TAXATION STORM GATHERING IN THE NORTH. WHEN Mr. Bright is
asked whether he will vote against the re- imposition of " the hateful and intolerable Income-tax," he answers that the House of Commons is a very bad House of Com- mons ; that it does not check extravagance, but consists of men whose families are tax-consumers rather than tax-payers ; that it encourages the growth of our public expenditure in all depart- ments, imposes taxes upon labour rather than property, and thus makes the poor pay for the benefit of the rich. But, says Mr. Bright helplessly, " what can I do," except protest and denounce ? This is one word for Mr. Brierley, or a fraction of a word, and two for Mr. Bright's Reform Bill. Let us, however, keep the two questions entirely distinct. The Reform Bill is far too difficult a
• subject to be confused by mixirg it up with complicated questions of figures, and we shall better get over the real impediments to the passing of a bill, with the prejudices against a popular fran- chise among many respectable but influential persons, if we do not hamper the argument by entangling it with intricate refer- ences to taxation, especially when those intricacies run into very doubtful assertions. The Spectator has never shirked the ques- tion of a Reform Bill. We venture to say that no one of our contemporaries has been more explicit, positive, and practical in the statement of its own principles and of the course which it should pursue than our own, and we shall always be found sus- taining the same principles when the discussion can really be promoted. But let us defer it until that day, and for the time consider those statements which are passing current on the au- thority of Mr. Bright, and which we believe calculated to mislead the public.
First, let us examine an immense fallacy which stands at the very threshold of the debate. In common with many other per- sons who have bestowed more attention on the subject than he has yet done, Mr. Bright supports the assertion that, in its corrupt in- terest and indifferency to the public welfare, the House of Com- mons imposes the taxes mainly upon the rich, and makes the poor pay. The facts which he advances in support of this statement are few. They are—that a legacy-duty was levied on personal property alone, land and freehold property being exempt ; that the succession-tax, imposed tardily, has only realized 800,0001. in- stead of 2,000,000/. ; and that out of 65,000,000/. of taxes raised in 1858, 42,000,0001. was levied under Customs and Excise alone, not 10,000,0001. being taxes to "affect only the visible property of the country." These are scanty facts, and they do not make out the premiss. It is true that the legacy-duty was somewhat unfair, but
Mr. Bright neglects to state that the tax was modified so as to make it light in proportion to the nearness of the succession. In other words, it is a tax upon windfalls rather than upon suc- cession. If the succession-duty has produced less than the esti- mate, it is because the property passing by succession has been less than the calculation, and the proposal of the tax was always met by that argument—That the marketable value of succession had been invariably over-rated. Mr. Bright's present position is equivalent to making it a complaint that his opponents were right in their estimate of the exaggeration on his side. It is as if he said—" I calculated upon two millions ; you told me I should not realize half that amount, and see what malignant people you rich are—your property is not worth half what I took it for :" so deceiving are the rich !
It must not be forgotten, commonplace as the argument is, that an immense number of .persons are dependent upon the landed property of the country, just as an immense number of non-pro- ducing persons are dependent upon the earnings of commercial men, and even labouring men. For a good three-fourths or four- fifths of the community live by the charge of the other fraction, whether we look to the aristocracy or the " mobocracy." Yet your popularity men speak of "idlers," as if they were to be found only amongst the other classes ; or as if doing nothing to be paid for in money really constituted moral idleness. But it is the grossest of all fallacies to represent that because three-fourths of the revenue is raised by Customs and Excise, therefore the bulk of it is paid by that portion of the population which has no property. but its labour, and no income but its wages. The vast majority of the people only pays indirectly any great proportion upon taxed commodities. What is it that the poor labouring man consumes ? His diet, at the best, is bread, and meat, and vegetables ; articles absolutely untaxed. Nay more,—far cheaper in this country than in other countries whose taxes are lighter. His clothing is cotton or woollen, with a mo- dicum of leather and felt; also articles untaxed, or only very lightly taxed. He may take his beer,—taxed so lightly that the impost does not check consumption ; for the moment the tax was raised to a height which had ihat effect, it was lowered again. He may also smoke his tobacco, an article which is taxed ; and if Mr. Bright were to tell us that the charge on to- bacco is disproportionately heavy, he would find immense num- bers to aid him in moving for the reduction of the impost. Men gain nothing by exaggerating the facts on which they rely, or drawing undue inferences from a few scanty data. The whole tendency of Mr. Bright's argument is to show, that disagreeable as the Income-tax is, " intolerable" and needing amendment, still the indirect taxes are more unjust in their incidence, and less ceconomical than .those which are direct. Others dthe school to which Mr. Bright belongs have been more explicit in the same argument. A " movement " is going for- ward in the North of England, to diminish the amount of in- direct taxation, and to increase the amount of the direct. Now against any such " reform" we have for years past uttered our protest ; and we repeat it the more emphatically, because there does appear some chance that men possessing the authority of Mr. Bright may obtain a hearing, may be supposed by those upper classes whom they attack to speak in the interests of the " lower" classes, and may thus, by some strange hocus peons of Parliamentary accident, really carry a measure which would be injurious to the financial interests of the country, most mis- chievous, vexatious, " hateful and intolerable" to the classes in whose name they profess to speak. Mr. Bright may tell us that if the industrious classes do not directly consume articles which are charged with taxes,—if their clothing and their food are made with commodities exempt or lightly taxed, still they contribute towards the taxes which are paid by the timber-merchant who makes their houses, the mer- chant who pays their wages and reduces those wages accordingly, and in many other ways. But if one portion of the community is thus made to pay the taxes assessed upon another, the rule holds good all round. The fact is, that wheresoever the taxes are imposed, they are, in a community so actively engaged in ex- changes of every kind, paid with something like an equal percent- age by the entire body of the producing and paying classes, what- ever their incomes may be. If a man draws 5000/. a year from land, however he spends that money, he or his dependents buy taxed commodities, and pay the relative proportion of their in- come to the State. If he is a merchant, the process is perhaps more speedily accomplished. If he is a professional man, earning his 500/., the corresponding ratio reaches the Exchequer ; and if he is a labouring man earning his 501., the percentage of that smaller sum goes the same road. In a similar manner those who pay the direct taxes are indirectly reimbursed : the Assessed taxes, the Stamp taxes, the Income-tax itself, are thus all equa- lized by the exchanges of the community. There is, however, a grand difference between the various kinds of tax. It consists not in their being direct or indirect, but in two circumstances attending their levy rather than their assess- ment. We set aside the inquisitorial character of the Income- tax, as beside the purely financial question ; although whatever is inquisitorial will be evaded, and will involve a greater charge in its levy than the estimated return would warrant. The two circumstances which mark great inconvenience in the incidence or levy of a direct tax are these.-1. Its collection in sums of con- siderable amount from those classes whose means are very re- stricted, but who have a difficulty in meeting heavy demands at a particular point of time. 2. Its constituting a large per- centage drawn from the sum upon which each special tax is as- sessed. There are two inconveniences from this latter circum- stance if a given sum is passing from hand to hand,—there is a greater inconvenience in setting apart a large percentage for the Chancellor of the Exchequer than a small percentage ; but secondly,—and this is the more important inconvenieuce,—the imposition of a large percentage on one particular class of transac- tions operates as an impediment to the engaging in those transac- tions, and thus disturbs the natural course of trade. In other respects there is small ultimate distinction between the levy of taxes directly or indirectly. The professed object of the Income-tax is to obtain a certain percentage from the several sections of the people proportionate to their means ; but since the Income-tax does this in a very partial degree, and the general body of taxation already does it more or less accurately by another process, the Income-tax constitutes really a disturbance in the apportionment of taxation to means. Independently of its inquisitorial character, therefore, it tends to frustrate the very object which it professes to have. That object may be attained either by imposing the tax upon the income of the tax -payer, or upon his expenditure. If you try to do it par- tially both ways, you confuse the result. Opinion is decidedly against the Income-tax. The expenditure-tax, therefore, is the better plan. These considerations point, not to an increase of our direct, but to a better adjustment of our indirect taxes. - We do not for an instant dispute the position that immense sums might be saved to the country by the more accurate supervision of expenditure,— and of work done under the public departments ; but when Mr. Bright and his coadjutors ascribe the defects of our system to corrupt and mean motives, they assert what each man knows to be untrue in his own instance ; and thus a strong ease is vitiated by overstatements which provoke refutation and mistrust. We do not retaliate by imputing to Mr. Bright reckless indifference to truth or motives of personal ambition, for the simple reason that we disbelieve in any such imputations. Usually men are governed by better motives than they have credit for, sometimes better than they claim credit for, and no one can have witnessed John Bright's career, without seeing that he is stirred by generous im- pulses to which he does scanty justice when he puts ungenerous constructions upon other men. But before he can be accepted as a financial leader, he must be more accurate, explicit, and copious in his financial facts. At all events, those who might stand in Parliamentary terror of the great speaker, may remember that they need be afraid of no man who does not come with facts in his hand.
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