in removing every impost which pressed unfairly, injuriously, or oppressively upon the mass of the community; we would apportion the public burdens on the most rigid principle of equity, wherever that can be discovered, and as far as it can be approached; but those who encourage the people to believe that taxation ought to be or can be made to fall upon the upper classes exclusively or disproportionately-those who adopt the course and use the language of the Chancellor of the Exchequerare laying down a doctrine of the most fatal tendency, and the most flagrant immorality; a doctrine, in fact, which differs only in the extent to which it is proposed at present to apply it, from the doctrines of Jack Cade, Barbès, and Blanqui, of the plunderers, spoliators, confiscators, and "equitable adjusters" of all times.

One of the arguments in favour of direct taxation, most relied upon by its advocates, is its superior cheapness. When compared with indirect taxation, it is alleged, it takes less out of the pockets of the people, in proportion to the amount it puts into the coffers of the Exchequer. We admit the truth of the allegation to a certain degree; but that degree has been enormously overstated. The relative cost of collecting the different branches of the revenue in Great Britain is as follows: Customs, £5, 6s. 4d. per cent.; Excise, £4, 16s. 9d.; direct taxes, (assessed and income,) £3, 3s. 3d. In other words, the direct taxes cost three and one-sixth per cent., and the indirect taxes five per cent. in collecting, leaving an advantage of not quite two per cent. in favour of the former. On the first blush of the matter, then, it would appear as if the entire substitution of the former for the latter would effect a saving of nearly one million a year to the country. How far this would be a sufficient equipoise to the vast addition of irritation and inconvenience which such substitution would entail, may well be doubted. But would the saving be even as great as it appears? This is more than doubtful. In the first place, a wiser adjustment of our customs and excise-duties, repealing those which yield little and cost much, would reduce the expense of collection most materially. Already we can trace a commencement of such reduction arising from the judicious changes which have been introduced from time to time. Thus we find that in the years from 1830-1833, the cost of collecting the customs' duties in Great Britain averaged £5, 19s. 7d. per cent. In the last four years it has only averaged £5, 7s. 3d.; and in 1850 was only £5, 6s. 4d. In the five years from 1835-1839 the cost of collecting the Excise averaged £6, 6s. 4d.; in the last five years it has only averaged £5, 7s. 2d., and in 1850 was only £4, 16s. 9d. But there is another consideration. It is true that the direct

*Finance Account, 1851. Parl. Papers.

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taxes are now levied at a collecting cost of three and one-sixth per cent., because they are levied on comparatively few individuals, and in comparatively large sums. But if they became our sole taxes, or even the main basis of our taxation, they must, as we have shewn, be extended to all classes, they must be levied upon all individuals, however humble. Instead of Schedule D being demanded from 147,659 individuals, (as it was in 1848,) it would have to be demanded from probably upwards of a million. Instead of the revenue being collected in sums of £100, it would have to be collected in sums of £1 and under. Instead of a collector calling once and upon one man for £50, he would have to call a hundred times, and upon a hundred men. Instead of gathering the House-tax from 500,000 houses, it would have to be gathered from 3,500,000. The 20s. a year which the working man (according to our previous estimate) now pays indirectly and unconsciously, and which the collector never has to call upon him for at all, would then have to be wrung out of him by painful pressure, under a variety of heads, and at repeated visits. The collector now gathers the tax on tea or sugar, for example, from about one thousand importing and unmurmuring merchants, who pay it as a matter of course, and without demur. Under the direct system, the same sum would have to be drawn in small amounts from thirty millions of resentful and blaspheming contributors, who would make a point of giving as much trouble as they could. Under such circumstances, is there the least probability that direct taxes could be collected for three and one-sixth per cent., or perhaps for three times that amount? Is it not evident that to obtain a large revenue you levy it from the many,-to obtain it cheaply you must levy it from, or rather through, the few?

We do not therefore see any reason to believe that direct taxes, fairly imposed, would be at all less costly in the collection than indirect ones, judiciously selected and adjusted. We have met boldly, and in the face, the principal recommendations usually urged on behalf of those imposts which are now bidding so high for popular favour. We have shewn that when they take the form of an Income and Property-tax they are inherently and incurably unfair; we have shewn that it is very questionable whether they are economical, and that it is beyond question that they are not equitable, and cannot be made so. There are, however, three classes of direct taxes which have our unqualified approval-the Assessed Taxes, and the House-tax, and the Legacy Duty. The Assessed Taxes, now that the

* In confirmation of this, it is important to notice that previous to 1842, (when the Income-tax was imposed, which presses on so few,) the direct taxes cost nearly as much as the Customs and Excise in collection, or above five per cent.

