TOPICS OF THE DAY.
THE BUDGET.
MR. LOWE has produced a modest, respectable, common- place Budget, in a modest, respectable, commonplace fashion. He has not tried to do anything brilliant, and he has carefully avoided saying anything brilliant, and he has had a great success. The House of Commons, despite a few disappointments, was thankful, and the country will be pleased. Everybody will feel that in the main he has done what he was expected to do, and that as regards the small margin of free choice left to him after he had taken off the objectionable twopence on the Income Tax imposed last year, he has used his freedom with some judgment and perhaps grace. For our own parts, we could have wished that the principle which both the Liberal and Conservative chiefs have sanctioned—in their moments of virtue—of providing for the reduction of Debt in years of great prosperity by some more powerful expedient than the strategem of undervaluing the expected increase in the growth of the revenue, should have had a substantial recognition ; but we are quite aware that a Government which has outlived its first popularity, and which is beset by critics and supporters like the senior Member for Brighton, who scold it not only for every addition to the taxation, but for every symptom of a prudent desire to anticipate the worst as regards receipts, can hardly be expected to live up to the chivalrous hopes of its youth ; and the best we can expect of it is to provide a fair prospect of a surplus which may be applied in the reduction of Debt next year, by resolutely resisting Mr. White's invitation to leave no margin as an insurance fund against the disappointment of uncertain, though, it may be, reasonable hopes. It would be absurd to quarrel with Mr. Lowe for taking off this year the Income-tax 2d. which he imposed last year, avowedly as a temporary resource ; or to call this a "rich man's" Budget because he has made it his first care to rid the middle-class of a special and temporary burden ; you might just as well say that if, in the failure of adequate rolling stock you had crowded the first-class railway carriages of an excursion train with one or two extra passengers apiece, it would be a special act of subserviency to the rich to relieve these carriages of the extra passengers before thinning the second and third class, which had only their ordinary complement of passengers. Whether it might not be fair to contend that the redemption of Debt, as it is a duty by universal admission specially obliga- tory on those who live in prosperous times, is also specially ob- ligatory on those who enjoy the prosperity of those times, and hence that any tax intended specially for the redemption of Debt should fall solely on the prosperous classes, we will not ela- borately argue here ; but we should like to throw out to Mr. Lowe and future Chancellors of the Exchequer, that it would be easier to get the House of Commons to assent to a regular tax for the payment of Debt, if it constituted a fund set apart for that purpose, and were not imposed on any who are enjoying so few of the blessings handed down from our ancestors that it is unfair to ask them to undergo a sacrifice for the benefit of posterity. A tax for the redemption of Debt ought certainly to be a prosperity-tax, so far as it is possible to obtain such a tax. Now, it is obvious, from the readiness with which the House of Commons welcomes the exemption of all incomes below £100 a year from income-tax, and also Mr. Lowe's very fair proposal to deduct £80 a year (as the minimum income on which it is possible to live) from all in- comes under £300, before calculating the income for the pur- poses of income-tax, that the principle of taxing narrow means at a lower rate than liberal means is already virtually admitted, and even growing in popular favour ; and from this axiom to the deduction that the duty of diminishing the harden of Debt to be left to our children should be discharged exclusively by the comfortable classes, as well as in comfortable years, is not remote. It is obvious that the strength of the outcry against providing for the diminution of the Debt lies in the pressure it imposes on those who are hardly able to make both ends meet. Why not, then, while steadily resisting the principle of a progressive rate of income-tax for ordinary purposes, impose a special moderate tax on incomes above a certain level, the whole produce of which should be applied to the re-
duction of the Debt In this way, if in any, the virtuous resolves of leading statesmen on both sides of the House might be realized without provoking the cry that we are increasing the agonies of grinding poverty in this generation for the relief of the possible poverty of another. Mr. Lowe was cer- tainly justified in taking off this year the income-tax 2d.. he had imposed, for strictly temporary purposes, and in excess of the fair balance of taxation on the middle-class, last year.. He was more than justified, praiseworthy, when he proposed to raise the amount of the deduction from £60 to £80, and to allow the deduction of this £80 from all incomes under £300, in order to arrive at their taxable values. But it is per- fectly clear that the same principle which offers special exemptions to the struggling classes possessing less than. £300 a year, would warrant the imposition of special obligations on the easy-going classes with incomes (suppose), above £600, nor can there be any question but that the obligation of diminishing the burden of Debt on our potterity is an obligation precisely of that kind.
When Mr. Lowe takes credit for redeeming £12,0W,000 of Debt since the present Government came into office,. as well as for increasing the balances in the Exchquer, it must not be forgotten that his anticipation of a whole quarter's income tax, and his very inconveniew plan for getting all the assessed taxes, as well as the Mame tax, paid in January, have materially tended to both these remits, —i.e., to surplus revenue and to a full Exchequer at the eik of March; at any other time, his balance would hardly aye compared so favourably with the balances of his predecesson It ought to be remembered, too, as regards the payment of lobt, that the Government have found it necessary to raisethe sum for building barracks by loan, i.e., by terminable equi- ties. Mr. Lowe's proposal to halve the duty on ciee, seems to be warranted by the most obvious principle of financial wisdom. It is clear that the consumptiot is diminishing instead of increasing under the present duly,end
though that may be due to causes over which taxationbai no influence,—to the astounding unteachability of oueople as to the proper mode of making coffee, which ever ation on the Continent knows how to prepare better than do,—
yet it is plain common-sense to try what a diminution I duty will do to give a renewed elasticity to this branch of 4enue..
