The Sun.
London, England, 1861-02-20 00:00:00

THE ' SUN, LONDON, WEDNESDAY EVENING, FEBRUARY 20,_ IB6I.

Mbar. 4.......

prejudicial to the public weal. (Hear.) After all the criti-
cism Ewa have at ♦arious times heard in this house, I am
raysel.; every day more strongly of opinion that msastma
for th• .3 reconstruction of Parliament ought to be large and
comp :eb.ensive ones. If you cannot pas large-and compre-
hend me measures, the only conchudon. which I can draw is
that there is no necessity for them—(hear)—but, when you
are dealing with a subject so important as the reconstruction
of Parliament, you require all the responsibility of a Mini-
_

agcy, and all the information and all the regard to various
Nterests which can be secured by it, but which cannot be

'expect/ad from gentlemen who arrogate to themselves the
title of " independent members"—a title to which I trust we

"all, even when in office, have a fair claim. A gentleman
;takes up a fragment of a great subject; he becomes ena-
moured with the results of his own meditations ; he thinks
.that the conclusions at which he has arrived from the

force of his own thought are the only ones
which can save the State, and he is too eager
to force those conclusions upon the acceptance of
Parliament, without reference to the interests which their

adoption may injure, but which ought to be duly considered
in any scheme which attempts to do justice to the whole

country. I have the strongest objections to the measure
which is introduced to-night by the hon. gentleman. I
think that it would have a very injurious effect upon the
country. I think that it would in many counties give
pew er to those who are not fairly connected with the pre-
de,minant property and the predominant industry of the
country, and I also entertain the objections which have
been urged with. singular ability by my hon. friend the
member for North,Warwickshire, which are well deserving
the attention of the house, and which I am sure will com-
mand the attention of the public—(hear, hear)—but this
is not the occasion on which to debate the merits of the
measure, because even with the rigid programme for the
conduct of the Government business which has been an-
nounced by the noble leader of the house, we shall pro-
bably have another importunity of discussing them ; nor
should I have touched upon any portion of the scheme had
It not been for the misapprehension of the hon. gentleman
with reference to the conduct of the late Government upon
this subject. Totally irrespective of my objection to an
'isolated measure—totally irrespective of my conviction that
you ought not to deal with the subject unless you are pre-
pared to deal with it in a comprehensive manner—totally
independent of the objections which arise from my belief
thet it is impossible, in the present temper of the country,
to deal with the subject in a comprehensive manner, and
giving credit to the Government for being actuated in
the course they are taking—not by the mean motives
which have been imputed tothembytheir particular friends
—(laughter)—but by that sense of duty which I trust will
always influence gentlemen in their position—it is with re-
gret that, under the circumstances, I shall oppose the mea-
sure of the hon. gentleman. I deeply regret that there
appears to be a prospect of the waste of valuable time—of
that limited portion of the session which is accorded to pri-
vate members not connected with the Government for their
attempts at legislation. I cannot myself conceive at this
moment—l am unable to form any clear idea as to what
can be the object of Win. gentlemen opposite and their sup-
porters in attempting this reform of the House of Com-
mons by measures of retail. The great wholesale firm
announced that it is a transaction beyond their powers
of capital and enterprise. (Laughter.) What probability
of success can attend these hucksters—(great laughter)
who come forward to satisfy the wants of the nation
when the great association has announced that it is im-
possible for them to accomplish the feat? Their object
cannot be to obtain popularity in the country. I believe my-
self that, on the whole, there is no subject so unpopular in
England at present as Parliamentary reform. Is it to obtain
popularity in this house ? I will say nothing of my friends
here, who, I think, during the campaign of reform here last
year behaved with great temperance and forbearance—
(hear, hear, and oh)—and gave every opportunity to the
Government to carry their bill if they could. But I can say
something of the feelings of hon. gentlemen opposite, be-
cause month after month I watched their countenances, and
saw men representing capital cities and large constituencies
whose teeth were chattering in their heads—(laughter)—
whenever the order of the day was read. Theirpallid visages
could not be concealed from the commonest observers; and
in the lobbies you saw them shaking in their shoes—
( renewed laughter)—at the threatening invasion of a
£6 constituency. 'Why, sir, these are facts which
convinced me that the honourable gentleman and his
friends will obtain no popularity among their co-mates
and colleagues in this house by the course they propose to
pursue. Well, then, what can be their motive ? Is it the
honourable object of proving that, though they are taking '
an unpopular course as far as the country is concerned—
though they are taking an odious course-L--(laughter)—as far
as their intimate friends are concerned—that they are still
consistent, they have not changed their minds, and though
changes may have occurred in other quarters, they are the
same as when they presented themselves upon the hust-
ings? If that be the result which they desire, then I say
it is one which they can obtain without wasting the time
of Parliament, and without still further injuring that cause
of Parliamentary reform to which they are devoted. They
can have a public meeting; Willis's rooms may be once more
engaged—(laughter)—and, though no compact may be en-
tered into, still they may make a rublic demonstration
which will prove to the country that their opinions are per-
fectly unchanged, and that whenever an opportunity offers
itself they will carry them into effect. I really wish
they would consider the practicability and feasibility
of such a scheme, because it is only on Wednesdays
the noble lord intends that they shall have an opportunity
of bringing forward these measures. But on Wednesdays
we have a prospect of some very important and interesting
legislation—(hear, hear)—and I confess I look forward
with dread to a repetition of the scenes of last year—(hear,
hear)—especially on the subject of that bill, of the intro-
duction
of which notice is given this evening. In the
House of Commons, especially when you have sat here a
good many years, there is a genial feeling, at both sides, of
reciprocal respect and regard. Gentlemen on this aide are
therefore averse from a repetition of the sufferings of hon.
gentlemen opposite. Why this unnecessary torture ?
Why is the alarming prospect—sueh, for example, as that
which agiiated , the member for the capital of Scotland—
(laughter)—again to be held out, to the annoyance of hon.
members and to the waste of public time ? I wish, after
having performed an act of courtesy to these gentlemen,
both of whom are entitled to respect, in allowing
them to bring in their bills, some private arrangement
could be entered into by which we should hear nothing
more of the subject. (Laughter.) We ought to act in the
spirit of the age, and, as the spirit of the age is to offer
testimonials to gentlemen who perform public services, I
shall be most happy in such an event—and in this I am
sure to speak the feeling of my friends—to join with the
majority ;opposite in offering to those gentlemen some
mark of our respect and gratitude. The right hon. gentle-.
man resumed his seat amid considerable laughter and