Window Duty has been repealed, seem wholly unobjectionable. They are easily levied; they allow little, if any, room for evasion and deceit; they are taxes on expenditure, not on income; they are taxes on needless luxuries, and if a man wishes at any time to escape the tax, he can do so by foregoing the luxury. If he can afford to indulge in the luxury, it is certain he can afford to pay for it, and should not grudge doing so. Of all taxes, a house-tax, fairly levied on the assessable value of the dwelling, and admitting no exemptions, unites most merits, and is open to fewest objections. It is liable to no evasion or dispute; it creates no irritation beyond that which paying away money for an unseen reality unavoidably causes in nearly all minds; its pressure is more equitable than that of any other, since the value of the house in which a man chooses to live offers a criterion of what he can afford to spend, (and therefore to pay,) not, indeed, perfect and universal, but certainly more accurate than any other test. We particularly recommend to our readers' attention the section of Mr. Mill's work which he devotes to the consideration of the house-tax, in which he briefly, but most triumphantly, disposes of all the current objections which are urged against it, shewing how frivolous most of them are, and how entirely all that have any validity or weight apply not to the principle of the tax itself, but to the faulty and inequitable mode in which it was formerly levied. Now that this tax has been re-imposed, we trust to see it made permanent, universal, equal in its pressure, and greatly increased in amount. It may then become-as we hope it will-a substitute for the present Income-tax, almost all the recommendations of which it may claim, and all the fatal allegations against which it avoids. Ä ten per cent. house-tax, laid not on 500,000 dwellings, but on 4,500,000,* would yield a large, steady, and unobnoxious revenue, and possesses, besides this vast supplementary merit, that the rate might be raised or lowered according to the yearly necessities of the Exchequer, and thus save that constant alteration, repeal, imposition, and re-imposition of taxes, which is one of the great mischiefs of our present empiric, unscientific, and hand-to-mouth system. Now, if there be a deficiency, the Chancellor has to set his wits to work to devise some new tax that can be laid on with the least outcry, or to select from the old ones that which will best bear an increase; and in doing this it is scarcely possible for him to hit upon one which will not be more or less injurious, or more or less partial in its augmented pressure, and an alteration of which will not, therefore, fairly lay him open to the charge of injustice. If, on the other hand, there is a surplus revenue, the Chancellor is immediately assailed

* I.e., 3,467,611 in Great Britain, and 852,389 (probably) in Ireland.

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with the deafening clamour of twenty rival claimants for relief; and whatever tax he selects for repeal, it is scarcely possible for him to avoid favouring one class of the community more than others, and thus incurring the accusation of partiality. All changes in taxation are in themselves bad, because all involve an unsettlement of time-adjusted pressure. Taxes, whatever be their nature and first incidence, have a certain tendency, in the course of years, to rectify their own original inequalities, and spread themselves with tolerable fairness over the community. This is one of the most indisputable axioms of economic science, though writers differ as to the rapidity with which the process is effected. But of the inherent faculty of taxation, however partial its imposition in the outset, to place itself gradually and in due proportion on the right shoulders, there can be no controversy. Every change, therefore, every new tax laid on, every old one repealed, disturbs the natural adjustment which has been thus effected, and introduces, for the time, a fresh inequality of pressure, requiring a fresh process of adjustment. But if we had once removed the taxes really injurious to morals and to trade, it would be of inestimable benefit to have no further alteration, to have all taxes settled and permanent, but to meet the varying redundancies or deficiencies of the revenue, as they occurred, by varying the rate per cent. of that one impost which pressed equally on all. This, we conceive, would be the greatest practical improvement which could be introduced into our fiscal

system.

The Legacy Duties, in the form in which they are now imposed, are utterly indefensible. Their partiality is gross and flagrant. In the first place, they exempt a vast proportion of the property of the country altogether; in the second place, they tax small properties at a higher rate than large. From the Probate Duty, which is levied on the entire personal property devised by will, from the duty on Letters of Administration, which is levied on the entire personalty of parties dying intestate, and from the Legacy Duty, which also falls on personalty, but at rates varying according to the degree of consanguinity of the legatee, all real property is exempt. Railway shares, bank stock, stock in trade, ships, gold, bills of exchange, &c., all pay : land does not. Again, the Probate Duty, which averages rather more than 2 per cent. on all sums under £2000, is only about 14 per cent. on properties of £20,000, and not much more than 14 on estates of £100,000 or £1,000,000. The duty on Letters of Administration is 3 per cent. on the smaller amounts, and only from 2 to 24 on larger ones. These monstrous injustices have led to a feeling of hostility to a tax which, when fairly imposed and levied, is one of the most equitable and least burdensome that can be devised. In judging the principle of a Legacy Duty, we

must consider it not in the imperfect and objectionable form which it may have assumed under the sinister operation of class interests, but in the form it would assume in the hands of just legislators. Now, if the Probate and Administrative Duties were repealed, and the Legacy Duty imposed upon all property passing by inheritance, at a rate varying, as at present, according to the degree of relationship, from 1 to 10 per cent., we do not see any tax to which so few objections could apply. It is little liable to evasion by donation inter vivos, and a slight alteration of the law might still further diminish this liability; it affords scarcely any opening to fraud, because the legal formalities necessary in the due performance of the duties of an executor would give ample means of ascertaining the amounts bequeathed or inherited; it fulfils admirably Adam Smith's third requisite of a good tax, (that it should be levied at the time when it is most convenient for the individual to pay it,) inasmuch as it is demanded from him at the very moment when he is receiving a considerable accession of property; and, finally, it is paid with less irritation and reluctance than any other fiscal burden, because it is called for when this accession of property has improved his circumstances, and may be supposed to have put him in good humour. Moreover, there seems a special equity in the tax on a separate ground. It may be regarded as an equivalent paid for the protection of the law under circumstances when an individual is disabled from protecting himself. A man's power over his property naturally ceases with his life; without the intervention of the State he could not secure its reversion to those whom he desired to endow. The State, however, steps in, and says to him, "We will carry out your posthumous wishes with regard to the disposal of your estate when you are helpless and departed, on condition of a moderate and reasonable fee." Thus he pays the ordinary taxes to purchase protection during his lifetime: he pays the Legacy Duty to purchase a posthumous power over his property, a power which only an executor like the State can bestow. If there be no property to bequeath, there is no tax paid.

Mr. Mill's estimate of the justice and incidental merits of this tax is so high that he would carry it much further than many will feel prepared to go along with him. He conceives that "the principle of graduation, (as it is called,) that is, of levying a larger per centage on a larger sum, though its application to general taxation would be a violation of first principles, is quite unobjectionable as applied to legacy and inheritance duties." He would, moreover, limit the power of bequest to a fixed amount, making the State residuary legatee in all cases where the property left exceeded this amount to each recipient; and he would make collateral inheritances ab intestato cease altogether, and