MR. M. T. BASSasked Mr. Chancellor of the Exchequer, Whether he will be good enough to state to the House what are the proportions contributed respectively by direct and indirect taxation to the gross revenue of the Country?
§ THE CHANCELLOR OF THE EXCHEQUERSir, the Question appears to be a very simple one, but it is really one of considerable difficulty, because of the ambiguity of the terms employed. I must, therefore, first of all, state the sense in which we employ these terms, though I am far from saying that it is the proper sense or the one in which hon. Members interpret them. By gross Revenue, I understand the whole Revenue as estimated, including the expenses of collection. With direct and indirect taxation I have a little more difficulty, 626 because there are seven or eight different meanings, each of which has its advocates. All taxes are in one sense direct, because they are taken from somebody by the Government; but, as I understand the terms, an indirect tax implies that the person who pays it has some means of recovering it from the community, and a direct tax implies that the person who pays it has no such power. According to this classification, the tax on tea would be an indirect tax, and the income tax would be a direct tax. Applying that principle, the Customs would be wholly indirect taxes, and the Excise, with some trifling exceptions, would be also indirect. With reference, however, to the Excise upon railways, I am in some difficulty, because the power of recovering it from the public depends upon very complicated considerations; for, while some railways are empowered by Acts of Parliament to recover the tax from their passengers by a charge over and above the Parliamentary maximum, others have not that power. As it stands at present, we have deducted it from the Excise, and treated it as a direct tax. It yields £505,000. Then, under the head of direct taxation, stamps, less Law Court fees, amount to £8,585,900. Taxes, principally the land tax and inhabited house duty, £2,725,000, and income tax, £6,350,000. According to that division, the direct taxation would amount to £18,165,900; and the indirect taxation to £42,744,000. There are, however, other sources of Revenue which are neither direct nor indirect, and which I have excluded from this comparison on that account. These are the Law Court fees, which appear to me to be payments for services rendered, £421,100; Post Office, £4,770,000; telegraphs, £500,000; Crown Lands, which are really proceeds from public property, £385,000; and miscellaneous, £3,229,200—making in all, £9,305,320. Indirect taxation, therefore, contributes about 60½ per cent; direct taxation, 25½; and sources of Revenue neither direct nor indirect, 14 per cent.