INCOME-TAX

HC Deb 29 April 1842 vol 62 cc1256-317

On the motion of the Chancellor of the Exchequer, the House went into committee on the Income-tax Bill.

Upon schedule D being put, as follows:— Upon the annual profits or gains arising or accruing to any person residing in Great Britain, from any kind of property whatever whether situate in Great Britain or elsewhere, or from any profession, trade, employment, or vocation, whether the same shall be respectively carried on in Great Britain or elsewhere, there shall be charged yearly for every 20s. of the amount of such profits or gains the sum of 7d.

Mr. Sharman Crawford

rose to move that the words, "or from any profession or trade, employment or vocation," be expunged. Under present circumstances, he considered that the commercial and manufacturing interests had a fair claim of exemption from this tax. He would not again detail the distress under which they suffered; but he could not help reminding the House that they had passed a bill for the purpose of keeping up the price of corn, and he could not but think that the distresses of the commercial and manufacturing classes were produced in a greater or less degree by the Corn-laws. These corn duties were imposed for the benefit of a particular class—the landed interest; and so long as they had that special benefit they ought to bear that proportion of the Income-tax. He knew it would be said that these proposed exceptions would create a deficiency, but that might amply be made up by extending the probate duty to all kinds of property, real as well as personal. His great objection to the present bill was the inquisitorial nature of its enactments. He did not contend for the entire exemption of incomes derived from manufactures, but he thought the fair proportion of taxation might be levied on them in another way. Why not tax them in proportion to the rents which they paid for their premises? Great evils would arise to the commercial interest from individuals engaged in it being called on to make a disclosure of their affairs. He considered a tax on property, or on the income derived from property, as the best of all taxes; but when it was extended to the profits derived from trade, it was mani- festly unjust. The hon. Member for Bath (Mr. Roebuck) had a motion on the paper for a reduction in the percentage of the tax on profits derived from trade. He would support that motion, although it did not remove the great objection which he felt to taxing profits derived from trades or professions. He then begged to move the omission of the words, "or from any profession, trade, employment, or vocation."

Mr. Hume

seconded the motion. He had no objection to a tax on property or capital, but he thought the principle of taxing incomes arising from capital and landed property, and yearly incomes arising from trade and from professions at the same rate per centage, was manifestly unjust. He would show to the House that the principle of the original Income-tax was very different, and much more just. If they had adopted that principle, he would have agreed at once in the proposal. By the act of 1692, a tax was imposed on the frent of real property of 4s. in the pound, and supposing a person had an income from landed property of 100l., he would have paid 2l. as his share of the tax. Stock in trade, machinery, houses, money, & c., to carry on the business was considered personal property, and that personal property was dealt with in a different manner. The legal interest of money at that time was 6 percent., and supposing a person had personal property valued at 100l., that amount was considered as capital, the same as the value of land was considered capital, and the profit or interest allowed on this amount was taken at 6l., and he paid the tax not on the 100l., the capital—but on the 6l., being the interest, or supposed profit arising from his capital. That was a fair tax. But if they as proposed by the present bill, taxed an income of 100l. derived from a profession or a trade, in the same way as they taxed a yearly income derived from land, they would be taxing the capital of the professional man, and not the interest. Such a tax would be most unequal and unjust. It would fall on the income of capital of the rich, but on the capital of the poor. For example, if he had 3,000l. of capital, and invested it in land he would suppose it to produce 150l. They proposed to tax that sum as the yearly income or profit of the 3,000l., which was quite correct; while an income of 3,000l., arising from a trade or profession was all capitals and if the interest at this time be considered 5 per cent., that amount of capital would produce 150l. a-year, and the tax ought to apply to the 150l. and not to the 3,000l. But it was proposed to tax those two incomes at the same rate. Was this fair? That the income from real property should be taxed, whilst the capital of the professional man and trader was taxed. He was opposed to any tax on professional or mercantile profits, but he would capitalize them and allow the tax to be levied on the income of such capital. Every restriction should be removed, and it would be better that every man employing capital productively should not be taxed, and that every individual be permitted to exert himself to the best advantage in his power to add to the wealth of the State by his industry in whatever form created. It was on that principle that he had opposed the taxing terminable annuities as proposed by the bill, to take a portion of the capital. He thought it was most unjust to tax them. Suppose he bought an annuity of 100l. for twenty years: the first year he would be entitled to receive 5l. as interest and 5l. as capital; so that in ten years he would have the interest regularly, and he would in some time receive back all the capital. But if they laid the tax on 10 per cent., the amount of such annuity, it was clear, that at the end of twenty years it would have deprived him of a considerable portion of his capital. Surely, that was unjust and ought not to be the plan of the Government. If the annuity was purchased by 100l. for ten years, the annuitant ought to receive 15l. yearly, namely, 5l. for the interest and 10l. to replace the capital, and if the tax be levied on the 15l., it is evident that it will be a tax on the 5l. of income, and a tax also on the 10l. to replace the capital at the end of the ten years. He declared this unequal, and consequently unjust taxation when compared with the landed proprietor, whose capital was not to be touched by the bill. He hoped his hon. Friend the Member for Bath would state what kind of incomes he meant to include in his motion, for he was decidedly of opinion that stock in trade ought to be considered personal property as well as professional income, and that the tax should be levied on the yearly interest or profit from such stock or income, at the rate of interest at the time, say 5 per cent.

