The Sun.
London, England, 1842-03-18 00:00:00

TIM SUN, LONDON, FRIDAY EVENING, MARL. I 185 1842

of Supply in the other House, and no other knowledge
whatever on that subject had been obtained by your
Lordships' House. Your Lordships had not re-
ceived the slightest intimation at all in re-
gard to that subject, save asj announcement in
the Speech from the Throne at the beginning
of the Session,. in words nearly the same as
the announcement which I have just read to your Lord-
ships from her Majesty's Speech at the beginning
of this Session. My Lords, I think I have said
enough, both on the question of principle and on the
question of precedent, to justify the course which
I am now pursuing. I stated to your Lordships,
when I addressed you on a former occasion, that
on the whole it appeared to me to be pro-
ductive of the greatest possible inconvenience,
that your Lordships should not among yourselves
be enabled to enter into all the considerations
of this question until it should have passed the
other House of Parliament. If indeed my opinion were
clearly and decidedly against the income tax ; if I saw
no reason whatever for advocating the necessity of
this important measure ; if I had determined, under
all circumstances to wage an implacable war against
this impost, which, in another place, and on a former
occasion, I strongly, and not unsuccessfully opposed ;
and, indeed, -I might wait until I had seen
what amendments had been made in the measure until
the measure were regularly before your Lordships,
in order to give vent to my feelings of
implacable hostility against it, and in order to
try wholly and entirely to defeat it. But, my
Lords, that is not the position which I intend to
occupy, and that is not the position, I venture to take
upon me to say, as at present advised, that your
Lordships believe I intend to occupy. I maintain
the same opinion as to the nature of that tax that I have
always had, but I will not go so far as to say that cir-
circumstanced as we now are, after the measure having
been passed to which I and others have been made
parties, regard being had to the finances of the country,
that we are bound altogether to refuse to have re-
course to this means of raising supplies. I was a party
with my Noble Friend to the great measure for giving
freedom to upwards of one million of our fellow-subjects,
who were kept in a state of slavery. I was a party to
the payment of that enormous, but, in my humble opi-
nion, and, with my strongly-cherished feelings, I
feel bound to say not too high a price for that
great measure of justice, of humanity, and of true policy.
But I know well that from the payment of that large sum
of money has resulted a charge upon the revenue of this
country, which forms a considerable portion of the
deficit of which we complain. From 700,000/, to
800,0001., the interest on these 20,000,000 L, undoubt-,
edly form a considerable porticn of the defi-
ciency. I was a party—a deeply interested party
to another measure of the late Government—a measure
in my opinion most properly passed by the late Go-
vernment, I mean that by which duties upon communica-
tions, postage duties generally, have been reduced to so far
moderate a eompass, compared to the former bulk, that
I believe you may say a sum nearer to a million
than 800,0001. have been lost to the revenue from that
source. Here ends my responsibility as an individual
for the deficit complained of. Whatever has arisen from
other causes—l will not now stop to estimate the amount,
or inquire the origin of them—but I wish to submit on
the present occasion, in addressing your lordships, that
no party view, no personal bias, could direct
me, and I would fain avoid every topic whatever, that
can for a moment distract your attention from the im-
portant question which I have undertaken to bring before
your Lordships—above all every thing that would give
rise to unseemly party or personal animosity upon a
subject of such great and vast importance. But the
fact was undeniable that the deficit arising from these
two causes, to which I have shortly adverted, is large and
considerable, and remains to be supplied ; and also that
we are bound to make up that deficiency—seven
millions and a half, in five years ; above two millions
and a half estimated as the least possible deficiency
for the next year, making ten millions upon these six
years, when there is but too great probability that in va-
rious parts of our empire circumstances will add to the
amount of necessary expenditure to be discharged, then,
my Lords, dees not the public credit demand—does
not the security of the empire demand—that a
great exaction should at length be made by the
Government and Parliament of the country, and that we
supply that lamentable deficit in our financial resources,
so as to make expenditure no longer exceed our
revenue. That question can only be answered
in one way an affirmative answer, being, I
I believe, by universal consent of all men, both
in and out of Parliament. But one other question
remains before we feel ourselves driven to look in reality
to this most objectionable tax—that other question is,
have we any other means of making up this deficiency?
