LOCAL TAXATION. T HE Report of the Local Taxation Commission brings
out very strongly the ineptitude of our method of treating Royal Commissions. It is a mine of learning in regard to local taxation, but for practical purposes it is almost useless. There are few definite conclusions of a workable kind, there is no real guidance of public opinion ; in a word, there is nothing which will stop argument or, put an end to controversy. The various combatants in the controversy will struggle as bitterly as before, and no one will be able to say that this or that point is finally settled by the Commission and cannot be fought over any more. It could not be otherwise with such a welter of conflicting views as are bound together in the Blue-book that contains the Report. It is not to be wondered at, there- lore, that no clear verdict is obtained. The truth is that the whole system of Royal Commissions as at present conducted has broken down, and that such Commissions must either be abandoned altogether or be entirely reformed. Royal Commissions are intended to provide an opinion, like that of counsel, for the guidance of the nation. It need not accept the opinion, but it wants one that is definite and clearly stated. Instead it now seldom gets back any- thing but a babel of varying sounds,—a hubbub of words instead of a plain direction. The result is due to two things. In the first place, instead of appointing four or five impartial men to act as a kind of jury, to hear the -witnesses, and come to a conclusion, we now place all the chief witnesses on both sides on the Commission itself, and leave them, as it were, to shout each other down. But the first effect of putting on men to represent all sides is that they at once feel that they are not a body out of which anything practical can come. The old Commissions con- sciously inquired with a, view to legislation. They acted on the supposition that their recommendations would become law. They felt it was their business to put their finger on the place, and say: "The nation ails here or here, and such remedies ought to be applied, and applied in a particular way." They reported, that is, with that full sense of responsibility which alone comes from the belief that one's advice is going to be put into practice. The modern Royal Commission clearly does not feel any such responsibility. Every page of a modern Report shows that those who report view the matter in a more or less academic light. They take immense trouble, and, they make elaborate suggestions, but one does not feel that the Men who make either the majority or the minority Reports are continually saying to themselves "How would that work out in an Act of Parliament ? " or "Could Parliament really enact that ? " The feeling is always over them that they are not giving an opinion that any one will think of acting on as it stands, but that the most that they are doing is providing material out of which some one in a Government Department will some day construct something. They feel, that is, that they are opening up a quarry, not planning a building, and that very likely their quarry will be abandoned for another in spite of all their toil.
The present Report, as we have said, is a capital example of the evils attendant on the modern system of mine. Royal Commissions. They have opened a quarry, or rather several quarries, but who can say that the stone will ever be used ? Two lines of suggestion, not exactly new, but newly set forth, are to be found in the Report. One is that a distinction should be made and acted on between onerous and beneficial rates, and the other that the local authorities should receive from the Imperial Exchequer, not the produce of assigned revenues, but instead "block-grants,"—i.e., grants of sums of money. Both suggestions are very ably defended 'by various Members of the Commission. In regard to the first, we cannot express any great sympathy. The defenders of the proposal admit that the onerous rates and the beneficial rates shade off into each other, but they seem to think that in spite of that it would be possible and useful to draw a distinction. For ourselves, we cannot admit that the distinction has any great practical value. It seems to us very much like the old attempt to distinguish between luxuries and necessaries. The distinction seems sound enough in the abstract, but whenit is examined closely it disappears. The proposal Co do away with the assigned revenues and to adopt the " block-grants " system seems to us, on the other hand, very much more reasonable. It gets rid of a great deal of injustice, and it also prevents the absurdity in a growing revenue of having to hand over more and. more money to the local authorities without any assurance that they really need an increase in their resources. However, we do not wish to-day to criticise these or any other of the proposals of the Royal Commission in detail. Instead, we shall have the temerity to set forth what seem to us the true principles in regard to local taxation, and to point out that unless these prin- ciples are kept in view we shall never have a really fair system of local taxation. The first principle to remember in