cussed the causes of "the unusual and generally prevalent depression and distress," found the secret to consist in the system of taxation, of which "the consequences are such as might be fairly calculated upon the impoverishment of the lower classes, and the accumulation of wealth, in masses, amongst the aristocracy." He maintained that "the antidote to this glaring injustice is the substitution of an equal property tax sufficient for the exigencies of the State, in lieu of all existing taxes." In reality, his scheme was a combination of a property and an income tax, and when he came to discuss the objection on account of its "inquisitorial tendency," he concluded that "the good effect resulting from every individual examining the real state of his affairs annually, would overbalance the obnoxious nature of the enquiry, and would prove a most salutary measure to the commercial interest." 2 § 2. The Unrest, 1832-1842 The political revolution of 1832 could not fail to turn public attention to the fiscal question. In this discussion the income tax at first played a considerable rôle. In the year 1833, the question of a graduated property tax was brought up in parliament by Robinson, who moved on March 26 for a Select Committee "to consider and revise our existing taxation, with a view to the repeal of those burthens which prey most heavily on productive industry, and a substitution of an equitable property tax in lieu thereof." This led to a warm debate, in the course of which Joseph Hume made the rather startling statement that "all taxes are confiscation, and the only question is, which is the least oppressive mode of confiscation." Lord Althorp, who, as we know, had manifested no particular repugnance to the income tax three years before, now opposed the motion, which, nevertheless, received 155 votes in favor, compared to 221 against. As a result, a veritable flood of 1 The Property Tax the only effectual Remedy for the present Embarrassment of the Country. Birmingham, 1832, 2d ed., p. 4. 2 Op. cit., p. 7. pamphlets now appeared. Richardson boldly advocated what he called "equalizing taxation, -i.e., throwing off from the shoulders of the poor, the weight of taxation on to the shoulders of the rich, who ought to bear it." A fiery appeal to the working classes favored a similar plan, declaring that "an equitable property tax means a property tax, the percentage of which shall increase with the amount of property taxed."2 A more important disputant thought that the new popular control of parliament would render it possible to levy, at all events, a tax on permanent income, or what he calls "realized capital," in lieu of the corn laws. He objected, however, to a graduated tax on the ground that "any distinction between different classes would cause much confusion and jealousy." Heathfield, in a temperate essay, discussed the arguments of Poulett Thomson and Lord Althorp, who were now opposed to Robinson's motion, declaring himself also in favor of an income tax, although demurring to the principle of graduation. Pebrer, a Spaniard, who wrote a bulky work on English finance, contented himself with advocating a tax of nine and one-fourth per cent on all incomes except the 1 Unequal Taxation, the chief Cause of the Misery now suffered by the industrious and middle Classes of Society; and its Remedy, a Graduated Tax upon Property. 3rd ed., considerably enlarged, with a Table showing the Inequality of Taxation. By James Richardson. London, 1833, p. 9. 2 British Taxes Dissected. Being a Plain Letter addressed to the Workingmen of Great Britain and Ireland; explaining how fifty Millions are yearly raised, who pay these fifty Millions; how they ought to be raised, and who ought to pay them. By One of the Council of the National Political Union. London, 1833, P. 13. "So long as the House of Commons did not truly represent the feelings of the people, and men of property and rank alone had the control of Parliament, it was needless to hope for a tax on property. . . . So obnoxious, indeed, was the very term 'property tax,' that it was never even alluded to but in the most delicate manner." - Tax on Capital and Fixed Duty on Corn. London, 1833, pp. 3, 4. Op. cit., p. 9. Cf. the pamphlet Reflections on a Graduated Property and Income Tax to raise the sum of £17,822,000. By Edward Jones. London, 1833. 5 Observations occasioned by the Motion in the House of Commons on the 26th of March, 1833, by George R. Robinson, Esquire, for a Select Committee, etc. Addressed to the Landed Proprietors of the United Kingdom. By Richard Heathfield, Accountant. London, 1833, pp. 9, 12. wages of labor;1 while Vaux preferred a property tax on all land and personal property. "The fund-holders," Vaux sagely remarks, "cannot bear to hear a property tax mentioned; but at this no man can be surprised, who reflects that it is the only tax whatever, that can make them contribute as much as others to the necessities of the state."2 Another writer who was especially interested in repealing the indirect taxes, advocated either a property or an income tax, leaning, however, on the whole, to the latter, "incomes being more easily estimated than property, and the difference between a property tax and an income tax being more in name than in reality." Some authors, however, like Easton, who still had their doubts as to the advisability of an income tax, were content to renew the old recommendation for a house tax.4 "3 The most elaborate attempt to advocate the income tax was made in a large volume written by Benjamin Sayer, an official connected with the original income tax.5 Sayer begins by stating that he "is anxious to be understood throughout his attempt in the comparative sense only, not as denying that the income or property tax is attended with evils such as arise from other taxes in general, but as attributing 1 Taxation, Revenue, Expenditure, Power, Statistics and Debt of the whole British Empire. Their Origin, Progress and Present State, etc. By Pablo 2 Relative Taxation; or Observations on the Impolicy of taxing Mall, Hops, Beer, Soap, Candles, and Leather; with a view of the Manner in which the Duties imposed upon them affect the different Kinds of Land, whether in Grass or Tillage, and their constant Tendency to increase Pauperism; with Reasons for Substituting a Tax on Property, etc. By Thomas Vaux. London, 1833, p. 228. 