cheering,
Mr. D. GRIFFITH withdrew his amendment, announc-
log his intention to renew it in committee.
Leave '.vas then given to introduce the bill.
PROBATE DUTY ON REAL PROPERTY.
Mr. 'W. WILLIAMS rose to move, "That in the opi-
nion of thishouse real property should be made to pay the •
same probate duty as that new payable on personal pro-
Party." The present state of the law as regarded the pro-
bate duty had been in existence since 1796, and the effect
cf it pia to impose a probate duty of 21 per cent. upon
£2O the personal property of a poor hard working in an,
while real property was comparatively exempt from the
tea, that class of property being only liable to pay 11 per
Cent. probate duty when it reached £BO,OOO, and so on to
£1,000,000. The hon. gentleman then referred to the in-
troduction of measures on this subject by Mr. Pitt, and to
the result which placed the law in its present state from
the year 1796. That measure was passed in an unreformed
House of Commons, when 182 peers and boroughmongers
were enabled to send their adherents into that house. The
hen. member, after referring to the measures introduced in
1854 to impose probate duty on the property of corporations,
said that the object of his present proposal was to equalise
the probate duty on real and personal property—that in fact
the owner of of the value of £BO,OOO should pay the
game probate duty as the poor man paid upon his £2O. Pro-
perty conferred by settlement, by deeds of settlement, or
gift, the amount of which he wasinformed was astounding,
yet it did not pay one farthing probate duty. Mr. Porter, in
his book on the progress of the nation, stated that less than
three-tenths of the property left by families never paid any
qty Now, he would ask, was that just or proper ? The
greatest men of their time were in favour of a revision of
the law as it-now stood. Mr. Pitt was opposed to it,
and the right honourable gentleman who now filled the
office of Chancellor of the Exchequer described it as
objectionable and absurd, and that it should be altered.
yaseing the Succession Duty Bill, the right honour-
able g9.l#l4aan said it would promote the stability of the
"untrXt,an give securi •
ty to their constituents. The right
11°12.
• qaon the member for Bucking
Buckinghamshire also
941 ed thq• hp saw no d•
Con, and that ti ,
ItAculty in dealing with the
disturbancesques-
in other countries, and the
falling of thrones,
serell ab had been said of the ying to the existence of a class
exempt from taxation.
enor-
mous taxation placed op. counties, but he believed the towns
paid equally as muchof the local taxes as they
also said that in the act of conveyancing did. It was
land a very heavy
tax was paid, but he denied it,and asserted that it was
managed like any other property. In
ecclesiasti-
cal commission recommended thatthis I:32an
state of things
shoed be altered, and that a transfer of landed property
was
should pay duty.
.Some years after a bill brought in
by the then Lord Chancellor to carry thoseree
tiers into effect, but having passed the House oefLtao7desnadnd
a
coins
dovn tothat house, nothing came of it. He thought
that as fiat was a representative legislature, and a reformed
Parliament, such an anomaly in the law ought not to be
tolerated. He appealed to the right hpn. gentleman and
hiq high sense of honour, and well known sense of justice,
to alter tiis state of things. 1!e hoped he would take the
subject in .o his serious consideration, for of all men he Was
the only one that could carry the abolition of this disgrace-
ful law.
Mr. HADFIELD seconded the motion. He wished to
know what distinction there could fiends between an estate os
410,000 a-year and money in, and , and why should
one be made subject to probate duty, and the other exempt.
The CHANCELLOR of the EXCHEQUER regretted

very much that t'• occupied the position in which ills hon.
friend the 'member for Lambeth placed him to-night, be
ktt:Use on former occasion• it tas his duty to mak impor-
tant proposals to the house ; and certainly ho w a glad to
acknowledge that the hon. member took a mos T rominent
part not only with respect to the Succession D y Bill, but
on others which placed the revenue of the ~ tint*, under
the direct control of that house. He had th , reatest satis-
faction in rendering that public tribute to his friend, be-
cause he made proposals which were in themselves just, and
which were law at the present time. On the present occa-
sion, however, his views were entirely opposed to those of the
hon. gentleman, because he believed it was neither just nor
good for any practical purpose that the house should re-
solve that real property should pay the same probate duty
as personal. Any one would suppose that the distinction
was this, that one property was real and the other personal,
and that the personal paid all and the real nothing. But the
hon. gentleman entirely omitted a most important fact, that
a very large portion of personal property which passes into
the hands of others pays no probate duty at all, because it
passed under settlement and was exempt—.

exteni."

Mr. WILLIAMS—But it ought not to be so.
The CHANCELLOR of the EXCHEQUER—The sue
cession duty did not apply to money in the funds, and he
believed that if his hon. friend's motion passed, it would
lead to a greater anomaly than now existed. Ho would pass
that by; but he did not think the speech of his hon. friend
clearly deAtribed what was meant by the succession duty.
He spoke of the succession duty in the time of Pitt; but he
(the Chancellor of the Exchequer) ventured to say that
none of the arguments which the hon. gentleman used in re-
ference to that time applied to the present. His hon. friend
said that what was then urged ought to be done at present;
but at the same time, what his hon. friend urged in that re-
spect was but a very small part of the question. His right
hon. friend, now Home Secretary, when he was Chancellor
of the Exchequer, succeeded in extending the duty, but the
view taken of the subject by his hon. friend would, is the
first place, be produetive of very small effect, and in the
next, it had nothing to do with the discussion. The Suc-
cession Duty Act was analogous to the Legacy Duty Act.
It was a tax on property paid eat of property itself. But
the probate duty was entirely different in its character. It
was a stamp duty, and one without compliance with which
persons proving the will could do nothing, and could not
give effect to the will. The probate duty, too, was not only
a duty of great antiquity in itself, but it was most effective
for its purposes. He should like to know if they adopted
the xesolution of his hon. friend how they could carry it
out. With respect to hereditary land, it did not require
any will at all to pass. There was nothing that could
enable them to lay hold of the land in its passage, and to
obtain payment of taxation in such a manner as his hon.
friend proposed, and his hon. friend would agree with hiin
that in dealing with taxation they must not look at it
theoretically but practically. What would be the first thing
that a person who had come into the possession of land
should do in order that he might pay according to its
value ? He should go through three or four different
operations in order to get at its real value. Could any-
thing be more inconvenient!? Why, in such a process,
they would be required to take two or three times more
from a person in taxation than would go into the coffers
of the State. The proposal of his hon. friend would not
only entail great expense and inconvenience in the
valuation, but it would also entail great loss. See how it
would operate. Suppose there were three or four co-
heiresses, who came in for landed property, and who re-
quired to value their land, and that ene co-heiress pro-
posed to go into the market to value her portion of it in
order to effect an adjustment, see what consequences and
difficulties the resolution of his hon. friend would be pro-
ductive of. Why, it would not at all work. If a man's
landed property were unsettled property, they would not
seek the Mode of taxing it proposed by his hon. friend,
but they would seek some other mode in order to bring
about the taxing qualifications. His hon. friend proposed
to apply the probate duty to land ; but the probate duty
which he proposed to apply to land took no cognisance
whatever of unsettled property, and by his plan some-
thing like foux-fifths of the property of the county would
be lost. The principle contended for by his hen. friend
would be attended with very great inconvenience and hard-
ships, if practicable atall ; but as Chancellor of the Exche-
quer he was prepared to say that it would not be found
practicable at all. He must eall in a whole legion of official
persons to assist him in carrying out his plan. He must,
for instance, call in the Attorney-General and a host of
other persons, in order, by some means, to enable the Chan-
cellor of the Exchequer to lay hands upon the pro-
perty. They had no difficulty in getting at the
landed income of real property, but they had great
difficulty in getting at that of other and different property.
The probability was, that instead of bringing landed pro-
perty into a position to yield taxation to the State in such
a manner as his hon. friend proposed, they would do
infinitely worse—they would sustain loss and confer no
benefit on the State. (Hear, hear.) He could not accede
to the proposal of his hon. friend, and he thought the pro-
posal he had made—and he was sure he would not make
it if he did not think it just—would net prove practicable,
and even if they regarded it for fiscal purposes, it would
not be warranted. (Hear, hear.) It was his duty, look-
ing at and considering all the circumstances,, to resist the
motion. (Hear.)
Mr. WILLIAMS, amid loud cries of "Divide," said
the right hon. gentleman had made a most ingenious
speech, but the right hon. gentleman had never, notwith-
standing, touched upon the point which he (Mr. Williams)
had in view. He maintained that it was most unjust not
to tax landed property in the manner proposed. If a poor
man was left the smallest sum of money by way of legacy
he was subjected to two and a half per cent. taxation,
while landed property was allowed to pass without paying
any duty to the State.
The house then divided, and the numbers were—
For the motion . 51
Against 167
Majority
The motion was consequently lost.
INCOME TAX.