Mr. Roebuck

said, that he was in a difficulty as to the proper course to pur- sue. He was afraid that he should be precluded from bringing forward his motion if the House should give precedence to the motion of the hon. Member for Rochdale. Perhaps the right hon. Baronet could suggest some course to obviate the difficulty.

Sir R. Peel

suggested, that they should first proceed with the clause, that "upon the annual profits or gains arising or accruing to any person," &c. "from any kind of property, there shall be charged yearly for every '20s. of the amount of such profits or gains, the sum of sevenpence." Then they could proceed to the other part of the clause which imposed the same tax on "profits or gains arising from any profession, trade, employment, vocation," at which stage the hon. Member for Bath would be enabled to move that the sum of 3½d. should be charged instead of 7d. That part of schedule D which provides that upon the annual profits or gains arising or accruing to any person residing in Great Britain from any rent or property whatever, whether situate in Great Britain or elsewhere, there shall be charged yearly for every 20s. of the amount of such profits or gains the sum of 7d., was then agreed to.

Viscount Howick

understood the course of proceedings to be that that they would first put the question that the blank relating to the tax on professions, trades, &C, be filled up by the insertion of 7d. The hon. Member for Bath would propose to substitute 3½d., on which he would take a division, and when the blank was filled up with either 7d. or 3½d. then would be the time for the hon. Member for Rochdale to propose his amendment.

Mr. Crawford's

amendment postponed.

The Chancellor of the Exchequer

proposed that upon the annual profits or gains arising or accruing to any person residing in Great Britain from any profession, trade, employment, or vocation, whether the same shall be respectively carried on in Great Britain or elsewhere, there shall be charged yearly for every 20s. of the amount of such profits or gains the sum of 7d.