The proposal as to the inhabited-house duty seems toirivial to need name. We should greatly have preferred an lemp- tion of shepherds' dogs from taxation, and some comssion
allowing farmers to use horses bond fide employed iragri-
culture for family purposes. People who can keep. houses and offices which they do not inhabit, are jrdly proper subjects for special remissions of duty.
Mr. Lowe's statement was complained of, not only fo ling a rich man's budget,—which it certainly was not, in 1 if
Mr. Lowe's remark that £650,000 additional had, las ear and this, been voted for education be taken into acco , it will appear that the taxation pressing on the poo has really been greatly diminished, while the special expencI,urs of revenue on the poor has been considerably incr d, —but for general extravagance. Mr. Bright is 4ten quoted as having laid it down that a government web. cannot govern for less than £70,000,000 a year, is ea that ought not to be trusted to govern the Unite Kingdom. Now it is perfectly true that Mr. Lowe'e estimate of expenditure for 1872-3 is still £71,313,00, and that he expects a certain number of supplemen estimates to be required as usual, further to increase tzs expenditure beyond that figure. But it is absurd to calk this the real measure of expenditure. Many of the items in- cluded in it are, in the most direct way, reproductive outlays, which earn much money for the country instead of costing it anything. The post office, telegraph, and packet services, for instance, which appear to swell the expenditure by over £4,000,000, really earn above £1,400,000 net for the relief of the taxpayer, so that the true expenditure on government is at the very most above five millions short of what it seems, somewhere about £66,000,C00, — the taxpayer, moreover, having all the benefit of services so cheap that only the. State could have provided them at that rate and in such excellence. Further, as the interest on the Debt alone takes up over £26,000,000 of the remainder (a sum which no Government, however economical, can reduce except very slowly), we may fairly say that this great country is governed, and very fairly governed, for about £40,000,000 per annum, or for less than 26s. a head. Considering that Prussia herself, the most economical State in Europe, spends, after de- ducting the very small interest of her debt, about £22,000,000 a year on Government (close upon 20s. a head, on the Prussiaa population of 24,000,000), that England has a great Navy to keep up to set off against the cost of Prussia's much larger Army, and that almost everything in Prussia is at the lowt
level of European cost, while almost everything in Great Britain is nearly at the highest level,—we do not think that any good judge of matters financial will say that Great Britain is governed at an extravagant expense. The most remarkable feature, however, in a fortunately very unremarkable Budget consists, not for the first time, in the won- derful evidence which Mr. Lowe's facts bear to the financial tact and sagacity which British Parliaments and British Finance Ministers have evolved between them. Consider only this fact, that the taxation which is imposed on the alcoholic drinks of the country,—and imposed (if we except ale and beer at least) with nothing but benefit to the population, as nearly as possible defrays the cost of our Army and Navy ;—while the tax (Customs and Excise together) on spirits solely, much more than covers the greatly bewailed cost of our Army, even as that is increased by the large annual sum we are paying for extinguishing Purchase. More than this, Mr. Lowe tells us that the gain to the revenue from a year of prosperity even in the consumption of the single article of British spirits is (in one respect unfortunately, in another most fortunately, for almost every penny so obtained is a fine on intem- perance and self-indulgence), over a million sterling, an increase depending, no doubt, entirely on the rise in the wages of the working-class, and the consequent expenditure on their favourite luxury, just as the extraordinary rise of a million sterling in the stamp duties,—and that, too, in the face of a great lowering of those duties,—unquestionably represents the rise in tho gains of the middle-class, and their consequent outlay on those business transactions to which their happiest hours are devoted. It is hardly possible to conceive a system of taxation more light and skilful than one which gets enough to pay for the Army and Navy of the country out of what would in all probability—if we may judge by the wonderful increase in the drinking power of the country which every accession of prosperity shows—be spent on more drink, if it did not go into the Exchequer ; and which presses so gently on mercantile interests that a year of prosperity adds an eighth to the yield of the revenue arising from taxes on mercantile transactions and transfers of land, notwithstanding a very great reduction of the burden on each transaction. Or take this other measure of the tact of our financial system,—that under it the yield of a penny tax on every pound of income has risen within only ten years from about £1,100,000 to about £1,666,000, or more than 50 per cent.,—which means either that the middle-class of the United Kingdom has an income half as much again as it was, or that it is partly honester and partly richer (the honesty, no doubt, varying to
some extent with the wealth, i.e., varying inversely as the temptation to dishonesty) to the same amount. A financial
system which admits of progress in the wealth and integrity of the middle-classes in a single decade so rapid as this, and which presses, so far as it presses, on the really poor, far more at points where that pressure is beneficial than where it is injurious, namely, on the appetite for tobacco and drink,—the tea, sugar, and coffee duties together do not amount to nearly a penny a week a head on the whole population,—must be admitted to be one of which English politicians have some reason to be proud.
Previous page
