THE INCOME-TAX TEST.

• [To THE EDITOR OF TIM "SrEcroroz.")

BM—The increasing returns for Income-tax are due to a rise in rents, and not to a rise in profits, as the following figures show :—

Tear.

UNITED KINGDOM.

Schedule A (Rents).

Schedule D (Profits, &o.).

1876

164 millions

271 millions.

1877 174 „

256 PP

1878

177 )1 260 SO

1879

.. 180 31

257 ,, 1880

185 I/

249 ii

I have not the figures since 1880, but I have no doubt they tell the same tale. This is not all. Under Schedule D are included railways, mines, itc., much of the return from which is properly rent. This element has unquestionably greatly increased ; and if it were deducted, the diminution in gross profits would be considerably more. Lastly, since capital and population are increasing, the diminution in the rate of profits is even greater than the diminution in the gross profits.—I am, Sir, &c.,

J. E. S.

[Our correspondent is certainly mistaken. The yield of each penny in the Income-tax did, no doubt, remain stationary or fall off in the years he mentions ; but it has since recovered, as Mr. Childers pointed out in his last Budget speech, and the increase under Schedule D itself in 1881-2, as compared with 1880-81, was remarkable.—ED. Spectator.]