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Intolerable Irritation caused by Schedule D. troublesome extent, can enable the collectors to prevent fraud where fraud is intended. Not only therefore does the tax fall heaviest on the most conscientious-the worst species of inequality—but an almost irresistible temptation is held out to subtle casuistry, to self-favouring decisions in all cases where the shadow of a doubt exists, to all those petty tamperings with integrity which gradually sear the tenderness of the moral sense, and pave the way for bolder and larger infractions of justice and of law.* The surveyors and commissioners feel themselves baffled by the deliberate and consistent assertions of the steady knave, and they repay themselves by subjecting the honest tradesman to an amount of vexatious and insulting cross-examination which amounts to absolute persecution. They openly charge him with having made a false declaration-the law gives them power to do this with impunity; they remand him day after day for fresh examination; they require returns of details and particular transactions for three years back, which it is sometimes impossible to furnish, which waste his time and sour his temper: when he either cannot or will not do this, or when, wearied out with contumely and annoyance, he abandons the contest in disgust, they confirm the surcharge which brands him as a would-be but baffled deceiver; and if, from a dread of meeting similar insolence and torture every year, or from feeling that no mere sum of money can make it worth while to submit again to such an irritating process, he consents to compound at the amount thus unjustly assessed, they point to his consent as an acknowledgment of his intended fraud. These cases are deplorably frequent; we speak from long and painful experience, and our own observation has been confirmed by some of the commissioners themselves, who blushed at the amount of bullying and insult inflicted by their colleagues on the unfortunate appellants. Now, a tax which enables the fraudulent to cheat the collector, and the collector to rob the honest, can be rendered endurable and defensible by no amount of supposed theoretical perfection. A tax, too, which leads to so much irritation of

* Defrauding the revenue is too commonly regarded as scarcely a moral offence at all. Thousands will cheat the Exchequer who would on no account cheat a fellow-subject; and the conduct of the Government in upholding, and the language of Sir Charles Wood in defending, a tax so replete with manifold injustices as the existing Income-tax, have done much to promote this misty, oblique, and exceptional morality. We scarcely know any didactic and professorial teachings as to the veniality of fraud to be compared with the speeches of the Chancellor of the Exchequer on this subject. He has repeatedly argued that the Income-tax is just because it is unjust to all that it is so rotten and indefensible in all its details that you cannot meddle with it without risk of its falling to pieces altogether, that he must have the money, that he is cheated more than he cheats, &c., &c. the Chancellor of the Exchequer declares that he cannot help being unjust, the tax-payer will naturally reply that he cannot help being dishonest. If the Chancellor pleads, in defence of an unfair tax, that he must fill his coffers, the subject will reply that he must protect his purse. It becomes a simple battle between extortion on one side and evasion on the other.

If

temper, and so much bitter indignation, that many of those who pay it would willingly contribute, in order to escape from it, double the amount in any other form, is surely open to one of the most fatal objections that can be alleged against any impost. Of the five requirements enumerated above, as characteristic of a perfect tax, a direct tax on income fulfils scarcely one. It is peculiarly and incurably unfair, it is excessively irritating, it is lamentably demoralizing, and, if all things be taken into consideration, it is by no means unexpensive in the collection. Mr. Mill, even, "with much regret," considers the first of these objections as insuperable. "It is to be feared," he adds, "that the fairness which belongs to the principle of an income tax can never be made to attach to it in practice; and that this tax, while apparently the most just of all modes of raising a revenue, is in effect more unjust than many others which are prima facie more objectionable. This consideration would lead us to concur in the opinion which, until of late, has usually prevailed-that direct taxes upon income should be reserved as an extraordinary resource for great national emergencies, in which the necessity of a large additional revenue overrules all minor considerations."* The argument in favour of direct taxes on property and income, which has so often been alleged of late,-viz., that they fall upon the rich rather than on the poor-we have already partially considered. We have shewn that it is at least questionable whether, in simple equity, the poor ought to be so largely exempted from taxation. We have shewn good ground for believing that the poor, in this country and under our existing system, pay less than the rich in proportion to their incomes, and enormously less in proportion to their numbers. We have also shewn that the working classes with us are relieved from all taxation but that which is self-imposed, to an extent which can be affirmed of no other country in the world. We have shewn that our revenue may be said, without exagge ration, to be almost wholly levied either upon property, and chiefly upon the larger properties, or upon luxuries. But on this branch of the question, there is one other very important consideration to be adverted to. Direct taxes are now popular with the masses and their writers, only because the masses are exempted from them. Now, were we to decide upon raising our revenue