local taxation, as indeed in all taxation, is that each inhabitant of the locality taxed should be asked to con- tribute to the common needs in proportion to his ability. That sounds a proposition to which every one will assent. Yet, in fact, it is the last thing which we do in regard to local taxation. Instead, we ask people to con- tribute in proportion to their possession of certain special forms of property,—i.e., houses, business premises, lands, tithes, coal-mines, and underwoods, but not any other forms of property. We act, that is, as if a man could only be rich in respect of these special forms of wealth. But this is too foolish to be done without con- cealment. Therefore we pretend that the houses and the land and the coal-mines, &c., pay the taxes, and not the men in. respect of them. We say that rates are an heredi- tary burden on the land, and that the rates arise out of the land, as if they were a kind of beautiful flower that sprung out of the furrows ready to be gathered by the rate-collector as he passed. Of course that is nonsense. The earth, or the cowshed, or the underwood has not got a breeches-pocket out of which it can produce a tax. The only thing, animate or inanimate, that can have a purse or a pocket and pay a tax is a human being. A human purse, pocket, or banking account is the only thing out of which a tax or a rate can arise. The man, not the thing, pays. But the amount which a man pays can of course, and does, vary. How is it to be measured ? The philosopher says in proportion to the man's wealth. The Rating Acts say, as regards rates, in respect of his houses, lands, business premises, tithes, coal-mines, and underwoods, but in respect of no other part of his property. Is there any way of correcting this ? Is it possible to find a better means of measuring a man's total wealth than the possession of the things just enumerated ? We think it is. We would measure it by his dwelling- house. We hold that the size and value of a man's dwelling-house, if and when it is fairly valued, is as a rule proportionate to his wealth, and the best rough gauge of his wealth. Therefore for local purposes every man, we hold, should contribute in respect of his dwelling- house alone,—i.e., we would make that the gauge of his wealth. Then the rich man with a fine house, and no land, and the poor man with a small house and a good deal of land or large business premises, would contribute in a rough pro- portion to their wealth. Now the poor man with the small house and a good deal of land or large business premises is certain to contribute a vast deal more to the common needs than the rich man with a fine house and no land. We admit, of course, the difficulty of levying rates only on dwelling-houses and letting off all land and all business premises in town and country, but it will not help us to solve the problem to hide the fact that under the present system not ability but the occupation of certain forms of property is made the measure of con- tribution.
But if the problem of contribution according to indi- vidual ability were to be solved as we desire, there would still remain over the great question of the need of grants- in-aid from the Imperial Exchequer. The Liberal Home- rulers often talk as if the grants-in-aid were simply due to the desire of a Tory Government to help Dukes and other land- lords. Of course in reality the grants-in-aid were originally given in obedience to the principle which has produced the equalisation of rates in London. The rich districts of the country must help the poor, or the poor districts would either be taxed beyond endurance or else have to abandon the standard of civilisation which we deem necessary for the general welfare of the country. But the only effective way of making the rich districts help the poor is to have some form of Imperial grants-in-aid. The Imperial Govern- ment raises the money from the country as a whole, and then, as it were, gives some of it back to the poor districts. But though the principle is sound enough, it is very difficult to say what is the best method of applying it. There are • three ways. One is for the State to take over bodily, and carry out, certain duties now done by the localities. The second is to assign the produce of certain revenues. The third is to give block-grants. The first of these plans can , obviously only be carried a certain way or local government would cease to exist. The second is bad because it leads to waste,—when a certain assigned tax produces a million extra in one particular year the localities get the money whether they need it or not. The third, then, is, in our opinion, the best system. How is it to be carried out? How are the block-grants to be given so that, while all are helped, the poor districts shall get more help than the rich ? That is a question which we cannot enter upon at the present moment, but we may add that it is dealt with in great detail by Lord Balfour of Burleigh in his Report,—and that these propositions of his, whether they are accepted or not as a whole, must be admitted to be among the most valuable things in the Report.
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