Mr. Roebuck

rose to propose the amendment of which he had given notice. He had some time since stated to the House that the inequality of the tax on property accruing from professions, trades, employments, or vocations was so obvious, that it was desirable that some method should be adopted for remedying that inequality. The right hon Baronet (Sir R. Peel) said, in reply, that it was impossible to render the tax equal, and there upon the noble Lord (Lord John Russell) took advantage of that admission, and said he perfectly agreed with the right hon. Baronet, that it was utterly impossible to render equal those things which were in themselves unequal, and therefore he could not accord with the proposition of Sir Robert Peel, and opposed the tax altogether. The distinction between the two leaders of the House was this: the right hon. Baronet said, it was impossible to render the tax in any way equal, still he should impose it; while the noble Lord said that, it being impossible to render the tax equal, he should oppose it. Now he came between these two parties, and said that, in his opinion, it was possible to render the tax equal, and therefore he should vote for its being retained. The distinction between him and the right hon. Baronet was as to the premises; and the distinction between him and the noble Lord was as to the conclusion. He had to maintain three propositions:—first, that there was an inequality in this mode of taxation; secondly, that the tax, being unequal, it sinned against those great canons of taxation which had been laid down by every man whose opinion was an authority on the subject, and that therefore if it were within their power to take away that inequality, it was their duty to do so; and, thirdly, that there was a mode by which this inequality might at least be reduced (for he would not go further than that), and that therefore a necessity was imposed upon the right hon. Baronet to follow out that proposition. Now, with regard to his first proposition, he thought he should have very little difficulty in making out that this was an unequal tax. He was sure the right hon. Baronet would himself concede that point. A tax levied upon a man who derived 100l. a year from property possessed by him in fee simple, and the same amount levied upon a professional man, whose income by his labour amounted to 100l. a year, could not be an equal tax. First, it was unequal because the different descriptions of property would yield a different price in the market. A fee simple estate would yield a price equal to thirty years' purchase. If he went into the money market he could purchase an annuity of 300l. a year, at the age of thirty and in good health, for 5,000l.; but a fee simple estate, yielding 300l. a year, would cost 9,000l. In this case, then, the best he could put, where the party was young, and in perfect health, and where there existed no doubt or difficulty, he had shown the value of that class of incomes to be nearly one-half less than incomes derived from land. But there were many contingencies which rendered the income of professional men very precarious. It might depend not upon health alone. He had known professional men who at forty years of age were making a large fortune, and at sixty were without any income. Mercantile men, and men in trade, were liable to all the chances of the seasons—to tempests, to money panics, and to the folly of their neighbours, all of which rendered the amount of their gains doubtful. Therefore, in saying that the difference between the income of the landed proprietor and of a person in any profession, trade, vocation, or employment, ought to be taken at one-half, was not, in his opinion, assuming too great an inequality. But it might be said that he was using a rough method of calculation, and was not approximating perfectly to the truth. He admitted it. He, on a former occasion, proposed a plan which he thought did approximate to the truth; by taking the value of his land which yielded 100l. a year, and comparing it with the amount he should be obliged to pay for insuring his life for 100l. a year,—this, he thought, would have determined the true value between a professional or mutable income, and an income which was represented by land. But he was told that there was great impracticability in that proposition; he therefore now came forward with a much more simple mode, and merely asked the right hon. Baronet to reduce the Income-tax on variable and uncertain incomes to one-half the sum which was levied on certain and unchanging incomes, in order to arrive at that principle of justice upon which every tax ought to be based. He had thus established the inequality of the tax. He now approached his second proposition, namely, that a tax thus sinning against justice, and against all the rules of sound taxation, ought to be changed. Adam Smith had laid down four maxims with regard to taxes in general. First, that the subjects of every state ought to contribute towards the support of the Government as nearly as possible in propor- tion to their respective abilities; second, that the tax which each individual was bound to pay ought to be certain and not arbitrary; third, that every tax ought to be levied at the time, or in the manner in which it was most likely to be convenient for the contributor to pay it; and fourth that every tax ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible over and above what it brought into the public treasury of the State. The first grand principle which every man ought to adopt who assumed the reins of Government when he came to tax the people was, to take care that the tax should be equal upon all. Now, he would suppose a man to have an income of 100l. a-year, derived from land held by him in fee simple, and another man deriving the same amount of income from some professional pursuit. The question was, were these two persons equally competent to contribute to the expenses of the State? Far from it. Every man would at once acknowledge that the person whose income was derived from the fee was much more able to pay a tax to the State than he whose income was the result of his own personal exertions. It could be easily shown that the former was one-half richer than the latter. If so, ought they to be taxed at the same rate? Was that man who obtained his income by the daily application of his mental and physical powers—who was wrought upon by the anxieties which the uncertainty of trade and professional avocations necessarily occasioned—who was placed under the weighty responsibilities of maintaining the station and credit of himself and family, was such a man to be put on the same level and taxed to the same amount with the comfortable and complacent gentleman, who, without any toil or any solicitude, derived his income from estates which had descended to him from his ancestors, or from funds which had been accumulated by the industry of his forefathers? He saw men on the benches before and around him whose fortunes were derived by the constant application of their minds, and who were occupied almost incessantly during the twenty-four hours; should they be taxed to the same extent with those calm and easy Gentlemen that sat near them, whose wealth sprung from land and other fixed sources, without labour of any kind? There were merchants present whose whole existence depended upon the elements, and whom a storm or a tempest