The Liverpool Standard and General Commercial Advertiser.
Liverpool, Merseyside, England, 1853-02-08 00:00:00

IWHATEVER may be the particular views of the

THE INCOME-TAX.

new CHANCELLOR of the EXCHEQUER on the

vexed question of the Income-Tax, the subject must,

perforce, occupy his attention, from the simple fact
that the present Act will expire in April next, and
the necessities of the Treasury imperatively demand
its renewal in some shape, or a substitution for it.
Notwithstanding that this impost has now been
borne for ten years, every succeeding year has in-
creased the objections to it, on the ground of its
inequality, its injustice, and the evils inseparable
from a system of direct taxation. The objectors,
however, have generally confined their attention to
details, and numerous have been the suggestions
for rendering its pressure more equal, as though it
must necessarily forma permanent source of national
income; but they have left out of sight the strongest
objection, which is to its continuance in any shape.
When first proposed by the late Sir ROBERT PEEL,
it was distinctly asserted to be a mere temporary
expedient, in order to provide against a temporary
deficiency of Revenue, and five years was suggested
as its probable duration. It has now been sub-
mitted to for double that period, and yet, instead of
agitating or boldly demanding its repeal, men talk
and write of its permanent infliction as an inevitable
necessity. It may be, and is urged, that the CHAN-
CELLOR Ot, THE EXCHEQUER cannot spare so
large an item in the Treasury receipts ; but this
necessity has solely been created by constantly de-
voting any accruing surplus to the relief from indi-
rect taxes, in preference to that which all admit to
be The most grinding and oppressive of any. Even
now, when the surplus exceeds two millions, if the
Income-tax were reduced one-half, and, at the same
time, extended to 11 much lower limit--say E 643
a-year, as was the case with the tax which ceased
in 1316—a step would be gained towards its ulti-
mate abolition :; and what is more, it would press
with far less injustice on the tax-paying class.
During last year, a Committee of the 'Reuse of
Commons investigated the subject, and .examined
numerous witnesses as to the evils of the system,
but their attention appears to have been confined
to thedistinetion between precarious Incomes and
those derived from realised property, without turn-
ing-a thought towards the 'only iffiCient remedy of
abolishing the tax altogether. A measure, which
if -mit practicable at once for "financial reasons,
might 'have been partially accomplished, by redu-
cing the rate from sevenpence 'to 'fourpence in the
%pound, with a prospect-of diminishing it still further
as the Exchequer was able lo'bear the loss of it.
Such a remedy woulil have 'clit the Gordian knot
of difficulties which seems to-surround the question,
have alleviated the 'injustice which all admit to be
now inflicted, and reserved for the time of need a
sozarce of revenue Tallith Should only be resorted to
in case of necessity.

An able political.writer in tElackwood's Magazine
'of this month has-entered into an elaborate exami-
nation of the details of • thisfquestion, which, from
the necessity Of its.being-soon brought under dis-
cussion in Pailiament, is of more than ordinary
interest. Unfortimately,'however, he assumes the
continuance cf the tax to be a financial destiny
which has become inevitable, and his arguments are
based upon this assumption. Keeping this inwiew,
he reasons 'most fairly, that a distinction should -be
preserved between those evils which are inherent in
the very nature of any' Income-tax, and those inci-
dental defects arising out of the specific system of
our present-statute, Whi6l-. are more or less capable
of being alleviated or removed. These evils he
classifies ac exemptions; the facilities of evasion; and
the inequalities of the-tax.

In his ikjection to the'first stated evil we-readily
concur, 28' no tangible- reason has yet been shown
why the limit of taxation should be placed at
except that dangerous principle,—which, no doubt,
actuated the author of 'the measure—of lessening
the nennber of objectors. It was the fear of the
lower, and, therefore, The more nurnerous,..blass of
the £l( householders, in zthe towns whichindueed
the shifting of the burden from their shoulders to
the class above them. 'PITT, with more'iustice,
and infinitely more moral courage, placed thelimit
as low .as-L6O a•year on uncertain incomes, :and
subsequently as low a-5..:150, while there .was no
exception on income from realised property. •-Tad
the same,plan been pursued, not less than a Million
persons would have been subject to it; btit-the
PEEL policy was to buy off the opposition,:and,
therefore, only 340,000 persons now pay the tax,
leaving ,660,000 persons exempt, who wouldhave
been chargeable under Mr..:PITT'S Act. This•is
crying injustice, which no argument can palliate,
and is a -proof of the mischief of that pres-sureirom
without which was perpetuated by the Reform Act.
As the writer in Blackwood has well observed, it.is
the first and most essential .general rule of every
equitable system of direct or compulsory taxation,
that its operation should be ,unversal; but the pre-
sent system is a direct robbery of those possessing
incomes above:1:15o, in order to save those whose
incomes are below that amount from any payment
whatever, although each derives the same relative
share of the advantages of civil,government. ft is

admitted, however, that so long as such a tax is
necessary there should he some limit of exemption,
and, as the amount assumed by Mr. PITT was
above the limit ,ofl/os. a-week, which was supposed
to be required foractual necessaries,,there is nothing
in present circumstances which renders such a
standard otherwise than a fair and ,a liberal one.
-Nor is such a system -.without example elsewhere,

for in the United States..e.xeroptioa is unknown, and
in Prussia, Bavaria,-Saxony, and Auskia, the limit

of exemption is vcry.low.
!The second evil or the facilities of evasion is shown
in the immense proportion of surcharges for, deficient
and Asent returns, when. compared with any other

source of taxation. In allusion to this subject the
—e have referred to saya

writer

" Amang the witnesses who appeared before the com-
mittee in the spring of last year, was a certain Mr.
JEFFERY, Araper of Liverpoel„who qlad been delegated by
the Financial Reform Association of that city to expound
their views as to finance in general, ,and the Income. 'ax
in particular. In the course of his examination, he states
it as his opinion, that if the tax were fairly adjusted„a
false return would be a very rare thing iudeed. On being
asked what induces him to think so ;? he replier, with a:
naive simplicity, which must have been quite refreshing to
the committee in the midst of their disagmeable labours,
" Because, when a man feels that he is fairly taxed, I
believe it has been/found lie does not object to it." So
charming a piece of innocence occurring in the midst of
the most startling revelations of systematic fraud on the
revenue, looks as oddly out of place as a verse of Watts'
Hymns in the Nentg4te Calendar. If there i3e au truth
whatever in the worthy draper's charitable aphorism, the
income-tax must be the unfairest under the AM ; for
sever, surely, has such a mass of evasion and deceit been
exposed to the public as in the volumes before us."

He subsequently points to various modes of eva-
sion and direct frauds which have been practised,
and suggests several remedies for obviating this
manifest evil. These are, that the Commissioners
should have authority to order the production of
books, in order to verify the statements of profits
in trade ; that they should require an oath to all
claims of exemption; that the returns under sche-
dule D should exhibit the gross amount of profits,
and the deductions be claimed ; that the profits of
every business should be returned in the division
where it is carried on ; and that employers should
make a return of all salaries paid by them. Such a
mode of remedying the evil complained of would
but increase the oppressive and inquisitorial nature
of the burden ; but if it should have the effect of
augmenting the opposition to the tax itself, it might
so far prove beneficial, and, as in the case of Mr.
DISRAELI'S proposal to double and extend the
House-tax, open the eyes of the Free-traders to the
evils of direct ttwcgiuu, which they so loudly ap.