*The truth is, that a fair income-tax is a desideratum which is not destined ever to be supplied. After the Legislature has done all that can be done to make it equal, it will still remain most unequal. To impose it only on certain classes of incomes, or on all incomes without regard to their origin, is alike subversive of all sound principle. Nothing therefore remains but to reject it, or to resort to it only when money must be had at all hazards, when the ordinary and less exceptionable methods of filling the public coffers have been tried and exhausted, and when, as during the late war, Hannibal is knocking at the gates, and national independence must be secured at whatever cost." M`Culloch, p. 137.

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A Large Revenue not to be Levied from the Few. wholly or mainly from direct taxes, this exemption could no longer be maintained. A large amount of taxation can never be levied on the few. If, therefore, this plan were adopted, all must pay. In countries where it is adopted, all do pay. In most countries on the Continent, in France, in Germany, where Customs and Excise duties form a far less important part of the revenue than here, there is a per centage levied on all personal as well as real property; there is a capitation-tax, a hearth-tax, a trade-tax, a salt-tax, often a bread and meat-tax, besides the vexatious and burdensome octroi. From these burdens few or none are exempted. And so it would have to be here, were the prospects of the Liverpool financiers adopted. Taxes on luxuries, if they are luxuries confined to the rich, can never be productive. Even a house-tax, if levied on the absurd principle of the new one-which out of 3,700,000 dwellings, proposes to exempt all under £20, or six-sevenths of the number-would yield a most insignificant return. Even an Income and Property-tax, confined to the middle and upper ranks, however heavy it might be, would soon shew the working classes that, whatever be the first incidence of an unfair impost, the due share of it must finally fall on them. By no jugglery of direct taxation can the many, ultimately or permanently, shift their burdens on the shoulders of the few. The rich, like the poor, can neither spend nor pay more than they possess. Nine-tenths of them already live up to their income, or as nearly so as they deem prudent;-in other words, they spend as much as they safely can. Take the case of a man with an income of £1000 a year. He pays, we will say, £200 a year in taxes, direct and indirect; the remaining £800 meets his personal expenditure. He keeps three servants, besides a groom and a horse. A new system of taxation increases his taxes to £400 a year, and of course diminishes his available income to £600. His tea, coffee, and sugar, will cost him less than before, owing to the abolition of customs and excise duties. But the difference will be so slight, that he must diminish his general expenditure materially. He can only do so by paying less wages, or by purchasing less of those articles whose production gives employment to the poor,-i.e., by diminishing that portion of his expenditure which was spent, directly or indirectly, in the payment of labour. He dismisses his groom and sells his horse. His groom in the first place, his saddler and blacksmith in the second, and the farmer who supplied him with hay and oats, in the third, are the sufferers. He gives up wine, and deprives of employment the artisan who used to produce the article of ex

* Much of this is derived from private information sent us by the best informed parties on the Continent. For confirmation, see Laing's "Observations on Europe in 1848 and 1849,"

port which was formerly sent abroad to purchase his wine. He reduces the expenditure of his family in clothes: the tailor, the shoemaker, the spinner, the weaver, the dyer, feel the effect of his increased taxation. They have their sugar, their tea, their tobacco, their beer, cheaper than before; but the poor groom has lost all his means of purchasing these luxuries, and the other artisans have had their means greatly curtailed. Almost the whole expenditure of the rich man goes, in one form or another, in the employment of labour-often, it is true, in a most unwise employment of it; and when this truth is fully apprehended by the working classes, they will understand that every diminution of the rich man's income, by partial taxation, must recoil upon the poor,-not by a law of Parliament, but by a law of Economic science, against which Parliamentary enactments contend in vain.