might plunge into ruin; while there were others within his view who were exposed to a thousand chances and vicissitudes that always accompanied trade. "Was the right hon. Baronet prepared to say, that such men ought to contribute to the State equally with those whose property was secure from all risk, and who depended upon no contingencies, nor upon any personal exertions for their incomes? If the right hon. Baronet did think so, then let him carry out the principle. Let him tax the labouring man, he who derived his daily bread from his daily labour, and who was paid by the week. But it might be said, that the proposition which he now made was only one of many which had already been suggested, and therefore ought not to be entertained any more than the rest—that the tax had been denounced as a bad tax; that it was a direct tax, and that the people did not like it. Now, he was aware of all this; but his proposition was not open to this objection, for he was not opposing the principle of the bill. The House was now in committee to consider the details, and, in his opinion, it was not proper to drag the principle of the measure into discussion. He was strictly confining himself to the mere question at issue—was this an unequal tax? If so, then the next question he asked was this—was there any difficulty in apportioning the tax, and making it equal? Where was the difficulty? Every man who derived 100l. a-year from a profession, employment, trade, or vocation, was required to declare it. If he derived his income from fixed property, it was known; if from land, it was known; if from the funds, it was known; if from an annuity, it was known. But, if he made a return that it was derived from trade, profession, or vocation, it would, of course, be known also; therefore, so far from the difference of the source whence the income was derived being a matter of difficulty, there was none whatever. He would suppose a professional man at the age of forty to have saved up 10,000l., which he invested in the 3 per cent, consols. The schedule being sent to him, he would return that he derived the interest on this 10,000l. That fact would be known as far as his fixed income was concerned. But then came the tax-gatherer, and said to this gentleman, "How much do you get from your profession?" The reply might be, "I get a thousand a-year." "Very well," says the tax gatherer, "then I tax you 3 per cent upon the return made for your interest upon the 10,000l. consols; and I tax you one and a half per cent upon your professional gains" Now, where was the difficulty? On a former occasion, the right hon. Baronet, with a view to drive him into a corner, said when he first propounded this modification—was this, or that, or t'other, to determine the value of a man's life? He answered the right hon. Baronet at the time, according to what appeared to his mind to be the truth. But if the right hon. Baronet should meet him now, by saying, "It is true, that in this case you are quite right;" but there are other cases where similar inequalities exist, and where the parties have an equal right to be relieved; and, therefore, I will not make any distinction; if the right hon. Baronet should use this argument, then he would say to him: "I do not think that that is a worthy answer." Was it because they could not (and it remained to be seen whether they could not) do all justice, should they not do some? Because they could not do perfect justice, should they do complete injustice? Looking at this question with candour, totally regardless of all party considerations, and knowing the fallibility of the human mind, what he wished to accomplish was, to approximate as nearly as he could to the truth. The whole business of legislation was but a matter of approximation. Certainty of justice never could be attained. The innocent often suffered —the guilty often escaped; but still, by the best efforts of human intelligence, legislation attained in the general result the good of society. He was, therefore, content with its being a matter of approximation; and when he showed the House a case in which it was possible for the House to approximate to justice clearly without difficulty, he would say, that on the head of him who would not adopt a simple, plain, clear, and justifiable remedy—upon his head rested solely, individually, and intensely, all the odium and responsibility. He who should answer him to-night in the powerful position of the right hon. Baronet, upon whose word depended that which should be done, whose word was as the fiat now of the most powerful man amongst them, upon his head rested the responsibility of taxing unjustly, because unequally, the people of this country. He believed, that the right hon. Baronet was desirous to relieve them from all inequality of taxation; and that he wished to tax the people according to their power. The question he therefore put to the right hon. Baronet was, "Show me the difficulty upon this question, which prevents you from doing justice to the people." But it might be said, that even the proposition which he made, was not a perfect approximation to the truth. He admitted it. A man at sixty, and a man at thirty, if taxed according to their respective abilities, was not the same as taxing both at the same rate. He knew it; but as he could not get nearer the truth, he was content to get at a rough approximation towards it. The question between him and the right hon. Baronet was this—taking a man who derived his income from the fee simple in land as the representative of a class, and as a unit, should he be doing more or less injustice by bringing all persons of the same amount of income, from whatever other sources it might be derived, up to his standard; than by attempting to make all those who derived their income from less certain sources, that was to say, from trade, professions, or vocations, a certain fraction of that unit? Why could not this scale be established? Was it impossible? Could the right hon. Baronet say that he, of all men in the country, considered that to be impossible, which so humble an individual as himself considered perfectly practicable? True, the right hon. Baronet might reply, that Fools rush in, where angels fear to tread. Let him say so: still let him, at the same time, acknowledge that he, with all his power abroad and at home, was not able to suggest a measure of justice. In this matter, there was no quarrelling with class interests; there was no horned cattle to interfere with; no Corn-laws to dread. It was a plain and simple question—were you, or were you not, prepared to tax, equally, persons deriving incomes from very different sources? He should now propose, that instead of the words "seven pence," the words" threepence halfpenny" be inserted in the clause, and having done so, he should now patiently wait for the right hon. Baronet to show him, first, that the tax he himself proposed was not an unequal tax; and next, though unequal, still that it was not an unjust tax; and thirdly, that although it might be both an unequal and an unjust tax, yet that it was impracticable to make it otherwise. If the right hon. Baronet could show any one, or all of these propositions to be true, then he had no answer to make; but if he could not do so, then no one could fairly say to him, that he, by this motion, had attempted to throw any factious opposition in the way of the right hon. Baronet.

