INDIRECT TAXATION.
[To THR EDITOR OD THR " SPECTATOR.1 STR,—You have often pointed out to us the injustice suffered in other less wise and happy countries of the world by the citizen who, when he pays a tax through consumption, inci- dentally, in many cases, confers a benefit on some of his fellow-citizens, who in turn, if he is a producer, are compelled to confer some benefit on him. While admitting the existence of this injustice, I would ask you to say whether injustice cannot be detected even in these fortunate islands.
There are two working men, one in possession of .£80 a year, the other in possession of £50. The first man, A, either for reasons connected with his religion or because he lives in the West and drinks cider, consumes no beer or whisky, and he smokes no tobacco. On the other hand, he fills himself roundly with beef and cake, and spends a good deal on other comestibles. The second man, B, drinks in moderation of beer or whisky, smokes three or four pipes a day, and consumes little beef and no cake. Now B pays largely, in proportion to his income, towards national expenditure ; A, except through tea perhaps and currants in his cake, pays practically nothing, in any case far less than his poorer neighbour B, who consumes the highly taxed articles. Yet A and B both enjoy the benefits of State expenditure. To both the State supplies education; the murder of either it will avenge ; for the sake of both A and B it will wage war with heroic Republics six thousand miles away. Why should A go down to his house untaxed rather than B?
I cannot accept the answer that B need not smoke and drink. It is an irrelevant answer, because we have in this connection to consider what men actually do do. And if we are to "tax for revenue only," we must not make taxation a means of attacking tastes of which we do not approve. Besides, is not beer as good a creature as beef, even if (which I doubt) slightly more injurious to the intellect when taken in excess? Besides, again, no Chancellor of the Exchequer puts so much on to drink and tobacco as to diminish consumption enough to diminish revenue. The reason why spirits are taxed more heavily than beer is that experience has shown that spirits will "stand more taxation" than beer.
I know that inequalities of contribution through taxes on consumption must of necessity exist in every system. But I submit that they are vastly enhanced where taxation is restricted to very few articles. In this country over £45,000,000 are now levied from three articles,—spirits, beer, and tobacco. If these duties were greatly reduced (which reduction would not after a time add much to their consumption), and if some taxa- tion were levied on foreign food supplies and manufactures, then, whatever else might be the result, A and B would contribute more equally to national expenditure. I admit that we then run into the other 'injustice," that part of A's income may go to benefit B, and part of B's income to benefit A, and part of the income of Cl, who produces nothing, to benefit both A and B. It is, in my opinion, a smaller one.
—I am, Sir, &c., BERNARD HOLLAND.
Harbledown Lodge, Canterbury.
[A tax is a necessary evil. When it is imposed on a com- modity the State ought to get into the Treasury the whole of the increase in price paid by the consumer. When we tax foreign spirits and beer we levy an equivalent tax by way of Excise on home-made intoxicants. A tax on foreign meat with an equivalent Excise on English and Colonial meat would be a most difficult and wasteful tax to collect, but it would be fiscally sound. A tax only on foreign meat would be fiscally unsound, because, while penalising the consumer, it would bring very little money into the Treasury. Mr. Bernard Holland tells us that he does not object to this. We do, azd • unless we are mistaken, our objection will be upheld by the nation.—En. Spectator.]
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