Mr. HUBBARD, in rising pursuant to notice to move
for a select committee to inquire into the present mode of
assessing and collecting the income tax, said he did not feel
called upon to offer any apology to the house for attempting
to remedy, as far as lay in his power, the injustice and in-
-1 equality by which the incidence of the tax was accompa-
nied. It was a charge which had been denounced by Mini-
ster after Minister, the great excuse which had been ad-
vanced to justify its imposP ion being the stereotyped
phrase that it was meant to be merely of a temporary na-
ture. At the present moment, however, there appeared to
be every prospect that it would be continued for some time,
and the question of the shape which it ought to assume
was therefore one which commended itself to the serious
attention of Parliament. In the first year of its existence
the amount of the tax had borne to the aggregate revenue
of the country the proportion of £5,500,000 to £58,000,000,
while the proportion was at the present day £12,500,000 to
£70,000,000, and he must be a very sanguine man indeed
who anticipated that the revenue for the next financial year
could be brought up to the necessary amount without the
renewal of the burden which, under the head of which he
was speaking, was levied on the people. But it was not
simply because the income tax seemed to be inevitable that
he desired to see the mode in which it was raised undergo
revision. He did not mean to question the justice of the
statement that it was an admirable weapon to which to
have recourse in time of war, or that it produced great re-
sults, but he must contend that if it were to be laid up in
the fiscal armoury care should be taken that its edge was
kept keen and bright, that its use did not inflict heavy
blistering wounds and leave behind lasting and rankling
resentment. Now what, he would ask, were the features
of the tax which caused to be attached to it the odium
lin which it was generally held ? It was, in the first
place, said to be inquisitorial, but the complaints made
against it upon that score were, he must admit, in his
opinion, somewhat exaggerated, because, after all, the state-
ment of a man's income, which was rendered necessary in
the prDcess of its collection, need be made only to a very few
persons, who were bound to be secret and discreet in the
performance of their official functions. Although, however,
he made that admission, he could not help regarding the
tax as extremely unjust and unequal in its incidence, and
as tending as a consequence to foster and sustain an ime
mense amount of immorality. Into the history of its opera-
tion it was unnecessary that he should enter at any length.
He might, nevertheless, state that Mr. Hume had in 1851 ob-
tained a committee to inquire into the subject, and had sub-
mitted to their consideration a scheme supported by the
recommendations of eminent actuaries, for removing the
inequalities by which the imposition of the tax was stir-
reundel. That scheme the committee had regarded asitu-
practicable, but he should beg hon. members not to nin
away with the idea that no means of providing for the more
equitable incidence of the tax could, therefore, be devised.
For his own part, he had endeavoured to discover some
s implyup on
the
ee subjectevying
he
eo
mhiisghtdd means.
could
dkehne
hsuecshhsocuhldenitaell, eanthdeinwoerxdpl'a‘ienqiUgitahbilse'v'ieto w
of i
tin the h
tthl ixghutp,onnoe svpeercyibeosdoyf at
ca
cxoartdi nng,
tmoree s t
r equitablenug
objection th an
that its
indirect,
dteop
t ni,ehni cthe,
ahno however,
unlimitedthere
m'
extentas
was calculated to press heavily upon the labouring classes
—an objection of which Sir R. Peel with far-sighted saga-
city and laudable courage showed he understood the force
when he undertook the Herculean task of making Eng-
land the Emporium of free-trade and abolishing those
burdens which bore upon the subsistence of the pple.
Following the history of the income-tax from the period of
its imposition by that great statesman up to the present
day, he found that it had been placed before the House of
Commons in the light of a compensation tax, which, if
justly levied, ought to be levied upon the same principle
as the indirect taxation which it superseded. In dealing
with that view of the case he might be allowed to quote
the opinion of the late Mr. Wilson on the subject, who,
in the summary of his scheme for the equalisation or
the income-tax, which he had been fortunate enough, a few
days ago, to find in the pages of the Economist, said :
" The broad principles upon which I have proceeded may
be thus plainly stated : —I have attempted to regal d income,
not at its nominal amount, but in proportion as it is, from
its character, actually available for immediate expenditure ;
because it is oxae.tly,in, that relation that it would have con-
tributed to revenue under the sistem of Customs and Excise

duties, which the income-tax has replaced to a certain

Such was the language of Mr. Wilson, and he felt assured

the house would receive with deference the eiptessios of
the views oh the subject of taxation of a gentleman whose

great financial research and energy of mind had enabled

him to acquire a position in this country which caused him
to be selected for the discharge of those high and

impottant duties in the performance of which his
Life had been sacrificed. (Hear, hear.) He would

now pr,ceed to the consideration of the matter to
which they had to apply these rules. All incomes must
come under one of three heads. They were either the pro-
duct of capital in the shape of interest, rent, or the usufruct

of money; or they were the product of
,capital utilized by
the application of skill and labour ; or, lastly, they were
the product of unskilled labour itself. With the last

cat9gory they had now no concern. They could not
beneficially levy a tax from the earnings of pure labour.

