa-
lity of the present mode in which the tax was levied,
and contended that an equitable readjustment

was absolutely necessary. He thought a pro-
perty tax properly levied one of the best taxes pos-
sible, because those parties who were in the receipt of
large sums arising from landed property were
c )spelled to contribute to the wants of the' country.
They allowed the rich to escape their fair proportion of
this tax, whilst the poor man bad often to pay on more
than he really earned. It was a question of expediency
with Government to get all they could, and not what they
were entitled to. No man ought to advocate the continu-
ance of such a system, and be felt satisfied that when its de-
fonts became thoroughly known no man would be found
to defend it. The hon. gentleman then proceeded to exem-
plify the working of this tax on income, landed property,
and funded property, which, he contended, allowed the
unequal and unjust nature of the tax. He called on the
house to remedy the injury he had pointed out'
Mr. P. URQUHART seconded the motion, but in
so doing he disagreed with many of the deductions
of the hon. member for Birmingham. Piiblic opi-

_ ...
pion was strong against this tax, and very
soon it must be attended to, and an attempt; made by

the Government to remedy the inequalities of it. -
The CHANCELLOR of the EXCHEQUER said
that although the hon. member for Birmingham had not
gone very fully into the subject, aor stated With any
distinctness the ground upon which he asked the house
to revere• the policy which had been followed by this coun-
try with regard to an income tax since it was first intro-
onced by Mr. Pitt, nevertheless the motion was of such
importance that it would, if the house were to assent to