Chancellor of the Exchequer

could not complain of the manner in which the hon. Member treated this subject, or of the temper with which he brought forward his arguments. He was only expressing the general feeling of the House, when he declared that the hon. and learned Member for Bath had afforded a most excellent example to all hon. Members in the mode in which it was proper to discuss this question—a mode which would prove of the greatest advantage to the course of proceeding in this House, as well as to the interests of the country generally, if it were more frequently pursued. The hon. and learned Member, he was sorry to say, had taken a view of this question totally different from that which he was disposed to take. He had said, with perfect truth, that upon this question of taxation, and indeed he would say upon every question connected with legislation, they could act on no other principle than that of approximation. In fact, legislate as they might, whether they proposed taxes for the general benefit of the country, or attempted domestic legislation, their efforts would fall very far short indeed of the mark which they desired to reach. Thus when the hon. and learned Member called upon Government to propose a tax which should be equal in all its bearings, he proposed to it, to do that which no legislature, with regard to taxes, had ever yet done. To make a tax bear with a perfect equality on all classes was impossible. He, therefore, thought, that the hon. and learned Gentleman would do well to consider what it was for which the present tax proposed by the Government was to be substituted. If the hon. and learned Member discovered in the tax which was submitted for the consideration of the House such inequalities as could not be reconciled with justice, he should at the same time bear in mind additional taxes being necessary, what would have been the inequalities of other modes of taxation to which they should necessarily have had resort if the present proposition had not been made. The hon. and learned Gentleman had drawn a contrast between the learned professions and the owners and occupiers of land, and said that the interest which those two classes had in their respective incomes were so very different, that he thought it would be but just to have the one taxed for their income at a half less than the other. Suppose, however, that the hon. and learned Gentleman had prosecuted his inquiry still further, and considered the effect which was produced upon the different classes of the country by taxes levied upon articles of consumption. Did he consider, that the taxes upon these articles pressed with equal weight upon the different classes of the country. The professional man was called upon to make a certain expenditure to sustain his position in society, and he consumed a larger quantity of taxed articles. Such a person, however, paid equally with every other consumer with a corresponding income in another class of society. The necessaries of life were priced equally to both. Now, what he wished to say was this, that with reference to these classes of corresponding incomes, they being relieved from many of those burdens which pressed equally upon them, would not have any ground of complaint for a change which substituted this particular tax for others which pressed so heavily upon them. He did not mean to maintain that this tax would be equal in its pressure upon all classes, but he did maintain, that this tax should not on that account be considered unjust. The tax proposed to withdraw from the incomes of all persons a certain and limited portion in the shape of a tax in exchange for other taxes to which they must otherwise be necessarily subject. The hon. and learned Gentleman said, that the principle of perfect equality should be the rule upon which this House should proceed. If this were his view of the question, he had been rather late in his application to the House upon this subject. The hon. and learned Gentleman had alluded to the risk to which trading and mercantile professions were subject by the operation of the weather, the changes in the seasons, and such like; but the hon. and learned Gentleman should recollect that he had already acquiesced in the proposition to charge upon the cultivator of the land the same amount of duty on his profits as was charged upon those of the individual of fixed landed property. The hon. and learned Member for Bath had already said it was fitting that the cultivator of the soil should be made to pay the same amount of duty as the owner of the inheritance; and, in doing so, he had not thought of the influence upon the income of the former, which the operations of the seasons would naturally produce; nor that by the occurrence of a tempest his property might be seriously affected; nor that the casualties of one year might cause the destruction of the entire hopes which had