In the first place, the cost of collection would be enormous

compared with the amount received ; secondy, the impost
would largely fall, as a matter of course, on the capital
which employed that labour ; and thirdly, it would wholly
neutralize the happy results of the great change made by
Sir R. Peel. Their attention must, therefore, be confined
to the two first categories he had named. With respect

to the first category—viz., incomes arising from invest-
ments either in visible property or money lent on any

public or private security, these comprised all that class
which some persons have described as " the lazy in-

come," but which he preferred to term " spontaneous in-
comes," because they were produced independently of
any personal labour or exertion by the individual
owners. All those incomes, when they had been brought
to their relative equality of bearing, and had had
allowances made for burdens of various kinds which
ought to be, but which were not, deducted from
the present tax, should in his opinion, be treated as incomes
of the highest character, and subjected to the largest amount

of taxation which Parliament in its wisdom should think it
necessary to impose. In the next category he placed all
trading and professional incomes, all salaries, offices, and
employments to which personal labour attached. The great
distinctive mark belonging to these was that they were all
industrious incomes, of which labour was an indispensable.

element—if the labour ceased the income ceased also

Being naturally precarious in their nature, they required

large abatements to be made from them on account of the
future provision which theindividual was obliged to make,

either for himself or for others dependent on him. (Hear,
hear.) And here he must say he hoped the house would

be content to deal with classes of income, and not with the
cases of individual owners. Ho therefore deprecated all
those invidious arguments which had the effect of confusing
things totally distinct in their nature. He deprecated
all ad captandum arguments and appeals ad misericordiarn

in favour of interesting and defenceless women, orphaned
daughters and widowed mothers, struggling on a pittance
derived from the public funds, as also all contrast between
such deserving persons and the selfish bachelor who, revel-
ling in the enjoyment of a large income derived from personal
exertion, would therefore receive the benefit of any allowances
granted to industrious incomes. He hoped the house would
deal with the question in a large and statesmanlike spirit,
and without any revival of bygone party struggles. Turning,
then, to the first class of incomes to which ho had alluded,
he would quote the following opinion given by Mr. Wilson,
to whom he had before referred. Mr. Wilson said :

" With respect to all incomes, I consider that the tax
should be regarded in relation to the essence of the property
from which the income is derived, and not to the accident

of the tenure under which it is held at any particular mo-
ment, so that all incomes are treated in relation to their
source only, without regard to the tenure of their owner—
excepting terminable annuities, which stand on special and
distinctive ground."
He asked the house to accompany him through the sche-
dules as they stood in the present Income-tax Act. In
Schedule A the first item mentioned was "land." It was
acknowledged that land was taxed at a rack-rent, and yet
everybody knew that rack-rent was subject to payments for
insurance, repairs, and agency before the landowner could
be said to have the net income available for his expenditure.
He proposed, therefore, that a deduction should be made.
equivalent to these necessary outgoings. On houses, to which
the same argument applied, he thought there ought to be a
still larger abatement, because the expense of repairs was
greater than on mere farm buildings. He next came to mines
and quarries, which were now rated to the income-tax on
the gross income without regard to the fact that such pro-
perty might be in a state of rapid exhaustion. A rational man
having an income of that description would ascertain the
probable duration of such property, and lay by a compensa-
tion fund to keep its amount intact. The house ought, on the
same principle, to allow a deduction from the income-tax in
order to compensate the outgoings on mines and quarries.
In schedule B stood farms, but he did not propose to touch
them, because he did not know that their occupiers, at
least, had anything to complain of. In respect to schedule
C, the public creditor was subject to this serious grievance,
that when he happened to hold his claim on the Govern-
ment in the shape of a terminable annuity the Government
took the liberty of taxing not only the interest which he
received, but the capital that was repaid to him. (Hear,
hear.) He wished to see that injustice terminated. Schedule
D dealt with industrious or precarious incomes. In regard
to these he thought he was not asking too much if he said
that an abatement of one-third of their gross amount should
be allowed before they fell under the incidence of this tax.
(Hear, hear.) Ho suggested that the same indulgence
should be extended to all offices and employments included
under Schedule E. He was not without authority in
making these recommendations, because in the Succession
Duty Act, introduced in 1853 by his right hon. friend, it
was provided that in estimating the annual value of lands
used for as purposes, houses, buildings, tithes,
rent charges, and other descriptions of property yielding a
fluctuating income, allowance should be made for all neces-
sary outgoings. That was what he asked—all necessary
outgoings. He asked that those who had to pay a tax year
by year should have the same measure of justice awarded
to them as owners of property when they came to be taxed
on succession. That class dispoied of lands and houses.
As a corroborative circumstance it might be mentioned
that in the income-tax recently promulgated in India an
allowance was made on houses, but it was limited to one-
sixth part of the rental if the owner could show he had
spent that in outgoings during the term for which he had
been assessed. Again, with refArence to mines and manors,
the 26th section of the Succession Duty Act made the
deduction of all necessary outgoings. These were his
precedents for the allowance of all necessary outgoings.
He now came to terminable annuities, and here the
right hen. gentleman the Chancellor of the Exchequer had
himself supplied a remedy for the evil in the 31st clause of
the Act, and according to the tables in the schedule annexed
to it for calculating those annuities. He simply proposed to
introduce the medium of justice provided by those tables
themselves. With reference to precarious incomes, the main
question which engages the interest of the community,
opinions thoroughly coincided as to the remedy to be aps
plied. That remedy was that they should make a consider-
able abatement on incomes of that description before taxing
them. Mr. John Stuart Mill upon this point said,—" I
would tax temporary or precarious incomes at a lower scale
than permanent or certain incomes (not becanse of their
lower selling value), but because their possessors are liable
to be called upon to save something to provide for their own
future years or for those dependent on them." Thus,
while rejecting the scheme proposed by Mr. Joseph Ilurne,
Mr Milt gave a definition of his own which led to the same
result. Some maintained that incomes of this nature should
be taxed at one-half, others at three-fourths of their amount.
He had been led by a series of calculations founded on what
was sLalcd by Mr. Porter is his "Progress of the Nation"
to adopt a somewhat different rule. In 1852 the question
of a revisiox of the income-tax was mooted in that house,
and inthe following year a new Interne-tax Act was passed
under the auspices of his right hon. friend. In the 51th
clause a concession was introduced for the first time—that
a saving of one-sixth out of any income, if invested in the
purchase of a life or deferred annuity, should be deducted
from the income before it was brought under the incidence
of the income-tax. This was his precedent—that was his
justification. Parliament had no right to treat the whole
industrious clasaesas children, saying to them that if they
were economical and saved their money and invested it in a
policy of life insurance, or a deferred annuity, a special in-
dulgence would be given to them. The industrial commu-
nity had a right to exercise their economy in any particular
channel. Having once admitted the principle of a deduc-
tion, Parliament had no right to tie them down as to the
way in which they should exercise their economy for the
purpose of receiving the amount of deduction conceded.
There was but one thing he found fault with in this clause.
Instead of one-sixth he would make it two-sixths, and no-
thing could be better than its effectual application. The
same indulgence he found was given in the Indian Income-
tax; so that the principle had been adopted by the mem-
bers of her Majesty's Government in several successive
stages; and it would be very agreeable to the house to apply
it in a still more expansive manner. Now, as to the mode
of assessing industrial income, Mr. Hume proposed to
charge interest,—say, at 3 per cent. upon the capital, or
assumed capital, engaged in ;industrial professions, to ca-
pitalise according to the age, or (in ignorance of the age) at
lsi years' purchase, the residue of profits, after deduction
of interest, and then to charge the income-tax. A. trader
having £lO,OOO capital, and making £9OO a-year, would be
treated thus by Mr. Hume's process, the income-tax being
3 per cent. :—Profits, £900; charge interest, £3OO on ca-
pital of £10,000; capitalise £6OO. at 161 years' purchase,
£10,000; total, £20,000; interest at 3 per cent. £600; in-
come-tax at 3 per cent. on interest £lB. The plea for a
limited assessment on industrial incomes which he had
ventured to advance was founded on the assumption that,
comparatively with incomes of a higher class two-thirds
only were expended, and the assessment ho recommended
was therefore limited to two-thirds ; thus, in the above
case, the £9OO returned as profits would be assessed at 2
per cent., or £lB, without requiring either the capital or
the age of the trader to be communicated. Another grie-
vous feature of the operation of the tax in its existing
share was the immense amount of fraud which attended
its collection. (Hear, hear.) He was sure that the Chan-
cellor of the Exchequer, who had so lively a sense of what
was just and honourable, could not fail to regard with in-
tense pain what he believed to be the necessary continu-
ance of a tax which involved the perpetuation of such a
mass of immorality. (Hear, hear.) The amount of delin-
quency which came to light was immense, and it might well
be supposed that the amount which did not conic to light
was still more extensive. It was obvious that schedule 1)
did not return anything like what it ought to do. The fact
was that people felt they were being robbed, and when a man
was smarting under injustice, whether that injustice came
from a private individual or from a Government, he would
endeavour to do justice to himself in his cm n way. (Hoar,
hear.) The only remedy was so to alter the tax as to snake
it, as far as possible, fall with equal weight upon all classes
of the community. (Hear, hear.) It was a curious fact
that, as the Act now stood, two men earning the same
amount of income might pay the tax in very different pro-
portions, without a violation of the law on one side or the
n. whilemA o r
me 1 1 than hr teahne absurd piece
other. For example—one might make an income of 110,000
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e
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The greatest indulgence is in that respect flown him by the