it, although it was put. in the terms of an abstract mo-
tion, engage them to enter into the task of an entire re-
construction of the existing inoome tax. (Heur hear.)
Now, he would, with the permission of the libuse, just
state briefly the existing conditions of the tax. The
present income tax was at the rate of ls. 41 in the
pound, which was equal to 6/. 133, 4d, per cent; and ac-
cording to the existing law it was continued for one year
from the exchange of the ratifications of a definitive treaty
of peace, from the sth April next following, at the exist-
ing rate. On the sth April, 1858, it would, according to
the existing law, be reduced to sd. in the pound, and ac-
cording to the same law it would cease altOgether in
April, 1860. It was under these circumstances that the
hon. member invited the house to take a course which
would necessitate an entire alteration of the principles
and detailed provisions of the existing law ; and in call-
ing on the house to enter upon that very arduous under-
taking the hon, member had carefully abstained from in-
dicating anything more than a mere general principle
upon which that reconstruction would have to be carried
out. It reminded one of Dr. Johnson, in one of his lives
of the poets, having taken occasion to speak of a criti-
cism upon Dryden's translation of Virgil, mentioning
that the critic had been careful to place at the end of his
critique a translation by himself ; upon which Dr. John-
son remarked that, at all events, he who did so was en-
titled to the praise of being a fair critic. Now he (the Chan-
cellor of. the Exchequer) wished he could bestow the same
praise on the hon. gentleman in the present case. He
wished thate in criticising the existing income tax, and in
condemning its principle and details, the hon. gentleman
had told the house with something like distinctness what
was the nature of the tax which he would substitute for
it. It would be perfectly competent to the hon, gentle-
man, in committee of ways and means, when there
might be a question of raising the means for the expen-
diture of the next year, to move resolutions, and indi-
cate in detail the nature of the tax be would propose to
substitute for the existing income tax. All taxes, whether
direct or indirect taxes, were subject to serious objections.
There was rio person of any ingenuity and knowledge
who could not take any individual existing tax, and point
out the great disadvantages of which it was productive.
It was in the very nature of taxation that every tax should
produce some incidental evils. All that could be said
was that Government was, upon the whole, a beneficial
institution, and that Government could not be carried on
without taxation; and that the best o 7 the least bad
taxes that could be levied were those which the
Government ought to impose and collect. But
he was afraid that if a finance minister were
to wait until a tax could be foiled absolutely
perfect, and one that should attain ideal excellence, if
the Chancellor of the Exchequer were to pause until he
found a tax to which no sound or specious objections
could be made, he would have to present himself arinn-
ally with an empty budget. (Hear, hear.) The hon.
gentleman attacked an existing tax ; and, of course,
every tax which levied a large sum of money annually
(and the sum levied by the existing income tax in the
last year was no less than 16,482,0001.) must naturally
produce many complaints and grievances on the pat t
of the public, and alleged cases of injustice and incon-
venience done to individuals. The hon, member com-
pared it with a mere vague and general description of a
different principle, aed gave the house no oppurtunity
of comparing one scheme with another ; namely, the
plan of the existing tax with the tax which he would
substitute for it. Now, having listened to his speech,
and to that of the honourable gentleman who seconded
his resolution, but who seemed to differ with bins
on many material points, as almost all persons who
discussed this very difficult subject were apt to differ
when they descended to minute _part'culars, he pre-
sumed that both those hon. gentleman agree I in declar-
ing, by this resolution, that the rev of payment on
industrial and protesdonal incomes ought to be fixed on
a I wer scale as c.impered with those derived from fixed
property. This principle, the assertion of which was of
course familiar to every member of the house, was what,
he apprehended, those two hon. gentlemen desired to
enforce • and it resolved itself very much into this ques-
tion, whether this should be am, income tax or a property
lax ? That was a short and accurate etatement, he
believed, of the views of the hon. member for Birmingham.
The hon. member wished that the income tax should be
repealed, and that a property tax should be substituted
for it. Now, in the first place, he would point out the
fact, to which the house would give due weight, that
the income tax was introduced by Mr. Pitt during the
late war ; that it underwent considerable alterations
from 1197 to 1815, when it was repealed ; that it fur-
nished the sinews of war during that great contest,
and that nobody at that time was able to recom-
mend to the adoption of Parliament any plan which,
on the whole, fulfilled the conditions of an unobjection-
able tax better than the present system. Well, Sir R.
Peel, in 1842, profiting by the experience of Mr. Pitt's
income tax in the late war, introduced it in its present
form, departing in some particulars from the tax which
existed during the war, but still adhering in the main
to the principle as well as to the details of that tar. The
hon. member at the present moment called upon the
house to depart from all that experience, and to found
the law upon a totally new principle. Let them just
consider, then, the grounds upon which such a change
was recommended. He believed that those who dis-
cussed. this question on both sides took as an axiom the
well-known dictum of Adam Smith on the subject of taxa-
tion : "The subjects of every state ought to contribute
towards the support of the Government as nearly as
possible in proportion to their respective ability ; that
is, in proportion to .the revenue which they respec-
tively enjoy under the protection of the state."
Adam Smith did not say, "in proportion to the
property which they respectively possess under the
protection of the state," but he said, " in proportion to
the revenue which they respectively enjoy ;" and that
was a distinction to which the attention of the house
ought to be directed. In imposing a tax of this sort, he
(the Chancellor of the Exchequer) thought the state
ought t j look, not to property, but to income. The
ability of each person to pay ought, in his opinion, to be
measured simply for an annual part. The bargain which
the state seeme, l to make with the taxpayer was this—
"We will give you protection fur a year, and you pay
your taxes for a year." Beyond that period or some
limited period of that sort, the regards of the state could
not well be extended. It seemed to him that taxation
could not be considered as pro=pective ; that it vvas. not
just to tax expectants, which was the princip e upon
_which the whole of the property tax was founded. What
the state ought-to look to was the present value of
an income to enjoy and use, and not its value to
sell; That, it seemed to him, with great submission
to his hon. friend, was a question wholly irrelevant,
to the matter. Now, if en the other hand, the hon.
member's principle were adopted, of taxing, not income
but property, what would be the consequencss it. in-
volved ? He would read an extract from a report which
the late Mr. Hume proposed for the adoption of the
committee of 1852, by which this question of a property
or income tax had been very fully considered. The re-
port, which was not adopted by the committee, but
which fully embodied his views, ended with the efollow
mug important and striking passage :—" Your
commit-
tee submit finally that the taxation of this country is
not fixed on any intelligible principle, and that it be-
comes more and more, apparent every year, especially if
the property tax is to be a permanent tax" (by which
was meant the income and property tax), " that the
whole of the present system of taxation must be revised ;
that the best tax, the tax most easily levied, offering
the fewest obstacles in the collection, the least likely
to encourage evasion and fraud, will be likely to be
an equal tax on the realised and industrial pro-
perty of the United Kingdom." Now, everybody
who read that passage, which was the result of very
'deliberate thought, would perceive that if the
principle of that report were fully carried out, the whole
of our existing taxes would be swept away—income tax,
customs, excise, stamps, and everything—and that an
equal tax would be substituted on the realised and indus-
trial property of the country. That seemed to' be the
legitimate conclusioa to -which the doctrine would lead,