been fondly cherished by the producer, and yet he thought that the hon. and learned Gentleman should see, when he was advocating for a principle of equality in the pressure of this tax, that the cultivator of the soil was fully as much entitled to his consideration, and to that indulgence which he claimed in favour of professions and mercantile men. The hon. and learned Gentleman said, that the landed incomes were a description of property which might be considered certain. They descended from father to son—the mercantile and trading professions uncertain; and, therefore, with reference to the amount of duty which should be levied upon these respective classes, it would be only just to reduce the tax upon the incomes of the latter by one-half as compared with the other. He would admit that there was perhaps in all cases a greater uncertainty with respect to incomes derivable from trading or mercantile property than those derivable from landed property, but the man of great mercantile capital often inherited it from those who had preceded him, though it depended upon his character, reputation, and habits of business for increasing it. The cultivator of the soil, too, looked forward with tolerable certainty for a remuneration for the labour he bestowed, and the difficulties which he had to contend against. There were, however, some banking and mercantile establishments of the first character and respectability in the country which had descended regularly from generation to generation, and had yielded large and well-earned profits, derived partly from their own industry and partly from the industry and exertion of those who had preceded them. What, then, was the proposition of the hon. and learned Gentleman with regard to this class? Would he charge an humble individual like himself, with small means a per centage of 7d. in the pound, and at the same time apply to these establishments the reduced charge upon their enormous incomes of 3½d. in the pound? Did the hon. Member think, that that would be a proposition which would ensure public approbation as a measure of equality and justice? Would the public be satisfied, when they saw the partners of those establishments enjoying their splendid incomes (which of course they would have every right to do), and paying only one-half the amount of duty which their neighbours of humbler means were obliged to do? Did he think, that such a system would produce satisfaction in the public mind, or be found practically to work for the benefit of all classes? He thought, that such a system of inequality, in the way of taxation, would produce one burst of universal dissatisfaction. He believed, that the public would much more highly approve of the proposition now made by the Government, than any such suggestion as that made by the hon. Member. In the imposition of such a tax as this, the means of enjoyment which the incomes afforded to the individual should be considered. The means of enjoyment were precisely the same to all classes possessing similar incomes. Acting on the authority of Adam Smith, who had been just quoted, her Majesty's Government had proposed to lay it on in proportion to each person's incomes from whatever source it was derived. On these grounds, he did not agree with the hon. and learned Gentleman's views who had preceded him. And for these reasons he would vote against the amendment. Before, however, he sat down, he would allude to an observation which had been made by the hon. Member for Montrose as to what was the meaning of the word property. That hon. Member had called the attention of the House to the original land-tax of 1692, and he said, that that was altogether at variance with the present proposition. Now, he thought, that the hon. Gentleman had not considered the details of that tax, or he would have seen that he was wrong in his interpretation of it. In 1692, it was directed, that the land should pay a tax of 4s. in the pound, and the stock in trade of the mercantile man should also pay a tax of 4s. in the pound. This was the arrangement made in the reign of King William. It imposed an equal duty upon land and stock in trade. The only distinction between that proposition and this was, that the former was carried out with a most inquitorial power, and a man's profits were arbitrarily fixed at six per cent upon his capital. In the present system, the inquisitorial power had only reference to what a man's real income was. The whole difference between them was, that the one employed an inquisition for ascertaining the entire capital of a man, and the present to ascertain the whole income only. It was, he thought, but fair for all parties, when a tax of this description was to be imposed, that it should be levied equally upon all, by ascertaining the real amount of a man's income, rather than be driven to the rough calculation which was adopted in the former reign.