If this were fairly stated and fully comprehended, what would be the feeling of the mass of our population on the subject of direct taxation? How would they who never see the face, or hear the unwelcome knock of the tax-gatherer, from the cradle to the grave-who, perhaps, scarcely ever pay a farthing to the revenue at all, or at all events would never find out that they did it, if they were not told-how would they endure to be called upon, year by year, for a house-tax of five per cent., for five per cent. of their wages, or for five shillings a head upon every member of their family? Direct taxes, like any other taxes, are sure to be popular with those who do not pay them. But if the choice were fairly placed before them, between indirect taxation as it now exists, and direct taxation of which they must bear their fair share,-between a tax on income, which they could not escape, and a tax on luxuries, which it was optional with them to pay,-who can doubt what would be their instantaneous and unanimous decision? Hitherto, the people have been systematically blinded as to the real question at issue, both by their own misleaders, and by a misjudging Legislature. How could they form a just estimate of the relative merits of direct and indirect taxation, when they knew the former only as an income-tax, which spared their incomes, and a house-tax, which spared their houses, and the latter as a burden which poisoned every pipe they smoked, soured every glass of beer they drunk, and embittered every cup of tea they sweetened? But when the question is honestly propounded to them: Not"Which do you prefer-a tax which the rich pay and you escape, or one which you pay in common with them?" but, "Which do you prefer a tax which you pay only when you like, if you like, and to the extent you like; or one which, though perhaps smaller in amount, is yet taken from you periodically, inexorably, and however ill you can afford it?"-we are

Morality of Sir Charles Wood.

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satisfied that the advocates of direct taxation will find few supporters.

We cannot but think that much moral mischief has been done, and serious political danger incurred, both by the custom recently adopted or extended of exempting the lower classes and the smaller incomes from taxation, and still more by the language in which this custom has been advocated. No man has sinned more deeply in this particular than the present Chancellor of the Exchequer, Sir Charles Wood. We have already had occasion to animadvert upon his lax and slipshod morality. In recommending his new house-tax, on the ground of its exempting all houses under £20 a year, (or 3,000,000 out of 3,500,000,) he spoke thus:-"In all the commercial and financial measures I have submitted to the House, my principle has been one and the same. I have never turned to the right or to the left to consider what would be a benefit to one class or another; but I have looked to that which would be most beneficial to the great body of our labouring population. They are, in my opinion, the special objects of the care and solicitude of Government,-government being instituted for the benefit of the many, not of the few."

It is sad to see a man high in office utter, before a grave assembly charged with the destinies of millions, twaddle indicating such sad mistiness of view. In the first place, while professing to eschew all class legislation, he adopts a class legislation of the most sweeping, flagrant, and demagogic character. He will not turn aside to consider what will benefit this class or that, but yet he will make it his main object and consideration to benefit the largest class of all. He will inquire, not what is just and fair to all classes, but what will be most desirable for that class whose interests he especially desires to serve. In laying on a tax on dwellings, he will levy it on half a million only, out of three millions and a half, because he desires to benefit the class who live in the exempted three millions, at the expense of the class who live in the taxed half million. He will lay the burden on the few, not on the many, "because government was instituted for the benefit of the many, not of the few." Was it? we had always understood that government was instituted for the government of the many and of the few. We have always conceived that the distinction here drawn was the essential blunder and vice of vulgar democracy. In proportion to the smallness of that portion of the community on which taxation is imposed, does it assume the character of confiscation. In proportion as one class or section is singled out for bearing the burdens of the State, does taxation approach the essence, put on the garb, breathe the poisonous doctrine of pillage. We would go to the furthest point of the most thorough democrat