TAXATION IN THEORY.* GREAT BRITAIN has had its full measure
of animated dis- cussion of principles of taxation, and recent Budgets have not tended to decrease the solid or ephemeral output. It is there- fore from a highly interesting point of view that Mr. Kennedy approaches the period and the historical matter on which he concentrates his work. His book is "an essay on policy and opinion"; he has tried to discover the underlying policies of English Governments during a century and a half which saw many changes in methods and subjects of taxation. To do so he recounts and weighs the contemporary opinions upon the theories which were put into practice or proposed as alternatives. Besides the acts and speeches of statesmen and the writings of philosophers and economists to whom we should expect to find reference, Mr. Kennedy gives us the results of delving in Parliamentary Reports and innumerable contemporary pamphlets. His researches must have been laborious, and the lucidity which is so difficult to attain, but so necessary if such work is to be anything more than a student's book, is somewhat overclouded by the labour.
The reign of William and Mary and the period of Pitt with his direct Income Tax were times of pressing financial need, when many theories went to the wall, but even then the questions of distribution were eagerly discussed. As a rule the purposes for which money was raised varied from external causes. In those days there was no thought of using taxation
• English Taxation, 4.1). 1640-1799. By W. Kennedy, London: George Bell . and Sons. Lis. 6d, net.1 as a means of transferring directly money from the more prosrerous to those of their fellow-subjects who through misfortune or fault could plead poverty. (We envy the days wehen Parliaments were determined also to protect the subject from undue inquisition into his house and affairs.) The Commonwealth inherited one theory connected with the pur- poses of taxation which soon disappeared in "consolidation"; namely, that particular taxes were for particular expenditure —e.g., that the Customs were for the protection of shipping. The methods of obtaining money, by direct or indirect taxa- tion, Customs and Excise, from land or personalty, from capital or income, are dealt with here, but more space is devoted to questions of distribution. One result of con- solidation is the practice, now widely admitted, of compensa- tion—that is, of imposing taxes that are certain to press unequally upon classes who can be compensated by the incidence of other taxes. Mr. Kennedy deals fully with the perennial dilemma; are "the poor" to be exempted from taxation through compassion, or does such exemption take from them even that which they have, their claim to citizen- ship F The question is complicated by the doubt whether such taxation is shifted by the raising of wages which is inevitable if the taxpayer has been living at a mere subsistence level. The one outstanding lesson that nobody used to doubt is that all taxation is an evil, necessary or not, for individuals, especially the poorest, for the capital wealth of the country, and for trade generally, unless, indeed, protective Customs and sumptuary taxation serve industry and morals. There are only two points on which less light is here thrown than we could wish : one is how growing publicity and communica- tions affected the gathering of taxes ; the other is the .experience to be gained of the tendency of taxes to be less productive as they are increased. It is also doubtful whether an uninformed reader would get a very clear idea of the Land Taxes, a subject upon which current misrepresentation by certain politicians would justify particular emphasis on the facts. Mr. Kennedy refrains from lightening his essay by giving us any opinions of his own or hints of lessons for the future deduced from his studies. The one theory against which we perhaps detect some wrath is by a loose nomencla- ture called the "freeholder" conception of society, by which men are held to be "born not to function or service, but to rights or enjoyments," and the function of the State is to protect these rights. If we could distinguish the State from the citizens, we might agree, but we cannot.
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