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

harm can result from raising it by loan with an
income tax for the payment of the interest on
the contrary, by no other mode can it be raised
with so much facility and at so little expence,
nor is there any other mode which so effectually
provides for an equal, sound, wholesome distri-
bution of the public wealth.
But is not our present distress to be traced in
part to th 6 ruinous system of public loans ? No;
but to the abandonment of this system. As long
as we continued to raise money in this manner,
we prospered ; but by leaving it off, we have
declined, as we shall show hereafter,
We have seen that a loan is a voluntary tax,
and then comes the distinguo, that whereas the
money raised by taxes on commodities must ne-
cessarily come out of the pockets of the lower
classes of the community, because they are the
great consumers ; so when money is raised by
loan, must it as necessarily come out of the
pockets of the rich : (by rich, I understand all
that has a surplus, however small, beyond what
is required for the necessaries and tohve-
nientes of life) ; and this is evident, because he
that can barely obtain the necessaries of life has
but small means, and still less inclination to sub.
scribe to a loan, or to purchase stock.
This is my exposition of the matter. Let us
now apply what has been said, and endeavour to
convert it to some useful purpose.
We have seen that the taxes at the end of the
war in 1814 amounted to 6,448,2741. less than
at the present period.
We have also seen that of the amount raised
by taxation ht 1814, the sum of 21,000,000/.
was the produce of direct taxes, and therefore
came out of the pockets of the rich ; whereas, of
the amount of taxation in 1828, only about
4,000,000/. was the produce of direct taxes.
And, finally, we have seen that in the two
wars with France, from 1793 to 1814, there was
t'aied by public loan the enormous sum of
506,927,129 i., being at the average rate of
about 24,000,0001. per annum ; and which sum
was expended in consumable commodities, in the
pay of soldiers and sailors, and in the wages of
every description of labour. Add this to the
21,000,000/. of direct taxes, and you will have
a sure of 45,000,0001., which was annually levied
on the rich, to be expended on the poor.
And then the conclusion from this is irre-
sistible, and it will follow that a war conducted
upon so large a scale, and under such a system
of finance, must necessarily be a period of pros-
perity to the lower classes of the community;
and that they could not by possibility feel the
pressure of taxation, because though commodi.
ties were taxed then as well as at present, ye
this was amply compensated by a large Govern.
went expenditure, the money to defray whicl
expenditure was extracted from the pockets o
the rich by means of public loans and direct
taxes.

But all this is altered now : the income tax is
abolished, the assessed taxes are reduced, and
though small sums are occasionally raised by
public loan, yet this is never done but from ne-
cessity, and the effect of it is nearly, if not wholly,
destroyed by the operations of the sinking fund.
And therefore we are not to wonder at the un-
equal distribution of property, at the altered con-
dition of the middle and lower classes of the
community, and the general distress of the
country ; because it plainly appears that a for-
mer large war expenditure is now converted into
an equivalent peace annuity ; and which annuity
is extracted from the pockets of the middle and
lower orders : and this in a great measure will
account for the present embarrassed state of the
country, and the so-much-complained-of unequal
distribution of property.
Things standing in this condition, what is the
remedy ? It is very simple : we must return to
our former system of loans, or income-tax, or
both. And this is just, for the capital to carry
on the war having been raised by this means, the
annuity which is now become the equivalent of
this capital ought to be raised in the same man-
ner, and therefore this is my proposition.
That we repeal the whole of the excise duties
on malt, beer, and hops, and the whole of the
customs' duty on sugar, and that we supply the
deficiency of revenue which will be thereby oc-
casioned, one half by a tax on all income derived
from funded and real property, and the remain-
ing half by public loans.
A very few years would be sufficient to deter-
mine what we had to expect from this change of
system. If it succeeds, this will be shown by
the increased produce of the remaining taxes ;
and, if I mistake not, we should also find it in
the increased number of small fundholders ; for
there would, I think, always be individuals who
would not increase their consumption of beer and
sugar in proportion to the reduction of price,
but who would convert this reduction of price
into a provision for the future.

As an increased produce of the remaining
taxes would be a sign that the system worked
well, and as by means of th;s increased produce
there would be a surplus revenue, we might
then determine whether we would reduce the
rate of the income-tax, or the amount of the an-
imal loan, or whether, changing nothing in
this respect, we would not, in proportion to
this surplus revenue, take off further taxes on
commodities. The last would be the best and
most consistent with reason, because, having
proofs that a reduction in the taxes on commo-
dities was productive of good effects, we might
be pretty certain that the farther we proceeded in
this reduction the greater would be the advan-
tage : but all this would be matter for future
consideration, and we must be guided by cir-
cumstances.

Now, to this plan, it will be objected, that an-
n►ually to raise money by loan is annually to add
to the national debt. Admitted ; but the taxes
on commodities are also paid annually : and
therefore, as no more would be taken in loan
than is remitted in tax, our condition in this
respect would be the same as before. But, in
reality, it would be much better; for all that is
raised, either by a loan or an income tax (except
the expense of collecting the latter, which is very
trifling), is paid into the Treasury : but this
cannot be said of money taxes on commodities,
where, independent of great charges of collec-
tion, a profit is also made on the tax ; and so
that, consequently, from 20 to 40 per cent.
(varying in amount, according to the rate of
profit, and the number of hands through which
the commodity passes before it reaches the con-
sumer,) more is levied on the consumers of
taxed commodities than find its way to the trea-
sury. And the reason of this is so plain that it
cannot be mistaken • it is this—that the capital
which pays the tax being of precisely the same
nature as the capital which is employed in the
production of the commodity, is and must be
entitled to the same profit.
But we want no argument where we have
plain matter of fact to guide us. The duty on
salt was 15s. per bushel, and when this duty
existed the price of salt in London was 20s. per
bushel ; but the duty being repealed, the price

of salt fell to 3s, per bushel ; and so that the
public gained the whole of the duty, and 2s.
per bushel beyond it.
And therefore, by substituting an income tax
and loans for money taxes on commodities, there
would not only be a great annual gain to the
community, but as the money raised by this
mode would come from a very different class of
persdlis, there would immediately ensue a much
more equal and judicious distribution of pro-
perty ; and this above all others is the object
which we should endeavour to accomplish ; and
whether this be done by an income tax or by
loans, or by 'coupling the two modes together, is
to 'me a matter of indifference ; and I would
merely premise, that wherever large sums are or
have been raised by public loan, it is necessary
that there should be an income tax, as otherwise
the interest on the loans must be provided for
by taxes on commodities, and then, as a final
result, the rich will merely have purchased an
annuity of the poor ; et grand bien leur fasse.
This is what I have to say ; and though there
may be (and I believe there are) other causes of
our distress, and which it may or may not be in
our power to remove, yet this which I have
pointed out is very considerable ; and as it clearly
admits of a remedy, it is the first which ought to
be taken into consideration. HERMES.

PMCES OF STOCKS TH V
Hank :itock
3 per Cent. lied.
3 per Cent. Cons. 88A .Y.i
3!4 per Cent. -
Ditt 1 Refl. shut
I par Cent. lO27'S ')'s Sit
Ditto, 1k26
Ditto Scrip -
Rink L. Ann.
India Stock 222
Ditto Bonds 6l 62'pm.