State. Merchants and professional men make their own re-
turns at their discretion, and whatever the return is it is
hardly possible to find out whether it be true or not." The
witness, therefore, c:tpressed the opinion that, in conside-
ration of the opportunity tints afforded to merchants and
professional men to cheat the Exchequer, they might to be
satisfied with the income-tax in its present shape. The
mercantile community looked upon such evidence with ex-
treme disgust, and the last thing which a man possessed of
any notion of morality or integrity would do would be to
avail himself of the subterftige suggested to him by the
witness in question. (Hear, hear.) The house would see
that the main conclusions at which he wished to arriVe
were—first, that spontaneous incomes should be assessed
upon the net instead of the gross rental ; and, secondly,
that upon industrial incomes an abatement should be
made of one-third. He believed that the amount of
abatement which he proposed might be stated as follows :-
1 upon. land, 1-12th ; upon houses, 1-6th; and upon industrial
I incomes, 1-3 d. An important question was the amount of
loss which the revenue might sustain from the adoption of
such a measure of reform. There would undoubtedly be a
diminished revenue arising from land and houses, although
the new modes of assessment which had been recently
mooted might go a considerable way in supplying the de-
ficiency so created ; but, with respect to schedule D, upon
which he proposed to make the largest abatement, he was
persuaded that the amount of loss would be little or nothing
at all. Ho had that confidence in the innate integrity and
justice of Englishmen that he believed they would when
fairly treated act fairly in return, and that the Government
would get as much out of two-thirds of the assessment,
under such a system as he had suggested, as from the whole
assessment at present. (Hear.) The Income-tax Act, it
might be said, was a very large measure, and its recon-
struction would be a work of great magnitude. He ad-
mitted that, but, still, ho thought that the measure of re-
form he had invited them to consider might be given effect
to by very brief and simple provisions. It would only re-
quire the following enactments That an allowance
from the rack or valution rent of lands be made of one-
twelfth for necessary outgoings. 2 That an allowance from
the rack or valution rent of houses be made of one-sixth for
necessary outgoings. 3. That an allowance be made upon
the rents or royalties of mines, quarries, and ironworks,
upon proof of diminished value,for the replacement of capi-
tal. 4. That upon tithe rent charge, besides the parochial
rates, an allowance shall be made of 5 per cent for repairs,
insurance, and agency, and when care of souls is annexed a
sum of £lOO, as curate's stipend. 5. That upon profits of
trades,: professions, and salaries, and offices and employ-
ments having duties discharged by the holder in person, an
allowance be made of one-third prior to the assessment. 6.
That section 133, of sth and 6th Victoria, cap. 35, be re-
pealed. 7. That all trade returns shall state the amount of
interest paid on borrowed capital, the same to be assessed on
the full amount thereof. 8. That for the purpose of assess-
ment to the income-tax the interest of the capitalised value
of all annuities terminable with years or life shall be calcu-
lated according to the tables 1 and 3, appended to the Suc-
cession Duty Act. It was with much anxiety, but not
without confidence, that he submitted the resolution to the
decision of the house. He was deeply impressed with the
magnitude of the interests at stake. and well aware how
vitally important it was to the finances of the country that
the mode of taxation by which they were supplied should
be regulated by equity and common sense ' • and should
carry with it the sympathies of the people. And further,
he could not but feel a greater solicitude for our national
honour, integrity and morality, than even for the advance-
ment of our country in wealth and material prosperity.

