TILE UNJUST TAX.
SIR ROBERT PEEL has contributed the following apology for the Income-tax as it is-
" I think, while a tax of this nature exists, it ought to be a tax upon income. If you intended to make a great national exertion, and professed the intention of taxing capital, then you ought to tax it. If you thought it desirable to make an exertion to pay off a portion of the National Debt, it might be necessary to make great exertions, and subject capital to a great taxation. But I am speaking of an annual deduction to be made to meet annual demands. In that case, I must, after full and mature consideration, say, the tax ought to be upon income, and that there ought to be no distinction between the different sources from which income is derived. I never would consent to the relief of income derived from trades, and the relief of income derived from professions, for the purpose of making an invidious distinction with respect to what is called realized property. I think it would be most dangerous to make that distinction. I think an effort ought to be made to meet the annual demand by annual exertion; and that income, from whatever source it may be derived, ought to be subject to an equal amount of taxation. That is the principle upon which all your taxes are levied. Take the taxation for which this is a substitute. Surely, all the taxes which have been repealed fell equally as heavily upon the professional man as upon the man whose income was derived from real property. You made no distinction as to windows; you made no distinction as to articles of luxury; you made no distinction as to assessed taxes in the case of the professional man and the man of realized pro- perty. All parties derived benefit from the repeal of indirect taxation, for which the Income-tax was substituted. It appears to me if you attempt to make any discrimination, the attempt will be fallacious; that same difficulty will occur; and that no principle can be devised more just—I would rather say more free from objection—than that which you have adopted in this respect."
Sir Robert's authority will lend a sanction to the Income-tax, that is not supported by the arguments with which the apologist is fain to content himself. In the foregoing passage there are several quasi-arguments, the hollowness of which may be ex- plained in few words.
When you tax consumption or use, you need make no dis- tinction between the holder of permanent income and the holder of precarious income, because the holder of precarious income has already the power of making the distinction for himself. The man who is compelled to economize, who must make sacrifices of luxury to avoid sustaining an undue burthen of taxation, does so by restricting his consumption: by consuming less of the taxed article, he can regulate his payment of the tax. That is not the case wit.h income,—unless Sir Robert means to say that the man who cannot afford to pay so much income-tax may avoid it by foregoing income ? Sir Robert adopts the "annual" fallacy% Atk-annuttl demand, he says, must be met by annual exertion, of wkkh income is the fruit. Now, much income is the fruit of no "exertion" at all, annual or cyclical, Vet accrues, as the wild flowers do, spon- taneously. Take tit4riannual exertion" limit, and such property ought to be exempted'. It is admitted that property 'night be taxed for "a great na- tional exertion," such as to pay off the National Debt. But there does not really exist any conresponding distinction between debt and current expenditure. The National Debt is Only accumulated expenditure; and if property may be taxed to meet past expendi- ture, it may equally be taxed to meet current expenditure. In the case of annual payments by our own State, there is a peculiar reason against the distinction attempted by Sir Robert Peel : three-fifths of the annual payment is appropriated to meet the interest of that very debt which he would consent to make a charge upon realizW _property.
He never would rplieve the income of trades and professions
"for. the purpose of an invidious distinction with respect to what is called realized property." We are not aware that anybody proposed to Make such relief for such a purpose. In- deed, the immediate question does not relate to "a tax upon pro- perty": that is not the point; and a debater who sustains so much responsibility by the possession of so much influence ought to be mo,re precise In his debating. The argument in issue is, that in- comes, nominally of the Same amount, differ in value according to the source whence they are derived—even in present value. A thousand a year derived from realized property commands a resi- dence in any part of the globe, and imparts to the income, at the option of the holder, the value determined by the rate of prices in London, Paris, or Florence. The same amount derived from the profession of a barrister binds the holder to a residence in town, and to an expensive circuit. The value of incomes varies in seve- ral other respects. Mr. Horsman's plan, or any plan of graduating an income- tax in accordance with the value of income is spoken of as an impossibility. The impossibility has not been proved, and who believes it? Of Mr. Horsman's plan it has been said to be more "inquisitorial" than the present : a misrepresentation—the in- quisition would be just as it is now ; only Mr. Horsinan supplied a basis for calculating the ratio of value andfixing the ratio of tax. The "injustice" of the tax as it is now levied is admitted by Ministers and Ex-Ministers; but one and all refuse even the at- tempt to redress that injustice I
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