The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1866-03-28
THE INCOME TAX.
Letter from Professor. Goodwin Smith.

The Albany Argus publishes a letter from
Professor Goldwin Smith, OF Oxford University,
England, addressed to the Hon. j. V, l.. Pruyn,
of Albany, in reference to the policy of taxing
incomes. Professor Smith, after recounting
the adoption OF the tax for the first time by Mr..
Pitt, in 1907, says:-
It's renewal by successive Chancellors of the Ex-
chequer 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 emergency of the kUssian war, when the
tax was temporarily increased. But the main in
ducement has been the dangerous facility of the
fiscal engine, by means of which the Minister who
has it IN his hand is able, at any time. by single
turn of the screw to produce an additional revenue
OF large and certain amount, and thus to keep up
the war expenditure in time OF peace, to which our
Goyernment or rather governing class, is SO incor.
Ihe tax has been opposed throughout its exist.
ence mainly on three grounds:-
First. The unfarness of its pressure on the differ
ent descriptions of Incomes those arising from labor
and those not arising from labor the certain and the
precarous, to lemedy which various attempts at dis
elimination have been made, but without success,
that the evil may be regarded as at once great and
incurable.
trary power almost inevitably given to the Exche-
Third. Its demoralizng tendency, at least when
there is no great national emergency TO stimulate
the patriotism of the taxpayer, and induce him from
O sense of honor to make true returns. Notable in
most respectable class OF citizens, are given IN the
historical sketch Probably false returns to the in
IN many traders downward path to mercantile
dishonor. Nobody has admitted this more explicitly
than Mr. Gladstone, though he has been to SO great
an extent responsible for the continuance of the tax
There another objection to the tax, arising from
q sociastic tendency, as tax imposed expressly
on'the rich, and capable OF indefinite increase and
class graduation, which is less felt in the country
where the rich are the possessors of political power
| but which, ii 1 rightly remember a conversation
man. was greatly felt in certain cantons of SWtzer.
| land, where principles bordering on socialism at
mt lima nrev
The tax is attractive to our Finance Minister, as
imagine, not only from its facility and certainty a
of revenue, but for the reiei which it affords
him from the necesstv of deciding between the con-
lcting claims of different great interests, aRricul-
tura and commercial, ia the distribution Of fiscal
| burdens. This advantage, however, would equally
belong to any imparta system of taxation, such as
that Of Mhich IL can presume TO Gadl myself an ad
tax on all realized property, combined with stamp
tax and an equal ad vatorena duty on all imports.
OF course confne myself to the subject of the
English income tax, without touching on the Amer-
can question. But perhaps may, without pre-
sumption, mention one or two points affecting in
different ways the applicability ofour experience to
| the case of your nati0n:-
First. The socialisuc tendency, which is here KEEP
in check by the political power of the income tax
paying class will perhaps in your case be equally kept
| in check by diforent influence, viz: by the
| absence of any sharp class divisions among your
people, the more papable identity of interest, and
] the greater expectation felt by the poor man OF
| being himself one day numbered with the rich.
| Second. We live under the system OF free trade
you under that of protection. will not enter into
the vexed and, fear, acrimonious Questions as to
the general merits of the two systems but 1t is Of
course, manifest that free trade, by encouraging the
importa ton OF articles on which duties can be
| levied is the best for the customs revenue; and,
therefore, the necessity for direct taxation may not
be so great in our country as in yours
| Third On the other hand much of the income pay
ing the tax here is hereditary at least belongs to
persons not engaged in any industry or trade the
curtailment of whose expenditure, especially when
1t is devoted to the maintenance of great domestic
establishments though It is an evil, and il carried
beyond due limits injustice to the persons them
selves, does not interfere with the production of
| wealth by the community whereas, in America the
great incomes generally the prizes OF industry,
which cannot be rendered insecure without injuring
itself and the leading shoots of commerce, which
cannot De Topped without stuntipg the growth of the
| whole tree.