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tion of the income tax! The condition of our charities has for thirty years, more or less, attracted the attention of the Legislature. The Crown has issued Commissions and Parliament has appointed Committees, the labours of which have been eminently judicious and useful. I should doubt, therefore, under any circumstances, whether it was necessary or expedient on the part of the Government to call public attention to the character of those institutions with a view to any change in their management or character. But if the Government are of opinion that those endowments are so injurious to the public weal; if they think that the statement of the Chancellor of the Exchequer is justified by the facts; and that this is a question which demands our immediate and careful attention-though there is nothing to justify such a conclusion in what we see at present-they should have brought the subject forward in such a shape' that we might have dealt with it in a satisfactory manner. It is totally inadequate to hold out to us as a sufficient means of remedial agency that we should apply the income tax to those institutions."

These arguments, addressed to a House already strongly prepossessed against the proposal of the Government, proved irresistible, and Mr. Gladstone announced before the conclusion of the debate that it would not be consistent with the intentions of the Government to press the measure against the evident disposition of the House. Although their own opinions were fixed and clear, yet in deference to the feeling with which it was manifestly regarded, they would withdraw their proposition.

That the decision of the Ministers under these circumstances was a judicious one there could be little doubt. To have persisted in a proposal for which the country was not prepared, and to which the repugnance of a considerable majority of the House of Commons was palpably manifested, would have been to court defeat. At the same time, although the speech of the Chancellor of the Exchequer had failed of its object, there were many, both in the House and out of it, upon whom his striking exposure of the abuses of endowed institutions, and of the mischiefs resulting from ill-directed and indiscriminate beneficence, produced a powerful effect. They felt, indeed, that such evils required a more searching and vigorous treatment than the mere fiscal imposition with which the Government had proposed to saddle them, and that a duty of 7d. in the pound upon the incomes of institutions, which either in their principle or their management were vicious, was a very inadequate and inappropriate kind of remedy.

Relieved of this difficulty, the remaining portions of Mr. Gladstone's financial scheme encountered no obstacle. The reduction of the tea duty and the modifications in the income tax were passed with general approval. The Session, however, was not suffered to pass without a revival of that controversy which had been so incessantly agitated both in Parliament and by the public press since the

original proposal of the measure by Sir R. Peel, with respect to the justice of subjecting both permanent and temporary incomes to the same assessment. A Select Committee of the House of Commons, appointed on the motion of Mr. G. Hubbard, one of the members for Buckingham, had in the Session of 1861 made a full investigation of this question, and had finally reported their opinion against the expediency of introducing any distinction of assessment between the two classes of incomes. Mr. Hubbard, however, had been neither convinced nor satisfied by the arguments which prevailed with the Committee, but had on all occasions asserted his own confident assurance in the soundness of the principles for which he contended. In the present Session the same hon. gentleman submitted to the House of Commons a Resolution in these terms:

"That the incidence of an income tax touching the products of invested property should fall upon net income, and that the net amounts of industrial earnings should, previous to assessment, be subject to such an abatement as may equitably adjust the burden thrown upon intelligence and skill as compared with property."

He contended that the unpopularity of the tax arose from its not being founded upon any principle; that, whether it was to become a permanent source of revenue, or to be reserved for exigencies, it was equally the duty of the House to base the tax upon a definite and acknowledged principle. After adverting to the objections which had been made to the practicability and the soundness of the theory embodied in his Resolution, he entered minutely into details as to the mode in which, under his theory, the tax would operate upon various species of property, replying as he went on to the arguments which had been urged against it by the Chancellor of the Exchequer, especially that it was hostile to the landed interest, and he fortified the proposition contained in the latter part of his Resolution by authority and examples. In conclusion, he maintained the practicability of his theory; he denied that it would create, as alleged, new inequalities and grievances, and he repudiated the charge of aiming at class legislation, meaning, he said, nothing more than to put before the House a simple principle as a basis for the tax.

The CHANCELLOR of the EXCHEQUER observed that Mr. Hubbard appeared as the advocate of a particular plan-not as a reformer of the income tax in general-casting aside the plans of previous reformers. His plan he supposed to be, in all essential points, perfect and invulnerable, whereas he (Mr. Gladstone) pronounced it impracticable and visionary. He did not stand upon the perfect structure of the income-tax; but its inequalities and anomalies had at least this advantage-that they were in some degree understood, and the back was adapted to the burden. If, however, the plan proposed by Mr. Hubbard were adopted, it would only shift the tax from one

set of anomalies to another, and for one class of evils substitute a greater. He reminded the House of the inquiries which the subject had repeatedly undergone, and that opponents of the tax, when they looked at it closely, discovered that, though not perfect, it was unwise to initiate changes that would encourage hopes and expectations not to be realized. Observing that Mr. Hubbard's plan had been rejected by his own Committee, and his motion negatived last Session by a large majority, Mr. Gladstone examined the details and operation of the scheme, and repeated what he had said on the last discussion, that it really proposed to put the hand into the pocket of one man, and transfer the money taken from it into the pocket of another.

