TOPICS OF THE DAY
THE BUDGET.
MR. LOWE had on Thursday night what would have seemed to some of his predecessors at the Exchequer, and to most of his contemporaries at foreign Exchequers, a very formidable deficit to deal with. It was, like the deficit of 1841, a deficit of more than two millions sterling ; nay, it was larger by nearly £300,000 than Mr. Baring's celebrated deficit of that year, which led to Lord John Russell's resigna- tion and the accession of Sir Robert Peel, with the then undiscovered financier, Mr. Gladstone, in his train to office, and to ar'egime of financial reform and economical revolution. There were one or two small similarities, too, in the speeches of these widely separated Chan- cellors of the Exchequer under a cloud, which bring out the marvellous contrast between the two situations still more vividly. Mr. Baring and Mr. Lowe both discussed the possibility of adding a succession duty in the case of real property ; they both yearned after the House-tax, which in 1841 had been recently repealed, and in 1871 had been generously promised for the purposes of local taxation ; and both cast a wistful glance at the exemption from duty granted to "agricultural horses." But here the parallel ends and the contrast begins. Mr. Baring was in real difficulties ; every prospect before the House was gloomy ; there was no manner of doubt on the minds of Membgrs that the result of the year would be, instead of more favourable than the moderate expectation formed of it, much less so. Year after year the deficits had been accumulating. The country looked upon the task of raising a revenue of £50,000,000, with something like the despair with which a man who habitually finds his means short of his income, contemplates the growing burden of debt and the diminished credit with which he has to meet it. When Mr. Baring had finished his statement the House burst out into murmurs, and though the fall of the Ministry was delayed for another four months, it was obviously due to the helplessness which the country felt, and which the Cabinet virtually confessed, under the burden of a deficit considerably smaller than that which Mr. Lowe declared on Thursday night. Yet how different was his
position ! Nobody felt the smallest real anxiety at his declare- _ tion of inability to make both ends meet without fresh resources. There was the sort of grumbling which Radicals and Con- servatives alike regard as an inalienable right, but the only genuine disgust expressed was not at the taxation, but at the purpose for which one large item, the Army Estimates for the year, "including the money required for extinguishing Purchase," was needed. When Mr. Lowe began to discuss ways and means, the general feeling in the House, instead of dismay and vexation, was one half of amusement, half of a somewhat irritable curiosity. There was a general impres- sion that he had, perhaps intentionally, somewhat under- estimated his resources and exaggerated his difficulties, for the sake of the more agreeable prospects which his present proposals may lead to a year hence. Perhaps this impression was hasty, as the house-tax, amounting to £1,200,000. must be given up to purposes of local taxation in 1872-3, if Mr. Goschen's Bill should pass. But even admitting that Mr. Lowe was a little exaggerating his difficulties, the House of Commons was apparently not unfavourable to that policy. If the National Debt is to be substantially reduced, it must be by getting large surpluses of revenue over expenditure ; and in order to get large surpluses of revenue over expenditure, it will always be advisable to affect a little more despondency and a good deal less hope, than we really feel. When Mr. Lowe suggested his very mild enhancements of the Probate and Succession Duties, there was probably a certain sense of relief in conse- quence of the exaggerated rumours which had been circulated. When he proposed his duty on matches, there was general hilarity at his confession of obligation to the ingenuity of our Transatlantic cousins, though stern theorists thought it their duty to frown on a policy of reaction ; and when he proposed to change the Income-tax from a tax per pound into a tax per cent., and translated his proposed addition of lid. per pound or thereabouts, into 102. 8d. per cent., there was a slight feeling of stimulated intelligence in the House, like that which a school feels after an easy lesson in decimals, instead of the weary sense of a new burden. Thus easily, though, of course, not without the proper per-centage of grumbling, did Mr. Lowe get his money, and not only his money, but the prospect, if peace and prosperity continue, of I a much better surplus than he calculates upon for this year,. and a pretty certain balance between revenue and expenditure' even for 1872-3, in spite of the expected loss of the house- tax, and the expected large increase of the sum needed for extinguishing Purchase, supposing, that is, that the remaining Estimates do not increase for that year,—since a very con- siderable proportion of the income from the new taxes pro- posed will not come into hand at all till the year after that which is now current.
On the whole, then, we think the country is to be congra- tulated on getting over so formidable a deficit on such easy terms ; nor do we think the murmurs of the discontented Radicals at the proposals will bear any serious examination.