Mr. Ward

said, that he thought the powerful speech of the hon. and learned Member for Bath had not been replied to in any way or shape by the right hon. Gentleman who had just sat down. What were the main arguments that the right hon. Gentleman had relied upon? Why these—that there was injustice in the manner in which the indirect system of taxation was carried on in this country, and that, therefore, in proposing a new tax they were bound to follow up the principle by an aggregate of injustice; in other words, that they should not do a little justice, as the hon. and learned Member for Bath had suggested, because they could not make all their taxation equally just. The right hon. Gentleman had endeavoured, by picking out certain trades, and by selecting those professions which were the most prosperous in the whole circle of life, to prove that the proposition of his hon. and learned Friend could not be acted upon with any degree of justice. The right hon. Gentleman had selected for his arguments certain banking houses which had for a series of years been established in this country. But why should the right hon. Gentleman take these rare instances of great success? Why not embrace the whole circle of professional life? Why should the great mass of professions be overlooked when considering this question? Persons who were obliged to struggle for their existence at the present moment, but to whose difficulties this tax would be a very great addition? He did not wish to be forced to vote against this Income-tax; he wished to be able to mitigate the injustice with which it was marked, and unless better reasons were shown by hon. Members on the opposite side of the House than what had already been given for opposing the motion of the hon. and learned Gentleman, the position in which the Government would be placed would be exceedingly unfavourable. Let them consider the hardship which would be done to professional men if this proposition of the right hon. Baronet were carried out. This class of persons were at present obliged to economise for the purpose of ensuring a means of existence in after life, and were forced to save every shilling, except what was absolutely necessary for their immediate wants. But the right hon. Gentleman said that the means of enjoyment were equal to every man of 1,000l. a year. He denied the fact. The means of enjoyment were by no means equal. If a man enjoyed 1,000l. a year from fixed capital, he might indulge himself with all the enjoyments of life, as he would be certain that he would be leaving after him the same provision for his family. But the professional man with 1,000l. a year depended solely upon the economy he practised in the expenditure of his money for the means of obtaining an existence in his old age, and in case of his death, that he might leave some provision for those who were to come after him. Let them consider too the uncertainty of those professional incomes with respect to a medical man, for example. Dr. Chambers, that eminent physician, said that no medical man could fairly reckon on more than fifteen years of his life for acquiring a full remuneration for his services; for he passed a large portion of his life, in the first instance, in great exertions to obtain a standing in his profession, and when he had arrived at that position he could only reckon upon fifteen years for receiving the reward of his whole professional life. Upon such classes as those then, they were about proposing a tax of 3 per cent, upon their income, which would be just as much as they would demand from a man with a landed estate of 10,000l. a year income. He thought his hon. and earned Friend had suggested a sort of compromise, with regard to these conflicting interests, which was fully deserving of the intelligent consideration of the House. An acquiescence in this motion would have the effect of reconciling many persons to this proposition, who at present regarded it with the most unmitigated dislike. He hoped they should hear from the right hon. Baronet opposite that the proposition which had just been made was deserving of more respect than that given to it by the right hon. Gentleman who had just sat down.