"Now what," asked the right hon. gentleman, "is the principle of my hon. friend? He claims privilege for what he chooses to call industrial incomes. There is some degree of fallacy in that expression. Industry in this country is exempt from the income tax. I do not know that this exemption can be said to rest upon any very broad or clear principle, but for my own part I think it may be justified by two considerations-first, that I believe it to be visionary to dream of levying income tax from the bulk of the labouring classes, and next, because, as far as I am able to judge, under the system of taxation now existing, the labouring man, although exempt from income tax, pays at least a very fair, perhaps a rather full, share of taxation; but as far as the income tax is concerned, industry, properly so called, except a limited portion of the more highly skilled mechanics, is exempt. My hon. friend means the profits of educated men in professions, or some of them, and he likewise means the exercise of industry and intelligence in combination with capital. I want to know upon what principle my hon. friend gets to this particular distinction, as different amounts of taxation are to be taken from different people, not according to the revenues they possess, which is an intelligible principle, not according to their poverty, which is an intelligible principle, but according to the degree in which industry and capital are mixed up together in making the income. My hon. friend propounds this as the foundation of his system, but in my opinion a more dangerous principle it is not possible to conceive. Those whom he desires to relieve are the class whose fortunes are in the most rapid state of progress and increase. Those who are needy in proportion to the station they occupy my hon. friend leaves untouched, or rather he subjects them to additional burdens in order to give a great relief from taxation to a class whose fortunes are in the most rapid state of augmentation. But how does he think, when he has established his claim on behalf of what he calls industrial incomes, he will be able to shut out those who are disposed to recommend other principles? He will, no doubt, be shocked when I say that, in my opinion, more is to be said in favour of graduated taxation than for his plan. A graduated taxation recognizes poverty in one class, and overgrown wealth

in another, and justice demands that one should pay less and the other more. There is something rather plausible in that principle, more so than in my hon. friend's plan. He takes a widow, with 2007. a year from the funds, with six children to educate, to train, and to start in the world, and he takes the case of a great merchant -I will not say brewer or banker, as there seems to be some objection to specifying those flourishing classes;-but to a great merchant, with 20,000l. a year, he grants a relief to the extent of one-third, and in order to do that he adds twenty-five per cent. to the burden of the poor widow. I protest against the principle of my hon. friend. It is one, in my opinion, which, when care. fully examined, is much less plausible, and at least as dangerous as the principle of graduating taxation. It has been said that I appealed last year to the gentlemen opposite. I am not aware that I appealed to the gentlemen opposite in particular. I appealed to the whole House, and I trust they will have the justice and the manliness now to repeat the vote which they gave on that occasion. Some justice and some manliness I think it requires, because I do not deny the faults and flaws of the present income tax. I do not deny that a feeling has existed, does exist, and I believe will always exist, among considerable portions of the community in the direction of the motion which my hon. friend has made. Neither do I deny that such a feeling is entirely natural. But I do say that when the real merits of the case are examined, when investigation is made of broad practical issues, such as I have only endeavoured in one or two cases to exemplify, but which were more fully and sharply brought out before my hon. friend's Committee, the danger involved in my hon. friend's principle will be apparent. The danger, moreover, will be obvious of agitating subjects like this, and of substituting vague expectations in the minds of the community,-expectations which only end in taking money from one man to give it to another, for those rational hopes of reduction which never can be realized by my hon. friend's plan, but the realization of which must entirely depend on the adoption of judicious economy, and the consequent application of sound principles to the relief of the public."

The Resolution moved by Mr. Hubbard was negatived by 118 to 70.

Another attempt to induce the Chancellor of the Exchequer to make a modification of the income tax, was made by Mr. Roebuck, who urged with much force the consideration of the case of professional men, whose precarious incomes might in a moment be swept away by accident or sickness, allowing no provision to be made for their families. He said,

"The great mass of the taxation of the country is not derived from your millionaires or men of thousands, but from your men of hundreds. For the present I will direct my consideration to your men of 2007. a year. A man of this class has to maintain

appearances; he has to bring up his family, and to provide for them in case of his death. If he derives his 2007. a year from a permanent source, it remains; but I come to a case on which I speak with feelings arising from personal experience. I ask you to consider the case of a man earning an income by the labour either of his intellect or his hands. All at once the intelligent mind or the cunning hand of that man may be rendered powerless. He then can do nothing; and from being a bread-winner he becomes merely a bread-eater. The man with a permanent income has no thought on his mind that there is a probability or a possibility of his family being reduced to want; but that is a thought which from morning to night and night to morning works on the mind of a man with an income of 2007. a year from precarious sources. There are thousands of our countrymen in that position. To meet such cases, I ask the Chancellor of the Exchequer to do what a colleague of his, now dead, Mr. James Wilson, proposednamely, to divide incomes into three classes:-First, income derived from capital; secondly, income derived from trade, in which both capital and ability are used; and, thirdly, income derived from mere labour, either of the intellect or the hand. It is not just to tax those three classes alike. Suppose the case of a lawyer. He goes through a laborious education for a great period of his life-say up to the age of fifty. That man fights against the world for his very existence; and as he arrives at the age when fortune may smile upon him he comes on a high tide of business. But, after a few years of prosperity, he is suddenly stricken down; and then he is a burden to himself, and his children are unprovided for. It may be said that the alteration I propose would do away with the surplus. I dare say it would; but I have such confidence in the financial ability of the right hon. gentleman, that I feel certain he could raise an equal amount of money in a much less unjust manner. I ask him to do but justice, which is in his power, and not add to the miseries of the man, who by his labour, intelligence, honour, and integrity earns from a precarious source an income for the support of his family."

The CHANCELLOR of the EXCHEQUER said Mr. Roebuck had made himself the organ of expressing a feeling which always would prevail as long as the income tax should exist. Though unable to accede to the motion, or to become an instrument to give effect to the resolution, he could not shut his eyes to the anomalies and difficulties attending the tax; but in removing one or two anomalies, three or four would be introduced. He admitted that if it were possible to meet the case of professional men, their case was the strongest, as they were in a different position from tradesmen; it was so difficult, however, to determine the professional criterion that at the first attempt to apply the principle it would break down. Some might be included in the professional class who had permanent incomes, and if all pro

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