TOPICS OF THE DAY.

MR. BRIGHT'S BUDGET.

WHILE the shipowners are asking for hostile tariffs to enforce Reciprocity upon foreign countries, Mr. Bright is proposing a belligerent budget to relieve one class of the people at the expense of another. We have a great indisposition to run the slightest risk of misrepresenting an economist from whom we differ so much, and before we say more we will endeavour to ascertain what his proposal is and let him state his own grounds for it. He proposes to repeal the following taxes, the amount of the pre- sent and probable loss being stated in the column opposite the name of each tax—

Income-tax

6,500,000 Tea 5,274,000 Sugar 5,979,000 Coffee 425,000 Wine [duty minced to ls.—loss, say] 1,000,000 Corn 580,000 Currants 380,000 Raisins 128,000 Timber 574,000 Pepper 104,000 Assessed taxes [except House-tax] [0 m itted .] Marine insurance 284,000 Fire insurance 1,402,000 Various articles, 439 in number 750,000 Total—something above

In lieu of this amount of taxation repealed, Mr. Bright would create an entirely new tax upon accumulated property. He ex- empts all persons whose property does not amount to 100/. in one shape or other ; he finds by Parliamentary returns that the total amount of property belonging to persons who possess more than that sum is probably 6,700,000,0001.; and a tax of 88. annually imposed upon every 100/., he calculates, would yield about 27,000,000/. sterling. This is his plan.

The whole drift of his speech is, to represent that at present "the poorer classes," "the labouring classes," pay an undue share of the taxation of the country, because they consume the larger portion of articles subject to Customs and Excise duties. Thus he reckons that upon the articles tea, sugar, and tobacco, the upper classes pay considerably less than one-third, the middle classes something more, and the working classes still more. Of the whole Customs and Excise, taken at 42,000,000/., the upper classes pay 7,350,0001., the middle 15,960,000/., and the poor 18,690,000/. In another part of his speech Mr. Bright represents "the poor" as the unenfranehised. Of the 24,000,000 of people in the United Kingdom, he reckons that 18,000,000 of persons live in houses under 10/. value, and only 6,000,000 in better houses ; the 18,000,000 consuming more of the heavily taxed articles to which he has referred. His budget, therefore, is re- presented as a plan for relieving the poor who are now said to pay the largest share, for relieving the unenfranchised, and making the enfranchised pay their way. He speaks of this plan as if it were to be wholly and exclu- sively a measure of relief.

"I will undertake to say, that there is not a man with the smallest idea of political economy who will attempt to deny that if the duties on tea, coffee, sugar, spirits, malt, tobacco, and those spirits mostly used by the great body of the people—that if those duties were all repealed tonight, not only would there not be a single labouring man in Lancashire whose wages would fall, but I believe their wages would rise." Their wages would rise, of course, because there would be, he says elsewhere, a general extension of trade ; but let us see a little more of his explanation. in the course of the same speech, Mr. Bright professes himself unable to see through the argument which we have used ; that wheresoever the taxes are imposed, they are paid in something like an equal per centage by the entire body of the consuming classes, whatever their incomes may be. He calls this argument " stuff: " in order to enlighten him we will illustrate our meaning by passages from an economist whose reasoning he may perhaps adopt,—though we will not answer for his doing so. The financier is stating the amount of taxes paid by the richer classes, and he tells us that we must not set down to the credit of those classes so large a sum as would in the first instance figure against their names. "We must bear in mind that whatever the consumption of the richer classes, specially so called, far more than half of it in their houses is consumed, not by what is called the family, but by servants who minister to the wants of the family ; and I take it for granted that whatever is con- tributed to their maintenance in their houses, or for wages in or out of their houses, must be reckoned as wages for services rendered—and that my Lord This, or Mr. Somebody That, who is very rich, and has twenty or thirty servants in his house, is not to put down to family expenditure all those taxed articles which are consumed by those whose service he pays for, partly in food and lodging, and partly in money in the shape of wages."

There is much sense in this remark ; in a broad view the taxes imposed upon Lord This or Mr. Somebody That, who is very rich, are, properly speaking, paid out of the fund earned by the twenty or thirty servants in his house ; a great deal of the rest is paid out of the fund earned by the labourers and farmers on his estate. This, which may be called a passage from the account-book of political economy, illustrates the fact that wheresoever the taxes are imposed, the burden is ultimately are distributed over the general body of the producing and consuming classes. The same authority happens, in a similar manner, to show that taxes levied through the Customs and Excise are virtually, and in their effect, equivalent to an Income-tax. He is alluding to eighteen heads

26,000,000

of families taken from the elite of the working classes in Man- chester' whom he takes as good specimens of their order- " 1 have no doubt, making the calculation with these eighteen persons, it will be found that the direct Income-tax which they pay, or rather the in- direct taxes which they directly pay on the six articles, tea, coffee, sugar, ale, spirits, and tobacco—and of the three last the quantity is inconsiderable —will amount to 15d. or 16d. per pound of Income-tax ; and if we take nine of these, who receive the smallest income, amounting to 238. or 248. a week, the amount is more than 20d in the pound, which will be more than an Income-tax of 81d. per cent upon their whole earnings."

These two passages, which we have just quoted, very fairly il- lustrate our argument, in saying that the tax imposed upon con- sumable articles is the equivalent to an Income-tax, and that whoever may be called upon to pay in the first instance, it is ul- timately paid by the producing and consuming classes. The economist who supplies us with these two handy illustrations is Mr. John Bright !

