, 1866-03-27
=; NODES OF TAXATION.
History Of the English Income
Tax.

MVDEAJ VE AAAAAAAOAs
History Of the English Income
Tax.
Letter from Professor G0ldWyn Snalihs
oEOxfurd, to Hon. ]. 2. L. Pruyn.
oxsouu. Jan. edss 1855.
Hon. JoHy '. l. PRu1N: .
Dear Sr:-My work last term left me no
leisure to look into the history Of tho Income
Tax, and verify the views which bad pro-
pounded In, the conversation to which your
when was Unexpectedly, but unavoidably
called away from Oxford 10 place out Of the
way OF political books and Information.
Ny ffaend, 31r. c. A. Roberts, Of ali Souls
College, was, however, kind enough to asslst
me BY looking into some points which men
hands the brief sketch OF the history Of the
Tax, which send herewith, and IN which
references are made to more extensive Sources
Of information.
Ton viii find. believe, that the sketch In
the main, corresponds with the account Of
the matter which gaze you in our consersa-
ton. -.
The tax was first reso1ted to By 3fr. Pitt,
In 17y7, the most disastrous period Of our
war with the French Republic. in order to
meet the ex!geocses Of. that great national
emergency without recourse to the constant
loans which were subyersive Of public credit.
It was rcmitted ut the short Pence OF Amlen5,
aud re-enfueeed upon the renewal Of tho war,
but considered BY Us, as war measure. to
terminate immediately On the conclusion Of q
treaty Of peace, An attempt OF the Govern
mrnt to retain 1t AFTER the Termination Of thu
war was defeated, and, IN the words ot Afs.
.Wilberdorce. the principle that Of 'waz and
tr,or frY< trorfa 1t.a3 foI3 fhoHB
The tax Was not again imposed until 1si2,
when Sir r. Peel, who had recently coua into
power, rcsorted to 1t to meet special emer-
geney, not OF q military, hut OF financial
kind, viz. the large deficit caused by the
financial miscarEisges Of his predecessors In
that deficit on public credit. He at the same
time wtshed to make what Wns then D great
md somewhat pezi1ous experiment, viz: The
reduction Of Import duties IN the hope that
| countervail to the revenue the reduction of
| the duty, and he used the Income Tax to
| show up, as it were, the fiscal system, while
| the experiment Was being made. The tax was
limited to q stated period, and ayowedly re-
| gnfded by tta author as an extraordinary
| measure, adopted TO meet q great emergency
| and facilitate practical experiment.
Ite renewal BY successive Chanccllors Of the
E1chequer, since that time has been partly
| justified by the fiscal experiment commenced
/ by Sir Robert Peel. VIZ: The reduction OF
duties In the hope Of relieving the consumer
without loss to the revenue, and by the emcr-
y, .ns ;-n-easn,, h. W. .ne ~
nea,;t haa hsen th. dsroerons fan3iitv Ii ~ IL
dscsi a1,1;ns. ~ n,asn5 -, .sb;ch ~ I;n;s.
1 ter, who has had 1t in hand, Is able, at any
time, by sinxte turn Of the scraw to pro
duce IN additional fryeuue of a large and GER
1;t-,ea T.; +;-sa ~ ,ess. - ut,ah ~
p,onnt ~ rth.r n;.e err,,arJ;n1. a,ses 10 ~
insnrI;,,;h1r y. a1d1cteJ ~ sV's e1'7' - 81
Thc fn1 hes I,een nnnosad thro1,bort ;ta
e1istenessmainiy on three grounds:
,:Mnl ny aatIn nIanns = ~ 911satts NV W sns
aaItot 49, ~ ~. .a9se 9e.s - = -
ing from labor anu those not afising ttom u.
~, ne ceItal1 arg tne p.sca9ss " To- sSnGuy
WINCH 4@slous atesnHss ~ nseetotuatua u ~ {.
have 9sen MADE. out wlihont = saccess, 80 tna. ,
the erii mag be regarded lat once great and
| ancnSanie: n
| ~ lis nauislsof1at character, ana me A.
b1frnry power almost inevitably given to the
exGhe9ue5 in assessing 1t.
~ its demosailz!ns Is tendency. a. least When @
there y no great national emergency to sttm-
ulate the patriotism Of the taxpayer, and n
| duce him, from sense OF honor. to make
| true returns; Notable instances Of th4s ten
dency, even 10 the case o. our most fespectac
BILE class OF citizens, are gren In the historical
| sketch Probably false returns to the income
taI have been the casy and seductive trst
step In many traders downward path to
mercantile dlshonor. Nobody has admitted
this more explicitly than ttr. Gladstone,
though he has been to 50 great IN extent re-
| spoudble for the continuance of the tax+
| There Is another objection to the tax, aris~
ing from sociallstic tendency, as tax i'm
indefinite Increase and c|ass graduation,
| which Is less felt IN the country where the
rich are pos5essoEs Of political power, but
which, II rightly remember conversation
which had many years ago With Swiss
gentleman, was greatly felt In certain
bordering on soctatsm at that time pre-
vailed.
| The taI Is attfactive TO our FINANCE Minis
ter. as Imagine, not only from tts tacfhty
and certainty a. source o. revenue, nat lot
Inc relei Wnicn u a4oIos nm Itom tae ne
cessity OF decialng between tne eonnlcting
CLAIMS O. dlaeIens g1fat Id inte!gstal agIlsua =,
ni aha s Tisa oa.aStses - .uS wsaas -.
ISL a,t, a,aI1x .1cass ~ sa ~" ss
wv muu.I I14 ua.;on oe sna ~ H. ~ nhisi y
ssn " aasaeaaas - IIsn ii t.@s =. "Aasas
su ~, ~ ~, az adrocstaa., .e,,ai ~ ~
aoi,aaa a ~ a.urart1 oan,,;raI LII ~ " =
~ sa P.opsYjs soeu nineaee 49, 49, ~ :.
w nnpos, w on+s. co,fn n,rss,e ~ ths.snb,act -,
iah ~ Iittont " ~ tnnnSn y,
the a1Sclican omeSs,on ~ nsrhona ~ ~
withnmt nresnmnt;on ,nertf6,, nre ~ ~ ~
nofnts offecfmo~ II vnTlons w"vs. fhe .nnlica.
hi,itv NJ mr. e7nericnce tn the eass .of vnnr
nation. ~'' '0"1
Tha encsa}1st;c tendencv. which ia hem
kent IN checE h. The poIitisa1 paTer % ! Of % ths
,ncor,e tax nay;1p ciasse viii rerkens in vonr
ca.e ~ eonalIy Ecnt IN cbecf hv different
;ni1,snre W. bT fI,p ahssnre n anv sharn
c5ass diY}sious sraonr yoar peop!e. tie uo,c
pal1able identity Of interest, and The greater