My Lords, I have heard of some rumours—l have
heard of some vague and general assertions, that you
may by reducing the duties on consumable commodities,
by lowering the Customs and Excise imposts, you
may by these means so increase the consumption
as to increase the taxes, and so make the
deficiency good. But, my Lords, all experience is
against such expectation. Don't imagine for one
moment that I wish to underate the advantages
of lowering duties. Don't suppose that, contrary
to all the opinions of all the able men who have uni-
formly considered this subject, I hold the least doubt
that the revenue would ultimately be greatly increased.
from a judicious lowering of the duties thatnow pres on
the consumer ; but the difficulty is here, that this result
will come too late, and that if you lower those duties as
much as you dare, and ever so judiciously choos-
ing those very articles that now press most on the con-
sumer, and of which the consumption would be
most Targely increased, that, if you make also the
strongest efforts, and use them with ever so much judg-
ment, that it will be too long before those reductions
will yield the revenue required, and that consequently,
those expectations give no answer to the question
which ought now to be answered in order to
escape from the sad necessity in • which the
country is now placed. I need only remind you of those
attempts which have already been made, most properly
and beneficially, with a view to an immediate increase of
the revenue, but which turned out to be quite
vain. Let us, for example, take the case of the
lowering of the duty on wines. This reduc-
tion was made by my Noble Friend opposite,
in the year 1823 or 1824 to the amount of 54 per cent.
What became of the consumption ? It was very materi-
ally increased ; but what became of the revenue? It was
lowered by one-third immediately, having fallen from
2,100,0001. to 1,400,Q00/. By degrees the revenue
recovered, so that the loss was one-fifth in-
teed of one-third, but to this very hour, and after
twenty years have elapsed since the lowering of the duty
by 54 per cent., wine has never recovered its former
amount, the loss to the revenue still remaining one-
fifth. So it was with the duty on tobacco, which was
lowered 25 per cent., or from 4s. to 3s. I do not mean to
say that the consumption did not increase in consequence,
It did increase very materially, but a deficiency
on the revenue still remained, the loss being
about one-seventh. Again, sugar was reduced
11 per cent., the duty having been lowered
from 275. to 245. In consequence the revenue
from sugar fell off ' • the consumption was increased; the
subject was relieved ; the comforts of the people
were increased; a most excellent proceeding took
place from the admirable act of lowering the duty
on sugar admirable, I say, for all purposes
except that of revenue, and the revenue from sugar is
now one-third lower than it was before.
The case of kelp is still stronger. The duty on that
commodity, which is largely used in manufacture, was
reduced—and very properly reduced one• halt—for there.
duction was a great relief to manufacturers. But what
has been the case with the revenue ? The revenue at
once fell off one half, and it has never since reco-
vered to more than one half of its former amount.
The same thing is true of all other reductions, ex-
cept the reduction of one or two articles. In the case
of rum and coffee, there has been an increase of the
revenue, consequent upon the reduction of duty. My
Lords, I believe no one can produce one other instance,
in which the lowering of duty was not attended with
loss to the revenue. Coffee, indeed, is a strong instance,
and one, where a great lowering of the duty was at-
tended with a great increase of revenue ; and in the
course of a few weeks the consumption began to
increase over what it had been before. But three
years elapsed before the revenue regained its for-
mer station. I think this shows the necessity
for a time of resorting to other means, when
the difficulty that presses you requires to be immediately
met, whether you do so by an income tax or a property
tax ; for I think no more need be said to show that
lowering the duties will not give that immediate in-
crease, although it may probably, nay certainly will
in the course of a few years yield an increase. But for
the year's supplies, and to proceed for the public service,
that mode of proceeding is not open to Parliament. But
now that Parliament is compelled to consider to what
measures it shall have recourse, it becomes my duty to state
nteh yhe
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ay
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shall continue only to be levied while the peculiar ne-
cessity that alone can justify it, shall continue to exist;
and, on the other hand, to see that it shall be stripped of
all those portions which render it, and have in past times
rendered it, odious to the people of this country.
My Lords, a very great delusion appears to me
to prevail on the subject of an income tax
ynou theo
to
on propose.
—and to prevail especially amongst those classes of the
people, for whom I feel, and always have felt, the deepest
interest—l mean the labouring people of this country,
as to the operation of an income tax upon their interest.
It is very common for
.:them to say and for those
who undertake to instruct then*, and ought to know
better—to say that they bear a portion of that
tax. But they ought to know that the labourers
had no interest in income, and that an in-
come tax or a property tax never can affect them.
My Lords, there cannot be a greater delusion. The la-
bourer is at once directly and largely interested in every-
thing that diminishes the fund; and as that fund is the
growing capital of the country, the capital acme
mulating from year to year, or the income of
the country, whatever breaks 'in upon that ca-
pital, and prevents that accumulation, goes directly to
diminish the fund out of which alone the labourer can
be paid. The manner in which our income tax operates
upon those who pay it, if your Lordships will only
for a moment attend to it, will clearly show how
directly the levying of such a tax must affect the
interests of those whose labour that income tends to
employ. You levy so much per cent. from those
possessed of income. All that is withdrawn, if
they are persons who employ it in a lucrative market,
all that is withdrawn from that employment. If they
were either farmers, or manufacturers, or traders of any
description, whatever they had to pay, that tax was
either a portion of their income which they were accu-
mulating, or it was a portion Of their income which
they were expending in the courge of the year.