He omits, however, one element in the consideration,—the form or method in which the tax is paid. We have always held that it is an advantageous circumstance if the taxes can be collected from the rich in lumps, from the humbler classes in. small driblets as they receive and pay their money. It is this which makes taxes upon the property of the rich, or taxes levied through Customs and Excise convenient in the levy, while they are ultimately borne by the whole body of the people.

Mr. Bright's plan, however, is by no means one exclusively of relief; he also invites us to acquiesce in his proposal to create a new tax of 27,000,000/. sterling per annum. Almost avowedly, he proposes that this amount of taxation, which is taken off "the poor," "the unenfranchished," shall be imposed upon the rich, the enfranchised. This is not fair. What is the object of taxa- tion? It is not to provide amusement, luxury, or benefit of any kind for the rich classes. The object is exclusively to provide for the general wants of the entire nation ; and simple equity would dictate that the burden of taxation should be borne by the entire community. Equity, perhaps, would also suggest that while the bulk of the taxation should fall upon the bulk of the people, in detail its incidents should be as nearly as possible apportioned to the means of the several classes. To attain this result is the triumph of a Chancellor of the Exchequer : Mr. Bright makes no attempt of the kind.

His proposal, so far as he changes our taxation, is that 6,000,000 should pay for the rest—that the first-class passengers should pay for the third if not for the middle class. It is pre- cisely equivalent to the clamours of the Roman people for " panem et circenses ; " and if Mr. Bright's creed and collar forbid his agitating to promote the free admission of the working classes to the theatre or amphitheatre, he may draw the last word, not from "circus," but from Circe ; for with remarkable liberality he does agitate for a freer trade in the potations which the British Circe, in the form of barmaid, administers to the working man over the counter. Panem et eircenses, in this sense, Mr. Bright demands for the 18,000,000 out of the pockets of the 6,000,000; and he intimates that he only restricts his measure to its present limits out of deference for the English objection to sudden changes. Otherwise, the whole of the Bright Budget would be charac- terized by this distribution of the burden of taxation. It is not only unfair, it is impracticable. We often find our- selves differing from our weekly contemporary, the Economist; whose knowledge of economical matters, however, is unquestion- ably great, and whose authority is deservedly high; and we could not put two or three points in Mr. Bright's multiform mis- take better than we have found it in the words of our contem- porary. "Can Mr. Bright have made a calculation of the burden which such a tax would practically impose on those subject to it ? A man does not pay taxation, annual taxation especially, out of his property, but out of his in- come. The income which a 1001. invested in the Funds yields, is not so much as 31. 48. per annum. The tax which he proposes would be 88. on 3/. 4s., or one-eighth of the whole amount. By this rule, a man who de- rived from land or the funds

t.

104 would pay 13 reducing his income to 91 120 71 15 /2 I 105 160 It 20140 Aperoo,ont.,w with 400/. a year so derived would pay 5;131., and with would pay Now on this plan a widow lady, with 104/. in the Funds, and no other resource, would pay 13/, into the Exchequer; while many an artisan whom Mr. Bright describes as living in excellent houses and earning 35s. a week would be let off altogether ; the widow being mulcted to make the artisan more comfortable. What sort of " equality" is this ? Of course our contemporary is right in assuming that Mr. Bright cannot have considered it ; and it is remarkable that while on other subjects he has, however recently taken -up, devoted much energy, intelligence, and trouble to the study of the question au fond, in this matter of taxation he has evidently allowed himself to be "crammed," and has only assimilated, the most superficial part of the information. The case of the widow lady is but one example out of a very various class. What is to be the test for estimating the value of each 100?.? Is it the saleable character of the property appraised ? And if so, at what date ? How, for instance, should we estimate the property in a railway, or in a great steamship, which may one day be worth 1001., the next day worth naught, or possibly 100/. less than. naught ; and yet through change of circum- stance, nay before the year is out, be worth 100/. again, or some larger portion of it. Is the owner of a railway which is at pre- sent, and will be for some time under difficulties,—which is

making perhaps a few shillings per 1001. share, to pay 8s. to the State. Is land mortgaged to the full amount of the rent to find fls. per 1001. out of some other source than itself?

We need scarcely pursue details where the measure is false in its whole principle. The object of the tax is to provide an annual revenue for the annual requirements of the entire nation. It is obvious that this outlay should be drawn from the floating income, which accrues and is expended during that current year. Even if Mr. Bright's plan were adopted, and the tax were assessed nominally upon the supposed value of the property, it would be paid out of the floating revenue ; only, apportioned to the property in idea, it would take its chance of being proportioned to the in- eome. Bat it is not to be imposed upon the whole resources of the country, it will fall only upon a class. With the rest of the community spending as it listed at the charge of a class, with the resources of that class depreciated to the extent of the burdens imposed upon it, we must soon find that the very method of raising such taxes would extinguish the source from which they were drawn ; and the plan for relieving the poor at the expense of the rich would soon invert the application of the terms. Perhaps the shortest way to fetch out the whole absurdity of the scheme would be, to let -Mr. Bright officiate for one wild year on the Treasury bench, as Chancellor of the Exchequer ; only the exposure of his financial fallacies would be attained at too terrible an expense to those " poor " who are the adopted children of his economy.