The Sun.
London, England, 1829-09-11 00:00:00

money had been raised be a tax, shall he indem-
nified by him who has either subscribed nothing,
or less than his quota would have amounted to if
the money had been raised by a tax. And to
say that this is injurious to the community, is to
say that no man ought to be allowed to lend
money at interest to another, when the purposes
to which the money is to be applied is the pay-
ment of a tax imposed by the Government.
Now that I reason right in this particular,
may, I think, be proved without much difficulty.
For let A have an income of 1,0001. per annum,
and B also have an income of 1,0001. per
annum, and then let there be an income tax
imposed of 10 per cent., the quota of A to this
tax will be 1001., and the quota of B will also
be 100/.
Then let A (finding an opportunity to em-
ploy his capital in an advantageous manner) bor-
row 1001. (his quota of the tax) of B at 4 per
cent. interest, and then it is clear that B will
have paid the income tax of A, and the whole

!natter will stand in this way--that B will have

parted with a capital of 1001., for which lie will
receive an annuity of 4/. as an equivalent, and
A will retain a capital of 1001., which he must
Otherwise have parted with, and for the use of
which capital he will pay 41. per annum to B.
Let the Government now resolve to raise the
money it requires by loan at 4 per cent. interest,
and impose an income tax for the payment of the
interest; and then A being in the receipt of
1,0001. per annum, and B being also in the re-
ceipt of 1,000/. per annum, the quota of each to
this income tax will be 41. per annum. I say'
this will be the quota of A and B, because 1007.

per annum being the quota of each if the money
had been raised as in the first case by an income
tax alone, and this money being now raised by
loan at 4 per cent. interest, and a small income
tax being imposed for the payment of this in-
terest; the quota of A and B must be accord-
ing to the rate of interest on the sum borrowed,
and this being 4 per cant., the quota of each
must consequently be 4/. per annum.

Now let A and B each subscribe 1001. to the
loan, and they will be in precisely the same si-
tuation as if the money had been taken from

them as in the first case by an income tax alone;
because though they will each be taxed to the
extent of 4/. per annum, yet precisely this sum
will be returned to them in dividend. And here

take this observation, that nothing can be an
evil in finance against which a man may guard
himself; and that he may Protect himself here
is evident, for he has merely to subscribe that
sum to a loan (or to purchase stock) which
would have been exacted from him if the money
had been raised by a tax; and as in that case,
the tax which he pays on the one hand, and the
dividend which he receives un the other, will be

of equal amount, whether the money be raised
by tax or by loan is (or ought to be) to him a
matter of indifference. And yet shall he jump

. .. .
at the loan, but growl most confoundedly if the
same money be exacted from him by a tax. And
this shows the benefit of allowing the people to

assess themselves, and to be their own tax-ga-
therers; and this is done when money is raised

by loan.
Now let B subscribe 2001. to the loaii, and
A nothing ; and then B will pay 4/. per annum
in tax, and receive Si. per annum in dividend,
and A will pay 4/. per annum in tax, and re-
ceive nothing. And this is just, for B, having
subscribed 200/. to the loan, while his quota, if
the money had been raised by a tax, was only
1001., and A having subscribed nothing, while
his quota, if the money had been raised by a tax,
was also 10W., it is plain that A must indem-
nify B ; and the position of things will be this
—that B parts with a capital in the purchase of
an annuity, mnd that A pays an annuity in order
to retain a capital. And this is precisely the
state of things which obtained, when the money
ssuopmpoofseldooßLtboeilleiondthAe
glooootaLoaft
A 4
was raised by an income tax alone, and when we
tax. ptoertieleenitn.c,otinhies

Take now the last case, and then let B sub-
scribe 1501. to the loan, and A 50/., and then
B will pay 41. per annum in tax, and receive 61.
per annum in dividend, and A will pay 41. per
annum in tax, and receive 21. per annum in di-
vidend ; and as all our preceding observations
apply equally to this case, it is quite useless to
repeat them.
And now, having considered the whole mat-
ter, it is plain to me, that whether :money be
raised by an income tax alone, or by loan, with
an income tax for the payment of the interest,
must in the end come to the same thing ; and
that to raise any given sum annually during a
certain number of years, it will be necessary in
both cases that the country should have precisely
the same wealth and resources. And then, as
far as regards the mode of raising money by loan,
this in sum is the position of things :
He that subscribes that sum to a loan which
would have been his quota if the money had
been raised by a tax, receives just as much in
dividend as he pays in tax ; and to him it is all
a case, whether there is or is not a national debt.
He that subscribes less to a loan than his
quota would have amounted to if the money had
been raised by a tax, pays more in tax than he
receives in dividend ; but for this lie is indem-
nified by retaining a capital which he may apply
to other purposes.

. .
He that subscribes nothing to a loan, pays an
annual tax which is equal to the interest on that
sum which would have been his quota, if the
money, instead of being raised by loan, had been
raised by taxes ; and for this he is indemnified
by retaining a capital which he may apply to
other purposes.
And, finally, he that subscribes more to a loan
than his quota would have amounted to if the
money had been raised by a tax, receives more in
dividend than he pays in tax ; and it is this man
alone which in the strict sense of the word is a
fundholder ; and therefore a fundholder is one,
who, when money was required for the service of
the state, subscribed more to a loan than his
quota would have amounted to if the money had
been raised by an income tax, and in considera-
tion of this he receives an annuity which must
rlieatsrg e sums of money which
be paid by others ; and that he should be placed
in this situation, not by subscribing to a loan but
by the purchase of stock, or by the- bequest or
devise of stock subsequent to the loan, makes no
manner of difference, because in that case he only
purchases orpi is
sctuthcti csolevvdthshaatt ot
iitsth
ceiasrlliegtdillietasrioei
national
toirecord
1 others.aol
r debtevi-
dence
voluntarily and free of expence by the
(which is the result of successive loans), my defi-
renvsieeldveos,natti:lle have been
which
people moneyby
the
usual
saus a
lb
ae
le;
fnuirtiiWloinsihtooehfdf
hpeaodpbleeetill'el
spent by the Government. But if this money
ordinary mode of taxation, it would also have
been spent ; and therefore the evil.(if any). is,
that the Government should spend money; but
when money is absolutely required for the ser-
vice of the state, it is quite impossible that any