If it was a portion of their income which they
were accumulating, then if accumulating—if laid
by—it produced a profit on capital being added
to their capital, and consequently the additional profit
derived from it was added to their income, and increased
the income which they were to spend the year after.
That income, so increased, which they were to expend
the year after, no longer is expended by them, because
the money in the capital was taken away from them,
which gave rise to that income. It is taken from them
to be employed by others in another way, in
supporting labour of another description—that labour
which adds nothing to the wealth of the community.
If, again, instead of being hoarded—when I say hoarded
I use an inaccurate expression, for men do not hoard ;
their earnings, they expend them in such a way as to
yield a profit, an additional profit the next year to what
they had last year ; but if, instead of being accumu-
lated, and sogoing to increase their capital, and by in-
creasing their capital to increase their next year's income;
if it was a portion of their income which they did not
accumulate, but expended during the year, then that by
the operation of an income tax, is withdrawn from its
former occupation. Now, what was that former occu-
pation in the case of money being spent as income ;
and what is that occupation of the profits
of the capital, in the ease of its being accumu-
lated, and not spent within the year ? The
manner in which it is employed will depend, no
doubt, upon the class from which it comes—classes
of mere annuitants, who are not engaged in
business, employ their capital not in such a
way as to be productive of other capital, but to promote
their own comfort, in the purchase of consumable com-
modities, in maintaining servants, and in other matters,
which go to make up what is called an establishment.
The other classes of the community are the traders, the
manufacturers, and the farmers. Now, let us take the
first or higher class of society to whom the argument
is supposed less exclusively and immediately to
.apply. I
allude to those Who employ their incomes in consump-
tion, and who retail their revenues. I believe that when
the pressure of the tax falls upon that class it may be
pretty safely laid.down as a general rule that the last
retrenchment they make is in those matters which are
merely for the eye—which go to constitute outward ap-
pearance, and to give a tone and colour, and size to the
circumstances of the parties, and that the first retrench-
ment which they make is not, therefore, a retrench-
ment of their establishments. But, unfortunately, tho
first retrenchment which they make—if they do retrench
—is in those articles which put productive labour
into motion—it is in consumption, and by making that
retrenchment in consumption, even this class of
the community—l do not
,mean the uniriclustrious
classes, or the monied classes not engaged in trade
or manufactures—even this class of the community
which lives upon its income; even they, therefore,
diminish the fund, which formerly they used in giving
employment to productive labour, because they diminish
the amount of the articles they consume. But then
as to the other classes of the people, who are em-
ployed in the trade, or the manufacture, or the
agriculture of the country, I need not stop one moment to
remind your Lordships, that whatever is withdrawn from
the expenditure, is withdrawn from the fund out of which
the wages of labour are to be paid to the working
classes of the community. Every thousand pounds
then which is drawn from these persons—from the
farmers, from the manufacturers, and from the traders
of the country, and which is paid in the form of a tax,
every thousand pounds so paid is permanently withdrawn
and by so much, by that thousand pounds of necessity
is the fund lessened out of which the labour of the com-
munity is to be paid. There is this most material
difference between a tax upon income directly levied and
a tax levied upon consumable commodities, that the in-
come tax taken away is accompanied with no expendi-
ture which supports labour ; whereas a tax expended in
paying a duty upon consumable commodities,
at the same time that it puts something
in the Treasury, also puts, of necessity,
something out of the fund from which pro-
ductive labour is supplied. -So that the thousand pounds
that is taken by way of an income tax goes to support
any productive labour at all, whereas every one pound
of each thousand that is employed in the production
of consumable commodities, and that pays the custom
and excise duties, of necessity, creates an expenditure
of another thousand—perhaps of two or three thousand,
in supporting productive labour—in supporting the
trade, the agriculture, and the commerce of the country.
My Lords, it is impossible to approach the arguments
that have been used, both for and against this tax on in-
come, without being aware that very great mistakes
have prevailed on both sides—that there have been great
mistakes on the part of those who have supported the
tax ; and when I say great mistakes on the part
of those who have opposed it—l should rather say,
great_mistakes on the part of those who have no great
objection to be taxed, provided you will only let them
modify and mould it according to their own fancies
and speculations. It is also lately necessary to
keep quite clear of both these errors, and I will
begin with the last, in order to put it out of the way. It
is a. very common thing to hear men say, Oh I I have no
great objection to a tax of this sort—on the con-
trary, I think, under proper limitations it is not
a bad tax ; it has many advantages and fewer draw-
backs than any other, if levied in a proper mode.