acid oo doubt the Loa. gentieDlan wa," quite ready to
adopt it. The doctrine appeared to rest on the opposi•
lion between fixed property and what was: generally
called industrial income ; or, as it was commonly called,
and very clearly called, the difference between pertnanent
and precarious incomes. Those who talked about per-
manent and precArious incomes assumed that it was pos-
sible to clas,ify all wealth, all property, and all incomes
into those two classes ; that it was possible to say,
"'there is a certain sort of incomes which` are called
fixed or perthanent incomes, and there is a certain sort
of incomes which are called precarious." Now it
seemed to him (the Chancellor of the Exchequer) that
such an assumption was entirely foun,:ted in
error, that no distinction really did exist in any
other sense than that there was a scale of incomes, rising
from the most permanent and ending in the most pre-

carious incomes ; but that between Chose two extremes
there was an infinite number of degrees, and that it was
impossible to fix any point at which it could be said that
permanent incomes ended and precarious incomes began.
It was understood in general terms what was meant by
them ; but, if we attempted to found a system of taxation

on that distinction, and to apply it in practice, and to say
that so doing would obviate all the practical injustice and

all the inequality which arose from the present system,
he believed that the theory would prove to have been
founded in perfect delusion. (Hear, hear.) He would
suggest in illustration of this, one or two most obvious
case.. Everybody knew hat was the meaning of
profits made by trade, by purchasing at the lowest price
for which articles oould be got, and selling at the best

price that could be obtained for them. Every one knew
also what was meant by a professional income, depend.
ent en the exertions of the individual, and dependent

therefore ❑pen his health and capacity of continuing his
profession—as in the case of a barrister or a medical
man, for example. But what would be said to an inter-
mediate case—a very common case—that of an income
derived from an estate for life ? Was that to be con-

sidered as precarious or permanent income. An estate
fur life was a freehold estate,accarding to the law of

England, but nevertheless it did not enable the person,
except cut of the yearly proceeds of it, to make any pro-
vision for his family. Take the case of the parson or

incumbent of a parish. He had an estate for life ; but
was it proposed that he should pay the full rate of pro-
perty tax, and that a banker or a merchant, making
large profits, of perhaps 20,0001. or 30,0001. a year,
should be allowed to be exempt from taxation because
he had what might be called a precarious income, while
the clergyman with a living of 1501. a year was to be
taxed because his living was an estate for life. (Rear.)
Everybody must see that if the income tax were to be
reconstructed on principles of justice, such cases as these
would have to be cons'dered. Then there were an
infinite number of interests or estates which could be
created ar.d charged upon an estate for life, by settle-
ments, and various dispositions were made for leaving
remainders to children and other persons, expectants on
on a life estate. In what manner-was it proposed to deal
WI the income of persons having a life interest under
such circumstances It would be found that in any at•