(Hear, hear.)
The CHANCELLOR of the EXCIIEQUER—The task
which I have to perform may at any rate have an agreeable
commencement, because it is my duty to acknowledge in the
face of the house that no one can be better entitled than
my hon. friend to submit this most important and most in-
tricate question to the notice of the house, inasmuch as he
is a man qualified for the work equally by his position, by
his character, and by the high reputation which he has
acquired in the discussion of questions of political economy.
(Hear, hear.) Having said so much of the person who
makes the proposition, I wish that I could continue in a
similar strain ; but I must confess that both the proposal of
my hon. friend for a committee of inquiry, and more esr e-
daily that which it is not possible to separate from his pro-
posal of a committee, viz., the particular nature of the plan
which he has submitted to the house, and which is to be
the text and guide of the inquiry—compel me to pursue
a different course. (Hear, hear.) I shall not enter
into any general statement of opinion about the
income-tax. My own opinions upon it—as far as
they are' general opinions— have been declared long ago,
when I formerly held the office which I have now the
honour to fill ; and I am not aware that I have in any re-
spect departed from them. I should also say of my lam.
friend's motion that I shall not look so much at its terms
and its technical character as to what is its avowed object.
No doubt many questions arise in csnneetion with the as-
sessment and levying of the income •tax which may be in-
quired into by a committee with more or less of utility, but
at any rats without any peculiar difficulty or danger. If,
for example, we were to take the question of the arbitrary
standard, so to call it, which has been fixed for levying the
income-tax under Schedule D—a system which the Legis-
lature has established according to the best of its information
and belief, but which of course involves many points open
to discussion, if wo were to refer to the question whether the
income-tax should be collected half-yearly or quarterly ;
these and many other matters might be the subjects of in-
quiry by a committee without raising any difficult or dan-
gerous questions. But these are not the subjects to which
my hon. friend wishes to direct our attention ; and I must
say that I think he has done wisely in confining himself in
his speech to the exposition of his main purpose, because
either he or his committee would be distracted from that
purpose by mixing with a question so grave and so deep as
that upon which he has just now dilated those other mat-
ters which refer, in comparison, to the merely technical de-
tails of administration. (Hoar, hear.) My hon. friend's
proposal is that different rates of tax should be laid upoa
the different schedules. (Hear.) He has stated that in a
manner which gives a colour to his proposal for a com-
mittee—(hear)—nor can the house vote in favour of his
motion without attaching at least a provisional sanction to
his plan for reconstructing the income-tax. (Hear.) My
hon. friend has himself stated this point in a most candid
and ingenuous manner ; for he said that he could not ask
for a committee from this house if he was not prepared to
preface that demand with the submission of a plan which
should be apparently unexceptionable in its main outlines
and general principles. The demand for a committee
of inquiry is a very grave demand—at least it is a very
grave one for those who take the view that is taken by
Her Majesty's Government with respect to any plan
which shall alter the main structure of the income-tax
by imposing different rates of tax upon the. different
schedules. To a committee of general inquiry, particu-
larly if generally desired by- the house, they might not
have seen—l ventured upon a former occasion to intimate
that I did not think they would see—any vital objection;
but, at present, the issue which we are join must in the
main be not whether we are prepared to adopt the precise
details of my hon. friend's plan, but whether we are pre-
pared to give encouragement to the principles which are
at the bottom of those details and which formed the sub-
stance and staple of his speech, (Hear, hear.) Ido not
think that Her Majesty's Government would be justified
in assenting to the proposal of an inquiry so prefaced,
avowedly and without disguise holding up the banner
which my hon. friend has lifted upon this occasion, unless
they were prepared at least to say that they saw no chili.
culty of a character approaching to danger in any coun-
tenance of a plan founded upon such a basis. I do not
wish to ruffle the sensibility of an author, but I think that
my hen. friend is entitled to less credit for originality
than he seems to think. It is my fate almost daily to
receive financial suggestions identical in their purport
from scores of gentlemen, each of whom believes himself
to be the original and sole parent of the idea. That
is not quite my hon. friend's case ; but I see opposite
me two right hon. gentlemen who may substantially
claim some of the credit which is to be given to his
plan. The right hon. gentleman the member for Wilts
proposed in the committee of 1862 that the tax on
Schedule D should be three-fourths of the tax
on Schedule A. (Hear, hear.) My hon. friend pro-
poses that it shall be two-thirds. The difference between
them is not great, but such as it is it was very nearly split
by the right hon. gentleman the member fer Bucks, who,
on the part of thelGovernment, proposed in 1852 that the
tax on Schedule D should be 5d., and that on Schedule A
7d. in the pound. The authority of the right hon. gentle-
man, lent at that period for a moment to a plan substantially
like that of my hon. friend was, I think, subsequently—l
must say to my great satisfaction—withdrawn. But my
hon. friend substantially reproduces this proposal that we
should proceed to adjust by deduction—for hedoes include
another feature in his plan—that we should- proceed to ad-
just
by deduction the several payments of income-tax in
most, at least, of the different schedules, and to establish a
great difference by a very great reduction in the case of
Scedule D. That, I think, is a very fair description of the
general character of the plan of my lion. friend. I will not
enter at large upon the financial portion of the speech of
my hon. friend ; but 1 must say that I was struck with the
sanguine temperament which appeared to have dictated it.
For how did he treat the case of Schedule D ? He says
that there are enormous evasions in Schedule D, because
persons engaged in trades and professions feel that by law
they are robbed. My hon. friend feels deeply the immo-
rality attending the collection of the income .tax ; he knows
that that immorality is concentrated in Schedule D, and he
proposes to reward Schedule D by a reduction of one-third
of the tax. (Hear, hear.) But what a sanguine view my
hon. friend takes of the morality of the people 1 He says,
" They commit this peccadillo because they feel that they
are robbed by the law, but if you will only deduct one-third
from the tax which they aro liable to pay it will set it all
right again." (Hear, hear.) You will recover and recoup,
he says, the one-third of the tax leviable under Schedule
I), surrendered by law, in consequence of the honesty of
the taxpayer, moved by this appeal to his feelings. The
offer must be of precisely 33 per cent.—that is the standard,
that is the temperature which is necessary to bring him up
to par in morality. (Laughter,'and "Hear, hear.") I
must confess that I entirely differ from my hon. friend
with regard to his opinion as to results. As I have
spoken 'of the immorality under schedule D, I must
not omit to state my conviction that a largo portion of those
whO pay under it every farthing that they ought, and in
in every case of doubt rule the doubt against themselves—
(hear)—but there is no doubt that all the roguery in the
country lurks in the folds of that schedule. In the year
1850 I produced before the house the undoubted case of
the residents of a particular street in London, who had re-
turned their profits for the income tax, and had also re-
turned them for compensation, and who had in the latter
. case returned them at 10 times the amount which they had
returned for the former purpose. (Hear, hear.) I ask may
hon. friend, does he not think that these worthies who
were unfortunately not individuals, for they were inhabi •
tants of a street taken together—does he think that the
magical and soothing effect of his 33 per cent. would have
been such that they would have raised their statement of
profits ten times, or does he think that perhaps the truth
was between the one-tenth which they sent inafor income
tax, and the tenfold sum' which they,demanded for com-
pensation ? If so, it is clear that these gentlemen would
have been sad losers by my hon. friend's proposal, because
to come up to the true standard of their profits they would
have had to add infinitely more than one-third to their

