PRINCIPLES OF TAXATION

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creation. The latter policy, which has been followed in many parts of our present financial system, is like that of plucking unripe fruit, or cutting green corn. It is to divert the sources by which the industry of the nation is nourished, and to destroy the germs upon whose fructification its income depends. Of this mischievous nature, besides the taxes already mentioned, are those on marine and fire insurances, a portion of the stamp duties, the duty on advertisements, and that on newspapers.

Customs duties, not so high as to encourage smuggling, when levied on articles of import, not used as the materials of subsequent industrious ope→ rations, nor entering into the category of necessaries of subsistence for the labouring population, form one of the most legitimate sources of a national revenue,-certainly the most easy of col lection, and the most willingly paid. But heavy duties on articles in such general use, and approaching so closely to the character of necessaries, as tea, coffee, sugar, currants and raisins, and some others, are not only destructive of the comforts of the people, but actually less productive sources of revenue than they would be if materially lightened.

Excise duties, if levied solely on articles of luxury, as spirits, (we cannot admit malt, beer, or soap into this list,) are perhaps advisable; as are certainly the assessed taxes on servants, carriages, horses, dogs, and sporting licenses. The windowtax and house-tax are so unpopular that the government will be compelled to take them off; although, if fairly levied, they were by no means

the most objectionable imposts on the statutebook.

The taxes we have mentioned fall upon the consumers of luxuries, that is, upon the wealthy. And inasmuch as they are more readily and willingly paid, they are preferable to a direct tax upon income. But since such taxes on the expenditure of wealth are not found sufficient to provide the whole of the necessary revenue, it is surely far more advisable to supply the deficiency by a direct tax on income or property, than to continue those obnoxious imposts by which the production of wealth is impeded, and the poorer classes oppressed. A tax on income has the great advantage over all other taxes of making the absentee who consumes his income abroad on untaxed commodities, and the miser who hoards his income without spending it at all, contribute something at least towards the expense of protecting their property; an expense which is now unjustly placed upon others.

The only true justice in taxation is that every one be made to pay in exact proportion to his means; and this is to be more accurately effected by a tax on income than any other. Such a tax admits of graduation, which is essential to the adjustment of taxation to the facility of payment. To a man who expends an income of 2001. a-year it will certainly be a far greater sacrifice to pay a given percentage on his expenditure, than to one who expends an income of 20007., and the latter suffers more from such a tax than one who expends 20,000l. per annum. Taxes on expenditure, or indirect taxes, press on this account with the greatest severity on the least wealthy classes,

OBJECTIONS REFUTED.

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The principle of graduation was admitted in the income-tax levied during the war; from which all incomes below a certain amount were exempted. It is clear that the same principle which wholly exempts the lowest class of incomes, requires the partial exemption of the class only a little removed above them, and so on, in a progressive scale. The same principle has long been recognized and acted upon in the assessed taxes, on houses, windows, horses, carriages, servants, &c. as well as in the stamp duties. Far from being a novelty, therefore, (as might be supposed from the outcry raised against the proposition when applied to a property tax,) it is the established principle of all. our direct taxation.

It is objected that a graduated income-tax may be so framed as to reduce all incomes to one level; but this is an objection only to an excessive and too rapid graduation. It might as reasonably be objected to the principle of taxation, itself, that, if carried to excess, it would absorb all property.

The argument sometimes urged against a property-tax, that it will check the accumulation of wealth and drive capital abroad, vanishes when it is recollected that it would be imposed in substitution of other existing taxes on industry and expenditure, which are much greater impediments to the employment of capital and the accumulation of wealth in this country.

Not the least of the advantages of a propertytax is, that it would probably lead, before long, to the extinction of a part of the national debt, according to some such plan as that of Mr. Heathfield,

It would be difficult to imagine the relief that must be afforded to the productive industry of Britain by the removal of a large portion of this heavy burden upon its annual returns.

On these grounds it is to be hoped that the present liberal and enlightened government will, without delay, introduce a system of direct taxation in lieu of the malt and house taxes, and others which still press on productive industry or the comforts of the poor. Lord Althorp and some of his colleagues have lately expressed themselves favourable to the principle of such a mutation of taxes, and we are sure that it is a change most anxiously desired by the great body of the people. The details of the tax, the proportions in which it should press on income from permanent and from perishable property, from capital embarked in trade, or in professional skill, &c.-and the question as to its scale of graduation—are subjects on which we cannot find space to enter.*

The sooner such a commutation takes place the better. The masses are become aware of the disproportioned pressure of the existing taxation upon them. The simple and undeniable proposition that taxes on articles of consumption are paid by the consumer, makes itself easily sensible to their capacity. They are no longer unacquainted with the amount of the taxes paid by them on many of the principal articles of their consumption,articles approaching to the character of necessaries of life—malt, hops, tea, sugar, coffee, cur

*Mr. Sayer's volume "On the Justice and Expediency of an Income or Property-tax," contains valuable materials for the decision of these points.

REQUIRED BY THE PEOPLE.

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rants, soap-and these taxes cannot much longer be maintained at their present rate. It would be the part of a wise government to anticipate the wants of the people it rules over, and not, as has been too much the practice hitherto, to delay just and reasonable improvements until they are extorted by the threatening attitude of an exasperated people. Early reforms," said Mr. Burke, " are arrangements between friends ;-late reforms are capitulations with an enemy.'

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The general anxiety lately evinced for a reform in parliament was founded on the expectation that it would immediately lead to a great reduction,— if not in the amount of taxation,—at least, in its pressure on the industrious classes. But direct retrenchment has been already carried almost to the extreme margin of security for the efficient discharge of the public services. There remain scarcely any means of lightening the pressure, but by a shifting of a part of the burden from the shoulders of the poor and the industrious to those of the wealthy and the idle. The repeal of the property-tax in 1815, was a flagrant abuse of their power by the higher classes. Now that the power has left them, and been transferred to the middle class, the balance must be restored, and the injustice redressed.