tempt to adapt the property tax to all these varieties of
property, the house would involve itself in an undertak-
ing from which the mind would recede in a state of
actual bewilderment. Then, there was the question of
a trade. According to the doctrine of precarious in-
comes, all incomes derived from trade were held to be
such ; that was to say, that the incomes derived from
banks, from distilleries or breweries, or from trading
companies, some of them long established and Istreng
the elements of stability most strongly impressed
on them, should be enjoyed by their possessors during
the whole time of their natural lives, giving, them
opportunities also of making prevision for their
children, and be held to be only incomes for
the purposes of taxation. (Hear, - hear.) But if by
ability to pay was meant the relation between a man's
income, either at the present time or hereafter, and the
probable demands upon that income, then numberless
circumstances must be taken into consideration besides
the nature of his property or income ; then his family cir-
cumstances must be taken into consideration, and his
means of obtaining assistance from others ; and there
were hardly any two cases is which, if we were to go in-
to an accurate investigation of a person's ability to pay,
-it would not be found necessary to make a difference,
and adapt the tax to the circumstances of the indivi-
dua'. Me believed that in the income tax of" 1805
there was an attempt to make an allowance for children
—there were abatements for persons having more than
two children ; where the annual income was under 4001.,
for each child above two there was a deduction from the
tax of 4 per cent. ; in the cases of incomes above 4001.
a-year, the deduction for each child above two children
was 2 per cent., and so on ; but that provision
did not very long continue to exist, and it was
altered in 1806 or in 1807, and it was not revived after-
wards when the income tax was reimposed, no doubt be-
cause of the difficulty of applying such a deduction. But
if we were to understand by ability to pay the means
which a man had of making his income provide for his
wants, unquestionably it would be necessary for us to
take into account something more than the amount of his
income, and to consider also the demands upon it. The
result would be that if they attempted to do justice to in-
dividuals, if the system was to be effectually carried into
operation, it would be necessary almost to make a special
case of every taxpayer. But then as to this principle
of sparing the precarious incomes, and imposing an ad-
ditional rate upon permanent incomes—how was it pos-
sible, the doctrine being so laid down, that they should
go on levying an indirect tar which, from the neces-
sity of the case, bore equally upon all ? (Hear, hear.)
A person who had 100,0001. a year, and a mechanic Rho
received 15s. a week as wages, paid precisely the same
duty upon sugar, and coffee, and tea, and tobacco,
and no attempt ever could be made to adapt the tax
to the circumstances or the ability of the individual.
Therefore if the hon. member was consistent in his view,
he must put down all customs, excise, and stamp duties,
in order to substitute fer them the 0-pervading pro-
perty tax. But it would not stop there. It would be
necessary that lie should remodel all the local taxes.
The local taxes, which produced something more than
ten millions a-year, were not levied on the principle of
a property tax, but they were mere strictly levied on
the principle of an income tax. They were charged
upon the occupier in proportion to his annual rent.
Now it would be impossible, if they were to hold that
the present system of levying the income tax was founded
on injustice, it would be impossible that that house could
leave standing, unaltered, so large a systen of taxation,
producing ten or eleven millions a-year. With regard
to schedule D, undoubtedly it was an important part of
the present tax. The produce of schedule D last year
I was 5.101,0001. ; of schedule A, 7,661,0001. ; of schedule
C, 1,802,000/. The number who contributed to sche-
ilele D, according to the last returns, was net greater
than i 282.480 persons. All the incomes in the other
schedules were charged not on the taxpayer, but before
the income reached the recipient's hands. With regv.rd
t, schedule D it was impossible that that practice should
be followed ' • it was necessary that the per eine included
in schedule D should assess themselves. Now he was
far from wishing to make the smallest imputation upon
the honoer and integrity of professional awl commercial
persons whose incomes were included in schedule D,
hut it was in human nature when a man assessed him-
self for the imposition of a tax that be should be some-
what more indulgent to himself than if he were assessed
by another person. It must also be borne in mind
that a great portion of property which might be con-
sidered as commercial property was included in
schedule A. In many respects there was great
analogy between that class of property and property
included in schedule D. Nevertheless the plan of
taxation which the hohourable gentleman proposed
would draw a great distinction between these two
classes. Since the discussion which took place four
years ago upon the subject of the income tax a new tax
had been imposed, which to a certain extent altered the
relations of schedules A and D. He alluded to the tax
on successions. (Hear) That was a tax of considerable
magnitude, which was paid at certain periods in large
sums, and which fell exclusively upon property included
in schedule A. He conceived that the very full and
able consideration which his right hon. friend the mem-
ber for the University of Oxford gave to this subject in
bringing forward his budget, when the matter was almost
exhausted by the treatment to which he subjected it,
woul t have rendered it unnecessary is have brought
this question forward again. He bad hoped that the
present position of the income tax would have furnished
an additional reason why the hon. gentleman should not
have brought forward so extensive a motion. He thought
this was not a favourable moment fur the entertainment
of this discussion, Under these circumstances, he trusted
that the house would, alter the purpose which he pre-
sumed the hon. gentleman had in view had been answered
—namely, after it had been subjected to discussion—he
trusted that the house would not be disposed to pledge
themselves to a proposition the consequences of which
were too important to be assented to in the form in
which they were proposed. He begged leave to move
the previous question.
Mr. LAING said he should certainly vote against the
motion. To affirm a simple and general principle, and
leave the Government to work out the details, was a
system that ought not to be applied to questions of
finance. He believed it WAS perfectly true that there
was no tax in the budget against which strong and valid
objectionS.could not be brought, and therefore he could'
conceive nothing more dangerous than that the House
of Commons should get into the habit of passing resole-
tior s containing abstract principles unless they saw some
practical mode of repealing the tax. On that ground he
should vote agaiest the motion. At the same time he
by no means assented to the conclusion that the present
income tax was by any means perfect in its incidence.
On the contrary, he was strongly impressed with the
conviction of the income tax being found to be a neces-
sary and permanent part of our taxation, and in the next
place to render it a permanent part of our taxation some
revision of the mode of levying the tax was necessary.
He did not think it requisite to modify the whole taxa-
tion of the country, as the Chancellor of the Exchequer
put it, in accordance with some axiom laid down by Adam
Smith. He believed also that the idea of substituting a
property tax for an income tax was equally visionary. He
quite agreed that they must levy a certain rate upon
that income, and they must not aitetopt to carry out that
which was impossible, that any mode of levying the tax
arisenwa a pf
re
or fine c
tt
hoen
incomee. A great
notpart e on fg t
lhoeo kde idffiu
uc p
01 tny had
asa
permanent part of our system. It was first brought for-
ward as a short tax, and had been continued as a tempo-
rary measure ever since ; but he thought we had now
arrived at a time when we should look upon the income
and property tax as permanent. He should say that the
tax should be something like 5 per cent. in time of
peace, and that they should regulate their finances in
that view ; and therefore it was important that in
schedule D.they should escape the inquisitorial charac-
ter of it on the one hand and fraud and evasion on the
other.