assessments. I must say I think parts of the speech of
my hon. friend were calculated to exercise influence over
the minds of the taxpayers under schedule D. It is cer-
tainly a strong expression to say that they cheated the
Exchequer because they felt that the Legislature was rob-
bing them, and I felt sorry to hear that expression used,
for it is not impossible that ono of these wavering con-
sciences--(latighter)—when in doubt as to the return
which he should make on the next issue of assessments,
may recollect that a gentleman of my hon. friend's high
character declared in his place in Parliament. that he
was robbed by the Legislature—(heart hear)—and may
find some comfort and encouragement in the operation of
reducing his profits from the sanction which he may
think he defines from that statement. But when my
how friend went on to comment upon the inefficiency of
Schedule D in making every man tax himself—omitting to
state that no man is taxed higher than his income in any one
year, and that the benefit of averaging is glues to him when-
ever the average is in his favour—instead of tailing us that
the Legislature robbed the taxpayer under Schedule D, he
ought, I think, to have drawn a more just and generous in-
ference, and to have stated the length which the Legislature
has gone to diminish in some degree the severity and inqui-
sitorial nature of the tax, exposing itself to criticism, violat-
ing uniformity, and introducing a positive anomaly into the
enactment in order to mitigate the incidence of the tax on
the traders of this country. (Hear, hear.) That, however,
was not the use he made of his argument. Let us now look
at the proposals of my hon. friend. He proposed to proceed
in the most agreeable manner by, a method of deduction. He
goes first to one man and says, " I deduct so much from you"
—he next goes to another and says the same, and from the
last, under Schedule D, he makes an enormous deduction.
It would be a niost pleasant process to go on deducting all
day—to give to every man his relief. The landlord might
think you were not sufficiently liberal to him in deducting
only one-twelfth, but it is impossible to criticise too closely
the plan of my hon. friend—it was conceived in a spirit of
such unbounded generosity. (A laugh.) Lands were to have
one-twelfth, houses a sixth, mines something which none of
us sitting here exactly understood—(laughter)—and Sche-
dule D was to have a third. Who is to pay for these deduc-
tions ? (Hear, hear.) I want my hon. friend, when he makes
these captivating speeches, to write on the frontlet of the
financial edifice which he constructs this grand and true
doctrine—" The abatement of one man is the taxation of
another." (Hear, hear.) If you take away ld. to relieve
somebody under Schedule D, you must put it on somebody
else. It is not enough to say, in general terms, " Such is
my confidence in the morality of the English people that
they will pay up, and set the account nearly right ,"
that I can assure you is not the way in which we must
deal with the hard and rigid figures of finance. But my
hon. friend says he will deal with classes. I suppos,:s he
will not deny that by his scheme schedule A. is to be most:
highly taxed in proportion than' any other. if you make
deductions of one-twelfth and one-sixth on the two great
elements, lands and houses, in schedule A, and if from
schedule D you deduct- one-third, or twice the amount, it
follows that you raise the taxation on schedule A relatively
to schedule D. (Hear, hear.) I should be very sorry to
commend my hon. friend to the purgatory of reading Par-
liamentary speeches, especially such as have been delivered
by myself ; but in a responsible position, and endeavouring
to convey results of the best inquiry which the Government
of the day could make, I did state to the house that at that
moment, with a sevenpenny income-tax, while schedule D
paid 7d. on the net income, schedule A paid not less than
Pd. Has my hon. friend examined into the question, or
why does he think it would be just to impose further bur-
dens on schedule A ? (Hear.) Ho says you ought to take
one-twelfth, or about 8 per cent., off lands. A deduction to
that extent would in some cases be insufficient, while in
in others it would be exorbitant and wholly unnecessary.
In Scotland, for instance, where most of the charges are
borne by the tenants, why should the landlord have one-
twelfth deducted P As to the article of agency, I cannot at
all admit that it forms a legitimate deduction. If a man
does not choose to take the trouble of collecting the proceeds
of his own property, he is not to expect that the charge
which he thus incurs will be allowed him. (Hear.) In
cases, moreover,where the landlord does not pay for repairs,
8 per cent. would be an extravagant and seedless boon ;
While, if he is liable to them, the allowance would be in-
adequate. My hon. friend's calculations with regard to
houses break down utterly. It is totally impossible to make
anything like an average of repairs. They may depend on
twenty things—on the building materials, on the nature of
the particular climate, whether wet or dry, on the ren-
tals of the houses, and the classes of occupiers. In
many instances five per cent. would be an ample allow-
ance for repairs ; in others 25 per cent. would not be suffi-
cient to cover the reduction in value. Nobody denies the
inequalities of the present tax ; I cannot pretend to deny
them—l do not seek to disguise them ; but my hon. friend
by coming in and giving a boon to some taxpayers would
aggravate the sense of these inequalities sustained by others.
It has always been a popular notion to fix different rates o
schedules, and it is possible that this house may some dayf
be drawn into a resolution in favour of such a plan ; and,
indeed, it would hasie been more convenient if my hon.
friend had adopted that course instead of moving for a com-
mittee of inquiry. A bill based on such a resolution may
even be brought in, but I tell my hon. friend that never
will such a plan as he has proposed stand the scrutiny to
which it would be exposed before passing into law. My hon.
friend proposed with regard to mines—the property, of all
others, which is most intricate and difficult to comprehend,
except under most favourable circumstances—that every
mine in the United Kingdom should be valued with a view
to the imposition of income-tax, and that the valuation
should be renewed from year to year. Why, to attempt to
obtain anything like trustworthy accounts of the value of
the different interests in particular mines would, in the first
place, lead to such an amount of fraud as would flood Sche-
dule A as well as Schedule .D with immorality, and, as-
suming the valuation to be made in the best and most satis-
factory manner, it would double, treble, or quadruple the
incidence of the tax by the expenses necessary for arriving
even at a proximate conclusion. My hon. friend founds an
argument on the Succession Duty Act, which provided, with
respect to certain branches of real property, that valuations
should be made with allowances for outgoings. But under
the Succession Duty Act we were dealing with property
which was not to pay small amounts every year, but which