If it is asked what that mode is to be, the answer is,
" Oh! let it be a property tax, and not an income tax.
If it only affects property, I do nut much care; let those
who have property look to that ; if it only comes
upon the land, and upon the funds, there is no
great harm done ; but don't let it come upon income.
Only upon land and the funds ! In reality, when
we come to examine a little more minutely into the
grounds for this predilection for a tax so constituted, by
those who thus argue, we find it is rather the funds than
the land which they have in their eye. They have
no objection to see a property tax levied, by means
of which a considerable sum may be raised from the
landholder—that is to say, at the expense of public
credit. My Lords, lam sorry to say that this predilec-
tion for a tax on the Funds, is not confined to persons
of no property at all ; I have heard it not seldom
argued for by those who have property. They may give
us a tax upon land and on the funds, and welcome, pro-
vided we leave no other tax. We may frequently find
men of landed property having so great a
desire to see a tax on the funds, that they were
ready to waive, or at least suspend their dislike to a
land and property tax, in order that they might
make sure of the other. But they were not the
only persons who 53 argued, and it sis more
strenuously defended, and more loudly proclaimed, by a
very great deal among those who would fain have
lands as well as . the funds included, but
whose enmity was directed most against the funds.
These men are utterly ignorant of the question they pro-
fess to treat. They are not only ignorant of all
justice of practice, and of all honour in public
dealings, but they are utterly and profoundly
ignorant of what the class consists upon
whom they would be for throwing the burden
of taxation, I remember, nine or ten years ago,
when myself and my Noble Friend opposite were m
office together, we had occasion to make an inquiry
as to the distribution of the dividends upon
public stock, and I remember we called for
a return of the stock warrants, that is the authority
upon which the dividends of the Public Funds are
paid quarterly. What was the result ? What
was the number of those warrants ? Why, no
less than 280,000, and many of those warrants
comprehennding hundreds and even thousands of persons
though they appeared as only single warrants being
paid to public companies, to the Bank of England, to dock
companies, and to assurance offices. These only went as
if they were paid to one receiver, when they were distri-
buted among hundreds and thousands, and if I say that
the number of licences is 300,000 I shall not
exaggerate the number by a single cipher.
Why the average is under 100/. a-year. There are
2.,:_0,000 under 50/. a-year. There are 600, and no more,
who receive 1,0001. a-year. Is that a tax upon the funds
alone—is that a tax on the holders of stock exclusively ?
If you throw a burden on them that you do not throw.
on the rest of the community it will not only be greatly
unjust and vastly dishonest—not only a robbery of the
public creditors, but it would be a harrassing of the
poorer part of the community ; it would be throwing the
burden of the taxation for the State on that class who were
not the best, but the least able, to bear these
burdens. But it said that property- should be taxed
and not income. That there is a great difference between
capital of every kind and income no person is more ready
to admit than I am. That is the bulk of the argument.
I am about to address to ..your Lordships, and forms
the ground work of my objection; but that income
should escape altogether—that capital should be sub-
jected to taxes, and not income, is one of the greatestab-
surdities in argument, and one of the grossest acts of
injustice, that any Government could be guilty of;
but, my Lords, it is said, that in order to make the tax
a fair and an equal one, you, ought to apply a
graduated scale of taxation ; that you ought not to
apply to incomes of every amount the same per centage.
That is a doctrine my Lords which has really seduced a
which was a verybe
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as consequences. My Lords, there is the_t fault in
the arguments of those who in regard to the question
ea n
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the most just of taxes, are equally open to
these objections; the first class assume that it
is in your power to make an equal tax, and the second
class assume that it would be just that the per
centage should rise in a scale proportionate
just proportion —in
to the income. My Lords, there never was a greater
have you any right to throw
mistake ; in the first place,
notege equal proportion
possessing moderate
the burden of the whole taxation of the country upon
persons who have large incomes ? Why should the tax
paidin
incomes. They pay a great deal less in proportion as
their incomes are less, and the others pay a greater sum
in proportion as their incomes are greater. Nothing
can be more just, nothing can be more fair than this ;
but this is not the . kind of justice—this is
p_roEyortpioenre—ebain
not the kind of fairness that is intended.
under the graduated scale. Taking the income tax at 10
per cent. that a man possessed of 1,000/. a-year, should
pay a tax of 1001. a-year, is just and fair, and that a man
with an income of 10,000/. a-year, sheuld pay 1,000/. to
the tax,' is also just and fair ; each man pays
in proportion to his income ; each man is
taxed according to his means, but that is not enough
to satisfy the advocates for a graduated scale. It is re-
ported that the proposed property tax is' to be three per