KR. GLADSTONE'S WAR BUDGET.
St. John's Wood, 9th 3fay 1854. Bra—When I read your request, in the last number of the Spectator, that your correspondents would give their pens a rest for one week, I certainly Lad no intention of disregarding your wishes on that point ; but I was at that time quite as far from contemplating the possibility of the proposal of such a budget as that which Mr. Gladstone brought forward last night ; and on this ground, and considering the vast importance of the subject, I trust you will excuse me for troubling you with the following remarks upon it. In the first place, I have always regarded Mr. Gladstone's dogma about providing the expenses of the year within the year as utterly inapplicable to a war-expenditure, and as founded upon a fallacy which I have been sur- prised to see so generally suffered to pass unquestioned by public speakers and writers. It is true that you have on one or two occasions rather hinted objections than stated them fully and distinctly ; but I cannot say that I have been altogether satisfied with your mode of treating the subject. If a state of war were the ordinary and normal situation of the country, so that its expenses had to be regarded as a fixed encumbrance, like the interest of the National Debt, then indeed the rule which Mr. Gladstone wishes to este- _Nish would be perfectly sound; but as this assumption is clearly inadmissible, .1 confess I can see no reason for enforcing that rule. How do men act in _their private affairs in analogous circumstances ? A person may be com- pelled to incur a heavy expenditure for some temporary but indispensable object, which he could provide for out of his current income only by sub- nutting to the greatest self-denial or even privations, but which he can meet by borrowing the sum required, to be repaid by instalments; thus distri- buting the expenditure over a number of years, and diffusing the pressure sipon his comfort in such a way as to render it endurable. Now the man who acts on the second plan is not usually regarded as being either im- prudent or unprincipled : quite the reverse; he is thought to meet the ne- cessity in the beet possible way ; whereas, for a private individual to adopt the course so fondly insisted upon by Mr. Gladstone would be universally considered as absurd in the highest degree. It appears to me that there would be nothing either dishonourable or unmanly, still less foolish, in fol- lowing a similar plan in public affairs. I have no wish that the present ge- neration should shirk their fair share of the burden occasioned by their own acts, but simply desire that the burden should be distributed so as to cause the least possible distress, privation, and discontent. An important reason in favour of this policy is the fact, that a period of war is one in which the people generally have their resources diminished, while the price of the necessaries of life is enhanced ; so that to impose upon them at this very time a large additional amount of taxation, instead of deferring a portion at least of it until the return of more prosperous seasons enables them to bear it with comparative ease, seems really nothing less than downright perversity ; and certainly none of Mr. Gladstone's elaborate argu- ments in support of his dogma, have, in my opinion, been quite free from that characteristic. Whether it is true, as I have seen and heard alleged, that he disapproves of the war, and intend,' his measures to operate as a punishment upon the nation for daring to be of a different opinion, I do not know ; but, at any rate, it will be monstrous indeed if the people at large are made victims to even the well-meant crotchet of any individual, however talented or honest.
Mr. Gladstone, it is true, disclaims adherence to his views on this point un-
der all circumstan '
circumstances, and admits that it may be necessary to abandon them should the war be much prolonged, or occasion an unexpected amount of ex- penditure. It would surely be better, however, not to wait till well-founded popular dissatisfaction has been engendered ; but to adopt at the outset a safer system of finance, and thus prevent the growth of any such discontent. But, secondly, supposing that Mr. Gladstone is allowed to have his own way on this point, the mode in which he proposes to raise the additional ten millions yearly is so grossly unjust, that I can scarcely conceive the possi- bility of its being sanctioned by the House of Commons, especially as those who would suffer by it belong chiefly to the electoral class. One of your correspondents, last week, estimates the number of persons subject to the Income-tax at a quarter of a million ; but let us assume that it is half a million, still what an iniquitous measure of confiscation would it be to im- pose upon that small class, about one-sixtieth only of the entire population, considerably more than half of the whole additional taxation incurred for the prosecution of objects strictly national! Yet such would be the effect of adopting Mr. Gladstone's proposal to double the Income-tax for the whole of the war. As is customary with him in such cases, he professes to alive to the injustice of this proposal taken by itself, and accordingly he proceeds to apply what he is pleased to call a remedy,—to wit, he proposes to levy taxes upon certain articles of general consumption to such an amount as he estimates will supply the rest of the money needed. Against his choice of articles to be so taxed I have nothing to say ; but surely he must calcu- late on an unusual degree of stupidity in the payers of Income-tax, if he thinks they will regard this as setting the balance straight between them and the rest of the community. Are not they, as well as the labouring classes, consumers of beer, spirits, and auger? And if so, will not they have to bear "their full share of the taxation imposed upon those commodities ? How, then, does this taxation serve as a counterbalance to that to which they ex- clusively are subject, and which is, moreover, of double the amount of the other ?
But, while I decidedly object to the doubling of the Income-tax, I agree with Mr. Gladstone, that it would be very unadvisable to reimpose any of the indirect taxes that have of late years been repealed. In what way, then, it may be asked, would you provide the necessary funds, supposing Mr. Gladstone's ruinous plan of raising the whole expenditure within the.year to be adhered to ? I answer, by a universal house-tax, of such a percentage as will supply the amount needed. I cannot here enter fully into this ques- tion ; but will simply mention one or two striking facts in connexion with it. At the census of 1851, 'it was ascertained that the number of inhabited houses in Great Britain was about 3,650,000, of which only 475,797 were in 1852 assessed to the House-duty, (Companion to the Alma- mock for 1854, page 148,) leaving 3,174,203 subject to no tax. In Ireland there were, in 1851, 1,047,735 inhabited houses, not one of which pays House-duty. The imposition of a tax, of say 10 per cent, on all houses in Great Britain and Ireland would yield a sum at least equal to the expected return from the increase of Income-tax, and it would have the great merit of compelling every individual to contribute to the national resources in something like proportion to his means. It is probable that you may not be able to find room for this letter, which has exceeded the limits within which I hoped to confine it ; but I trust that you will take an early opportunity to discuss the questions which it raises. If the justice of Mr. Gladstone's proposals can be shown, I shall submit with a good grace to the privations which they will entail upon me; but I confess that, at present, the prospect of the evils incident to war-expenditure is rendered far less endurable by a sense of harsh and unjust treatment; and if the general body of Income-tax payers regard the War Budget in the same light as I do, the existence of the Government will not be of long duration.
[Our correspondent states very fairly some of the objections which Mr. Gladstone will have to meet, but none, we think, that cannot be met. One we are surprised to see repeated by so intelligent a writer—that which he has " heard alleged." There is nothing that we may not " hear alleged t" but we are sure that J. R. himself would not allege anything so very silly as the old woman's suspicion that Mr. Gladstone intends the Income-tax as a fine on the sin of war. A House-tax might be preferable to an Income- tax, as being more general, and therefore productive, with less oppression: but in so far as the House-tax is a direct tax, it is open to the serious ob- jection against direct taxes imposed on the needier classes, that it calla upon them to provide quarterly payments in the lump. The fact that an Income- tax payer drinks beer, does not destroy the character of the Malt-tax as a com- pensation, so far as it goes. On the multitude, a tax affecting beer is a tax on means, through consumption ; with the humble it is in proportion a severe impost, extending over a very numerous class; with the Income tax payer it is an impost trifling in proportion to means: its character thus ac- commodates itself to the classes that pay it. The tax is, so far as it goes, a compensating tax : raising much out of the classes not paying Income-tax, it will proportionately spare the necessity for pressing again on the Income- taxed class.—En.]
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