The objection to the tax upon matches is of course by far- the most plausible. It is called a reactionary proposal, because it is a new 'tax upon productive industry and on an article of universal consumption. But as regards the injury to productive- industry, there is really no more reason why match-makerst should not bear a slight portion of the inconvenience of public- burdens, than why the great distributive industry of banking should not bear the same. If the penny stamp on cheques,. and the much higher stamps on bills of exchange, are justifi- able, the halfpenny stamp on match-boxes is not less so, since in neither case will it really fall upon the productive or distribu- tive industry, except so far as it causes a public economy in. cheques or matches. So far as it does - this, of course the producers will be likely to lose ; but they will be no worse off than the producers or distributors of malt and tea and sugar,. and other taxed commodities out of which we raise our revenue. All producers produce with full notice that if the nation thinks their branch of production can yield a revenue of a less objectionable and less generally injurious kind than any other- to which we may have to resort, they will be liable to. such an impost. As for the new burden on the mass. of the people, it was clearly right to put a new burden- of some sort on the mass of the people. As it is,_ we are to raise less than one-fifth of the new burden. by a tax which touches everybody, and the other four- fifths by taxes which do not touch the poorest at all (the Income-tax and the Probate and Legacy and Succession Duties). What can be less just than to let the nation suppose that the poor have a right to complete exemption ? Yet if, any part of the new burden is to be put on the people, what. can be fairer than a tax which will really fall on waste much_ more than on necessary expenditure, and which may per- haps be completely saved by the people out of waste,_ with the additional advantage of checking practices very dangerous to property and life ? Next to spirits, which when profusely used are fatal to the health of the people, there can. hardly be a fitter subject for taxation than those little machines. which are of a cost so inappreciable and yet the cause of so much danger that we are sometimes almost inclined to reproach Nature for her lavishness in having given us so formidable a power without compelling us to guard?
and economize it. If there were to be a popular tax at all, where could a better popular tax than this be found ?. The two criticisms passed by yesterday's Times on the budget. seem to destroy each other. The Times reproaches Mr. Lowe with not throwing a larger burden on to the indirect taxation. ofthe country so as to reach the whole people ; and then it also reproaches him for the " reactionary " character of the match duty. The Times wishes Mr. Lowe had put id. on the income-tax and 2d. on the tea duty, instead of putting lid. on the income-tax and adding a new match duty. Why, the 2d. on tea would be far more "reactionary," in any intelligible sense of that word, than the match duty. The 2d. upon tea would: have been a tax on a commodity already strictly economized by the poor, while the match duty is a duty on a commodity recklessly wasted by them ; the former could not have been saved out of waste ; the latter may be ; the former could not. have checked a carelessness which causes the destruction of much property and not a few lives ; the latter may. And, as for the burden on the match-makers, why are they to be considered more than the tea merchants, who would cer- tainly suffer from any new duty upon tea ? No doubt diffi- culties will arise in relation to the mechanical arrangements for the export of matches, as matches cannot be easily counted,. and the declarations of number will be liable to great frauds if
are allowed ; but in all probability the proper depart- ments have considered this difficulty, and think they can get over it. The export is not very large ; in 1868, the computed real value of the export of matches was under £150,000, much less than a third of what Mr. Lowe expects to net by his tax.. The changes with regard to Probate and Legacy and Succession Duties might have been bolder. The tendency to equalization is good, but it would have been better to make a greater step in the direction of uniformity when the matter was taken in hand at all. Still, there is no kind of tax which falls less heavily on the community than that on prospective ownerships, as the effect of the tax is discounted ; that is, people know that the State will take its share of the property left by the deceased, and only count the residue as their own. The change in the calculation of the income-tax will no doubt be found inconvenient, as the public do not understand decimals, and cannot be made to understand them in a hurry ; and it is desirable that everybody should be able to check for himself the calculation of his income-tax. If Mr. Lowe had proposed a penny-farthing addition to the income-tax it would, we think, have been better. There can be no difficulty about farthing calculations, and the result would have been very nearly the same. He would have got by that an addition of 10s. 5d. per cent., instead of what he proposes to get, an addition of 10s. 8d. per cent.,—and the difference would have been of no real moment. The division by farthings would be quite small enough for the practical purposes of Chancellors of the Exchequer.
The most unreasonable criticisms of all were passed by the extreme Radicals, who objected to the total amount of the Estimates,—a total swelled by the large sum needful this year, and for many years to come, for the extinction of Purchase, and the reform of the Army. The Radicals should be consistent with themselves. They ask for a democratic and reformed Army, and they are to get it ; but they cannot get it without paying for it, and to taunt the Government both with not moving fast enough in military reform, and with spending too much on military re- form, is clearly unjust. On the whole, Mr. Lowe's budget seems to us both ingenious and successful,—and in regard to its estimates of revenue, very cautious, so cautious that we have good reason to hope for a large surplus.
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