THE DEBATE ON GRADUATION. T HERE is very little instruction and
no satisfaction to be got out of the debate on the Budget. The very speaking is not good. What are we to say to a Radical Chancellor of the Exchequer who, when introducing a democratic Budget, says as an argument for its most demo- cratic detail that it is a recurrence to the feudal method of taxation ? The Crown, on the decease of a medimval noble, used to take his estate, deduct a slice of it, and reinvest his heir with the remainder. Suppose it did, what is that to a modern economist ? The Crown at that period was always doing oppressive things, and the precedent is of no more value than if it had occurred before the Christian era. Is the Chancellor of the Exchequer going to claim the right of marrying any heiress to any gentleman he may please to favour ? The precedents for that are at least as clear as the precedents he quoted for his Estate-duty ; indeed, more clear, for if we mistake not, the Crown took its fine at death not on the ground of any right to tax, but on the ground that the estate belonged to the King, and was assigned for life only to the possessor, the institution of his son being matter of pure grace,—a principle given up at the Revolution. Or what are we to say to Mr. Courtney's argument that a very rich man ought to pay more Income-tax, but did not, and therefore at his death owed a debt to the Crown ? How much debt, Mr. Courtney ? Clearly the annual shortage multiplied by the years of enjoyment, which might vary from one to a hundred, so that an Estate- duty ought to vary with the last possessor's length of life. Grant that the wanting tax ought to be paid, though we cannot in the least see why, what is the use of making a proposal which could never be carried out, or if it were, would make the yield of the tax hope- lessly uncertain ? Or, finally, what are we to say to Mr. Balfour, who says that an estate after a man's death belongs to his family, and says it in the only country, except the United States, where a testator can strip his family of the last shilling ? Indeed, even in the countries which, like France, decree perpetual entails in favour of children, and call that democracy, the estate does not " belong " to the family. The creditor's claim comes first and ranks against the whole corpus of the property ; and the essence of Sir William Harcourt's proposal is that the State is, for its tax, one of the creditors. It is an assump- tion, of course, that it is a just creditor ; but then that is an assumption we have to make as regards all taxes, because without it the Treasury would never be full. The State cannot open a suit in a Court of Law, or even of morals, and prove before it asks for its tax that it is morally right for the individual to give way to the com- munity, and legally correct to say that an individual may be alive for certain purposes, payment of debts for example, even when corporeally dead. In a world like this there is no time for all that persuasion, and we must be satisfied with the concrete doctrine that, as the State has the power to make itself creditor for its taxes, it has also the right to do it. Sir R. Webster's argument, which was the only serious one advanced on Wednesday, is, of course, a " fetching " one. He says that under the graduated scale, if a man with £100,000 leaves £10,000 apiece to ten sons, each of them will have to pay more than if he hadinherited £10,000 from a father possessed only of that small property. That is quite true, and of course it looks unfair, but the unfair- ness is only apparent. It would have been just the same if the hundred-thousand-pound man had owed a debt of £10,000, and the ten-thousand-pound man had not. The single question is whether the State has a right, in the interest of the community, to claim a debt from the estate ; and the will of the community supported by the practice of years, affirms that it has. Did Sir R. Webster never hear of a rate, or does he deny that every estate in the country is pledged for its rates, irrespective altogether of the owner's means? The Estate-duty is a tax on the property, not on the person ; and as the single heir must pay it to the last penny, so must the ten heirs, though they suffer more than cousins who inherit from, poorer people. He might as well quarrel with the rule that if he inherits from an uncle he pays 3 per cent. Legaey-duty, and if from a friend, 10 per cent. The difference is perfectly arbitrary, but it is one within the moral com- petency of the State to make, and it has always made it. Suppose the testator directed that all taxes should be paid out of the estate before it was divided, nobody, not even Sir R. Webster, would grumble, and the State does no more than that. In very truth, however, Sir William Harcourt's answer, brutal as it was, was sufficient. If the tax was paid on the whole estate, the deficit would be choked ; if it was paid by each legatee, the deficit would be increased. The State must have the money, and there- fore it taxes at a high rate the entire sum devolved, instead of each bit of it at a low rate. That graduation itself may be unfair, we concede, because it is possible that taxes are payments for an article sold—viz., protection —but if it is fair, then its consequences in making taxes unequal cannot be considered. We do not consider them when we exempt small properties altogether.
The truth is, the debate on the Budget is a little insincere. We suppose the Opposition was bound to put the case of the landed interest, and it is hardly in human nature for a fighting party not to take advantage of the brewers' wrath, but the Budget is not a really unpopular one. In a broad, rough way it is a fair Budget, and the " country " will no more be greatly annoyed with it than it will be greatly pleased. The Opposition does not want to win on the year's finance, though it will accept a victory if it gets one, but to arrest measures of a much more irremediable character. The debating is therefore comparatively feeble, and the Government gets its full majority, to its great delight. It does not dislike the debate, which will enable it to assure its hundred petitioners that, but for the Unionists, all their petitions would be granted ; but it does like to show the world that it has a working majority. We continue to wish, we con- fess, that the Budget had been allowed to slide.
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