HOME RULE FINANCE.
rTo THE EDITOR OF TRH "SFECTATOR."1 SIE,—In your article on "Home Rule Finance" last -week there are some statements which are, I fear, misleading, as
well as omissions the supplying of which materially alters the aspect of the case you present. May I trespass on your space to make good this criticism ? You say
"the statement that Ireland was over-taxed rests on the fallacious assumption that a geographical area pays any taxes at all The taxes derived from Ireland are paid by individual Irish people, and at no period since the Act of Union has any Irishman ever been called upon to pay a higher tax than he would have paid if he had been living in England."
Now the statement that Ireland is over-taxed rests upon no such assumption ; it rests upon the indisputable doctrine that the taxable capacity of an individual depends upon (a) his income and (b) his cost of living. Other
considerations must also be borne in mind, but these are the two main factors in the problem. The report of the Commission on the financial relations between Great Britain and Ireland, 1893 (the Commissioners were leading financiers of the day), shows clearly that this is the proper way to estimate taxable capacity, and that upon such an estimation Ireland's taxable capacity did not then exceed one-twentieth of that of Great Britain—Sir R. Giffen, the eminent statistician, put it at about one-fortieth—whereas Ireland was actually paying in taxes one-eleventh. Since 1893 the proportion of the taxable capacities has altered, and is now about one-twenty- fifth, or, on Sir R. Giffen's basis, about one-fiftieth. The Commission also were of the opinion that the Act of Union imposed upon Ireland a task greater than she could bear. May I remind you further of the words of Mr. Pitt, spoken as far back as 1785: "If one country exceeded another in wealth, population, and established commerce, in a proportion of two to one, I am convinced that that country would be able to bear nearly ten times the burdens that the other would be equal to"? So that the fact which you truthfully point out, that Irishmen
are not penalized for their nationality,, is quite irrelevant to the question of over-taxation, and, I drink, misleading to the unwary reader.
In you• article you also quote the White Paper (H. of C.221, 1911) to show that "Ireland has involved on the average of three years a charge on Imperial revenues of £537,000 a year," i.e., instead of being a contributor to the Imperial Exchequer, she is a drain. You omitted to point out that this calculation in the hit Paper is based on the assumption that Ireland
only contributes what is known as the "true revenue," i.e., the actual revenue collected minus an amount calculated by the Treasury as being the surplus of Customs and Excise Duties on Irish goods consumed in England, Scotland, and Wales, over such duties on English, &c., goods consumed in Ireland. I have no quarrel with this principle, which rests on the under- standing that it is the consumer who pays the tax ; but that the method of calculation is hopelessly fallacious is obvious upon the most cursory inspection. The Treasury estimate for the amount of the duty upon tea paid and collected in Ireland is based on "proportions ascertained by inquiries as to quantities interchanged between Great Britain and Ireland in 1903-4," that on tobacco " from proportions ascertained for 1903-4 upon inquiries made of manufacturers and dealers," and so on for other articles. Mr. Sexton, a member of the Commission referred to, said, in 1896: " The Treasury estimate of what Ireland pays in virtue of her actual consumption is either founded on population simply, or on statistics obtained from carriers several years ago, and covering only a period of four months . . . . and it is evident that statistics for one period of four months applied to several years, conjectures founded on population, and processes shown to be liable to great error, cannot be relied upon in determining any issue of practical importance affected by the accurate gross amount of the annual revenue of Ireland." Lord Macdonnell, as recently as last February, said : "The highest Treasury authorities have admitted that in calculating what is called Ireland's estimated true revenue the Treasury has acted largely on guesswork ; their procedure is not based on any admitted principle, and was not adopted after public discussion. . . . In the beginning the Treasury deprecated the attachment of weight to these calculations. But the myth, like all myths, has grown with use, and now the White Paper, as it is called, which reproduces the myth year after year, is referred to in the House of Commons and outside, to the detriment of Ireland, as an authentic and authorita- tive document." This is the very White Paper to which you have referred in your article. The inaccuracy of the estimate is to Ireland's great disadvantage, and were the calculations made on a sound basis there is little doubt that Ireland, instead of costing £537,000 a year, would still be a paying concern for Great Britain. A paper by "Irishman" on the subject, published recently by M. H. Gill and Son, Limited, shows this most clearly.
There are several other statements in your article which, it seems to me, do not convey the whole truth ; but I can- not ask for your courtesy further than to allow me to remind your readers that almost every estimate connected with Irish finance has proved wide of the mark, from the time of the Protestant Parliament under Grattan (and Pitt) to the most recent example of "Castle" inaccuracy, the estimate of the cost of Irish Old Age Pensions.—I am, Sir, F. B. BENEY. 7 New Square, Lincoln's Inn.
[Our correspondent's criticism is wholly beside the mark. We are quite content, however, to abandon estimates and to stick to facts, and also to abandon his appeals to authority which leave us quite cold. Neither Pitt nor the Majority Report of the Financial Commission can alter the laws of arithmetic. If Ireland is unjustly taxed as compared with Great Britain then the people of Ireland must be unjustly taxed. But it is impossible to show an Irishman who pays taxes because he lives in Ireland which he would not pay if he lived in England or Scotland. On the other hand, men can be shown by the hundred thousand who pay taxes because they live in England and Scotland which they would not pay if they had the fiscal good fortune to live in Ireland. But if individual Irishmen are not unjustly taxed how can that aggregation of Irishmen which we call Ireland be unjustly taxed ? It is not because things are taxed by the Imperial Parliament which are only used in Ireland. For every spirit drinker in Ireland ten spirit drinkers can be shown in Great Britain. And beside Englishmen and Scotsmen paying taxes which Irishmen do not pay, and the Irishmen paying no taxes which we do not pay, Irish- men receive from the State things which Englishmen have to provide out of local rates. The allegation that Ireland is unjustly treated is a sham, a delusion, and a snare. It would be far easier to make out a case for the unjust taxation of Cornwall, Wiltshire, and Devonshire.—ED. Spectator.]
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