was to pay a large amount once in 35 or 40 years ; and it is
perfectly intelligible how, in the one case, it might be well
worth while to incur the heavy expenditure inseparable
from valuation, while in the other such an outlay
would be unwarranted and unnecessary. (Hear.) There
is a provision for valuation in certain cases. There is a
provision for entering into an examination of outgoings in
order to fix the amount. And, by-the-by, I must remind
my hon. friend that when Parliament passed that act we
did not say that outgoings should be estimated at one-sixth
or one-twelfth, but we said that there should be an exami-
nation of what the outgoings. were. (Hear.) What was a
perfectly good plan in the case of the succession duty would,
from the nature of the case, be a totally impracticable one
in the case of the income tax. In Schedule Dmy hon.
friend says there must be a deduction of 33 per cent.—a de-
duction on everything in that schedule ; but there is to be
no deduction in Schedule A. I say no deduction, because
the compensations which my hon. friend proposes would be
much more than balanced by the additional burdens which
Schedule A. should bear in consequence of the relief to
Schedule D. But in Schedule D there is tobe a uniform de-
duction of 33 per cent., and in this way my hon. friend pro-
poses to cure an injustice and get rid of an anomaly. Now,
let me see how my hon. friend cures the injustice and gets
rid of the anomaly. There are many businesses under
Schedule D worth 25 years' purchase. (No, no.) Ido not
pretend to say they are all of so fixed a character that each
is worth 2,5 years' purchase. (No, no.) I do not mean to
say that this is the average value of trades and: businesses.
I speak now of businesses of the higiest class, and I say
you may find some under Schedule D-which aro worth 25
years' purchase. The profits of a banking business are in
many cases worth 25 years' purchase. From that down-
wards you come to what are worth 15, what are worth 10,
what are .worth 5, and what are worth less than 5. My
hon. friend proposes to apply a uniform deduction of one-
third to the whole. If hon. gentlemen who hear me think
25 years' purchase too high for any business, let them take
any figure they like. It is not necessary for me to state
what figure I consider to be the correct one. It is enough
for me to say that there is an enormous difference in the
values, att).,,l that if I take ihelyJst business under Schedule
D, it is worth five or six times as much as the worst busi-
ness ; but my hon. friend proposes to make a reduction of
33. per cent. on the best, and to put the worst on only the
same footing. (Hear.) If you can make a deduction which is
compensated for without any unjust burden being placed
in another direction, that is very fair; but if everything
which my.hon. friend takes off of anybody must be put on
somebody else, then I say his plan only aggravates the evil
which it professes to cure. (Hear, hear.) And what per-
sons are to bear the brunt of my hon. friend's plan ? They
are the fundholders. He has invented a deduction for the
landlord, he has invented a deduction for the owners of
mines, he has invented a deduction for the holders of
houses, and he has invented a deduction for persons in
business; but he 'admits that he has no deduction for the
fundbolder. (Hear, hear.) And who is the fundholder ?
The fundholders are a body of 300,000, and the great mass
of these are persons holding £2O, £3O, £4O, or £.50 a-year.
The great bulk of them are people holding life interests.
My hon. friend declines to deal with individuals; he says
he deals with classes. Take as a class the persons with
small incomes—persons whose incomes may be £lOO a-year,
and whose interests are but for a short term, whose lives may
not be worth five years' purchase; and my hon. friend pro-
poses to aggravate on these people the burden and percent-
age of tho tax in order that he may deduct 33 per cent. from
the Income-taX payable by the wealthiest banker in Lon-
don. If the object of the house be to cure an injustice and
get rid of an anomaly, I do not know what arguments may
'hereafter be in vogue, but the arguments used by my hon.
friend are not those by which the financial proceedings of
this house have hitherto been directed. I wish to treat
with the utmost respect the feelings of those who I know
entertain—and honestly entertain—the idea that an equal
rate of income-tax is unjust. I have always felt that that
sentiment is not supported by reason, and such has been
the opinion of much greater men who have had to deal
with this tax. But though it is not supported by reason it
is deeply. rooted in the popular mind, and therefore, as
far as it goes, it is an objection, and a strong objec-
tion, to the use of the income-tax as a permanent im •
post. Necessity drove us to the income-tax in 1842, and
necessity has attached us to the use of it. (No, no 1)
When I used the word " attached" I meant not mka bride-
groom is attached to his bride, but as a captive is attached
to the car of his conqueror. (Laughter and cheers.) Others
may be of opinion that on the whole the income tax is a con-
venient instrument for raising a revenue ; but I assure my
hon, friend and those who think with him that I .think
great respect is due to the feelings of those who are un-
doubtedly impressed with the belief that the general ar-
rangement of the tax is unjust, while I am of opinion that
it is incapable of improvement. My hon. friend has shown
us that this question is one between Schedule A and Sche-
dule D. Ido not regard this as a mere motion for inquiry,
because after his speech it is impossible to separate the m-
quiry he asks for from this proposal itself. The case, I say,
lies between Schedules A and D, because Schedule C can
scarcely be taken into account when we consider its num
hers. I think my hon. friend was not successful when deal-
ing with the case of the fundholders when he reminded us
of the act which provides that no tax shall bo levied on divi-
dends paid on money lent for 'the public cot venience. It
may be that in form you have not kept faith with the pub •
lie creditor, but in everything else you have; because laying
the tax on the dividend is mere machinery. You have
merely required'him to pay the same proportion of his in-
come as any other person pays, and no more ; but, with the
law before him. my hon. friend proposes to act in a manner
that would not be in accordance either with its letter or its
spirit. lie is sailing very near the wind. Before the house
comes to the conclusion that the arrangement of the income
tax ought to be altered in the manner proposed bylmy, hon.
friend. I would entreat them to consider what we did in 1853.
The Government of Lord Aberdeen was then in office. It
was thought that a part of the burden ought to be removed
from incomes which were the produce of exertion, and
put upon incomes which were not the produce off
exer-
tion ; and the Government did that in the first place by
exempting from income tax within certain limits-.--one-
sixth—whatever portion of income might be applied for
life insurance. And here I :would say that my hon. friend
ought to take salutary warning from his own objection.
Mil I stuot.gly theft ,the priAciplo did, W a cmiderable