3 Outline of a Plan for amending the System of Taxation. Birmingham, 1833, p. 8. 4 A Plan for Commuting and Abolishing Taxes on the Necessaries of Life, and All the assessed Taxes, to the Amount of £25,000,000 per Annum, etc. By Josiah Easton. Taunton, 1833, p. 5. An Attempt to shew the Justice and Expediency of substituting an Income or Property Tax for the present Taxes, or a part of them; as affording the most Equitable, the least Injurious, and (under the modified Procedure suggested therein) the least Obnoxious Mode of Taxation: also, the most Fair, Advantageous, and Effectual Plans of reducing the National Debt. [By Benjamin Sayer.] London, 66 to it a less degree only." He contrasts the existing system of taxation - both the indirect taxes on expenditure and the direct taxes on "use," like the land taxes and the assessed taxes with the income tax, from the point of view of abstract theory, of administrative procedure, and of what he calls excess of taxation"—a threefold phenomenon, according as it involves the individual giving up more than the treasury receives, or more than his industry can replace, or more than it is just or necessary for the government to take. In all of these respects Sayer gives unqualified preference to the income tax. Discussing the chief objection attributed to it, namely, the exposure of private affairs, he maintains "that persons who do not carry on trade speculatively, but prudently, do not dread an exposure of the state of them." 1 And he sagely adds, "It might be doubted whether the feeling against publicity of income did not in some cases proceed from the apprehension that when taxation was to be taken from income, publicity would prevent or disclose that evasion which there was a disposition in those cases to commit." 2 Sayer is fully aware of the general feeling against the tax, due largely to the preference of old over new taxes. But he takes occasion⚫ to point out that "the excise, at its first institution and long afterwards, was as much reprobated as the income tax has been; and considered even more odious, although now people have become quite accustomed to it." He thinks that those who will suffer by a change to an income tax are chiefly misers, absentees, and smugglers. Sayer takes up in detail the various possible modifications of the old income tax which experience might suggest, and he discusses with considerable fulness all manner of possible projects. Among the topics treated are such points as graduation, differentiation, taxation of realized property only, taxation of capital instead of income, taxation of trades and professions, the capitalization of income, and a composition of the tax. Sayer's 1 Op. cit., p. 32. 3 Op. cit., p. 101. 4 Op. cit., p. 103. volume, in fact, is a veritable arsenal of arguments on both sides of almost every scheme that has ever been advanced in connection with the income tax. A full description would require a chapter by itself. We must content ourselves with his general conclusion "that whatever degree of evil there be in taxation is less to be obviated or mitigated by reducing the amount of it, than by changing the system or raising it, that is, by adopting that more equal, more certain, and less injurious mode of transferring the exact amount of income due from the payers to the receivers of it, which the direct tax on income most palpably presents." 1 Shortly afterwards Buckingham, who was now in parliament, again brought the matter up, and introduced on July 2, 1837, a motion for a committee to consider the advisability of creating a graduated property or income tax, with which to liquidate the national debt. Buckingham stated" that a property or income tax was the fairest as well as the easiest of all taxes." 2 He confessed that "when speaking of this subject in private he had been conjured not to let the words 'income tax' escape from his lips in Parliament, as it would drive a large majority from even listening to him afterwards." 3 'Buckingham devoted most of his speech to the attempt to prove the justice of graduation. Lord Althorp in reply again stated that it "was fair debatable ground whether some portion of the tax of this country might not be commuted for an income tax, but he should be very sorry to see Parliament sanction the principle of a graduated property tax." 4 After a short discussion, Buckingham's motion was negatived. In the following year, however, Buckingham put his ideas into writing. He now proposed that the rate should differ according to the 1 An attempt to shew the Justice, etc., p. 356. 2 Buckingham's speech, in which he makes plentiful quotations from Sayer's book, was republished by him after the lapse of sixteen years under the title, Debate in the House of Commons on the Gradual Extinction of the National Debt, and on the true Principle of a Property and Income Tax. Republished for comparison with Mr. Gladstone's Financial Proposition. London, 1853. See esp. p. 15. 3 Op. cit., p. 19. 4 Op. cit., p. 29. |