Mr. WILLIAMS called attention to the hardship on
artisans who had been assessed to the income tax, their

ieguiar wages not amounting to 100/. a-?ear, but being
invido up to that amount by a few days' overwork. It was
not the intention when they passed the act that it sh,aild
apply to :mob casee, and he trusted the Chancellor of the
Exchequer would give directions to the assessors not to
press such cases.
Mr. SPOONER, could not agree to the whole of the
motion. He could not agree that the hardship was wholly
upon persons having industrial and professional incomes.
Landowners had as much to complain of, for every one
who knew anything of land, knew that they must deduct
20 per cent, from the rent to arrive at the net income,
avid yet the landowners were assessed upon the rent. Then
also they practically paid the tax levied upon the tenant. If
the motion went to a division in its present shape he
should vote against it.

Sir IL WILLOUGHBY complained of the operation
of the law of long annuities. In point of fact, long an-
nuities in their present shape were taxed to the extent of
23 per cent. . . . .

Mr. MUNTZ, in reply, said he never had the slightest
intention to make any special reservations in favour of
any particular class. All that he wished was that the
house should affirm, in the words of his resolution,
" Tbat an equitable adjustment of the tax was essential
to the interests of the country."
The house then divided on the previous question, that
the motion be now put—

63
~.- 194-131

Ayes.
Noes
The question was therefore not put.
THE C EIINESE EXPEDITION.

Sir J. W. HOGG bad given notice that he would call
attention to the claims of the East India Company on
her Majesty's Government fur 806,5351., being the ba-
lance of the expenditure by the Government of India on
account of the expedition to China, and to the corre-
spondence on the subject laid before the house in May,
1854. He would, however, content himself, in the first
instance, with asking the Secretary of the Treasury whe-
ther he had gone through the accounts, and, If so, with
what result ? Probably that would render it unneces-
sary for him to proceed with the subject.
Mr. WILSON said there had been a difference of
opinion between the Government and the East India
Company with respect to the principle upon which the
account should•be made out ; but there would not be a
difference of more than 200,0001. between them.
Sir J. W. HOGG remarked that as the hon. gentle-
man had admitted a debt of 600,0001. to the East In
Company, he shoul I not think it necessary to trouble the
house.