The Sun.
London, England, 1844-04-09 00:00:00

The income-tax• does not press more severely, or
rather unjustly, in any quarter, than upon the in-
surance companies. It is well •known that these in-
stitutions of nec.ssity pay income-tax by d duction
upon a sum far beyond their profits ; for all their
income is taxed, and a part
.only is profit. The busi-
nesi of life insurance consists in investing the pre-
miums received, and accumulating them at compound
interest, to "meet f Imre losses. This accumulation
of the income of their investments is the basis of a safe
or prosperous career, for an office that should treat tins
income as profit, and divide it among the parties inter-
ested, would infallibly soon become bankrupt. Yet as
the investments are either in the furvis or mortgages, the
whole income is taxed by deduction as if it were profit,
and the offices pay, consequently, much more than they

ought.
The practical working of this has turned out even
worse than the theory, for many of them have recently
had notices of surcharge from the surveyor. They ap
pealed, most of them, to the Commissioners for general
purposes, who, being men of business, and knowing
something of life insurance, immediately relieved them.
Others have appealed to the Special Commissioners'ap
pointed by Government, and have been sub.!ected to
great annoyance in so doing, for though it is made ap-
parent enough that an office has paid the tax on a sum
far exceeding the entire profits arising from every source,
the Special Commissioners endeavour, to impose a
further tax, on the allegation that there is a profit apart
from the income of investment. From the complicated
nature of life insurance accounts, the offices are neces-
sarily exposed to-great trouble and inconvenience in the
detailed investigation to which they are subject under
this impression, a hich is of course a fabulous one.
The case is exciting the more attention in the City,
because it is one of a 'Class embracing banks and other
investment companies, where, by the machinery of the
Act, parties ,are made, by deduction, to pay a tax greatly
beyond the rate professed to be imposed by Parliament,
and for this the Act affords no remedy.
This form of taxation, hard enough when it is im-
posed tacitly by deduction from income, becomes offen-
sive and oppressive when sought to be actively enforced
and extended by the Government officers.
A correspondent offers a suggestion to the Chancellor
of the Exchequer, connected with the management of
the public debt, somewhat startling perhaps, but which
there can be no harm in letting go to the world at la-ge.
By the means pointed out, and without the imposiiion
of a single fresh tax, he anticipotes the " entire liquida-
don of-the national debt." This is to be accomplished
solely by the aid of the money saved, and to be saved,
by the reduction of the Three-and-a- Half per Cents., to
be applied exclusively to the redemption of the debt
(say at par), and allowed to accumulate at compound in-
terest. He estimates that, in 95 years, the whole debt
of 800,000,0001. may by such means be paid off ; but
that, if this course is persevered in, the fund-holders
will probably be glad to accede to a further reduction of
interest, and these savings being applied in the like
manner, the liquidation might be c )mpleted in 50 years,
or less. Gnat glory would, as this writer thinks,
redound, to the statesman who planned, and great
strength to the country which executed, so magnihcenc
a project; but the difficulties which beset it are, we fear,
insuperable. Not to mention the necessity it involves of
perpetuating the income-tax, to which alone the present
surplus of revenue is owing, and for the relief from which
all persons are eagerly looking to this and other sources
of savini., it is a delusion to suppose that any course of
financial-policy can be persevered in during 50 years, or
during one half of that time. This is the old error into
which. Mr. Pitt fell, in regard to his wonder-working
sinking fund, and it is but a few years since that states-
men have arrived at Cie conviction that a sinking fund
cannot subsist by borrowing, and that its only leiptimate
basis is a surplus of income over expenditure. Ills, it
is trite, the writer in question contemplates, but then he
must keep on the income-tax, which eV! not be toleraten
at all, or, at any rate, for such a purpose.