Mr. S. Wortley

said, he was unfortunate enough to differ in opinion from the views of the hon. Gentleman who had just sat down, with respect to the nature of the answer given by the right hon. the Chancellor of the Exchequer to the proposition of the hon. and learned Member for Bath. He confessed that he thought the motion of the hon. and learned Member for Bath would, if carried, inflict a greater injustice upon the different classes of the country than the proposition of the right hon. Baronet. In the first instance he would take the owner of the land who derived his income from the rent paid to him by his tenants. Landed property was subject to so many limitations that the actual holder in many cases possessed no more than a life income. If so, he would ask the hon. and learned Member whether his argument, which he illustrated by the case of a bargain in the money market, would hold good? Could the holder of a life interest walk into the market and sell out for the price which he set in contrast with the price which would be obtained upon a terminable income derived from other sources? Now, with respect to the landlord. The tenant paid the tax; and what was the result? That the landlord paid a tax of 3 per cent., not on his net income, but on his rental. Had the hon. and learned Gentleman so little knowledge of the management of landed property as to maintain that the rent-roll of the landed proprietor was the income which he derived? There was no landed proprietor in the country who was not compelled every year to abandon a large portion of his rent-roll in order that the necessary expenditure might take place upon his estate. He would now call the attention of the committee to the 33rd page of the bill, and he would ask the hon. and learned Gentleman why a difference was to be made between the assessment upon the banker who derived his income from a commercial source, and the assessment upon tithes? The hon. and learned Gentleman must see that tithes were not only property of a terminable nature, but actually of a variable value. They certainly might be compounded for, and rendered fixed income, but in their original form they were tithes in kind; they were the tenth of the produce of the land, and were a variable property. Next to tithes came an assessment "of all dues and money payments in right of the Church, or by endowment, or in lieu of tithes." That was a source of income of the same nature. Then there was an assessment "of manors and other royalties, including all dues and other sources, or other casual profits." But there was no portion of the schedule which more forcibly illustrated the fallacy of the argument of the hon. and learned Gentleman than that which almost immediately followed: for in No. 3, he found that the same amount was to be placed not only on the landed proprietor, not only upon his tenant, not only on the titheowner, but also upon the owner of mines, of coal, tin, lead, copper, mundic, iron, and other mines; upon "iron works, gas works, salt springs or works." He knew the owner of some salt springs which had failed so entirely as to leave the owner no income derivable from that source. Then there were other kinds of property specified, such as "alum mines or works, water-works, streams of water, canals, inland navigation, docks, drains, and levels, fishings, rights of markets, and fairs, tolls, railways, and other ways, bridges, ferries, and other concerns of the like nature." These, certainly, were undertakings of a precarious nature, yielding sometimes large incomes, and sometimes none at all; these were descriptions of property which came within the limit of the observations of the hon. and learned Gentleman, and were as much entitled to be exempted as any other incomes. Although, at first, he thought there was a considerable degree of plausibility in the plan of the hon. and learned Gentleman, he was now of opinion, that the adoption of that plan would not be making an approximation to justice, and he should, therefore, vote against it.

Mr. Hawes

observed, that the real answer to the amendment of the hon. Member for Bath must be, that the tax, being necessary, it must be imposed with all its injustice, because the injustice could not be remedied. The reply just attempted, was not only a complete failure, but it made out the case for which the hon. Member for Bath contended. The position was, that the fluctuating incomes of professional men ought not to be taxed like the fixed incomes derived from permanent capital, This was the injustice complained of, and how was it attempted to be answered? By showing, that the measure before the House did even greater injustice than the hon. Member for Bath had charged against it. The case of mines had been mentioned; but the owner of the mine was one person, and the worker of the mine another; the first, probably, derived a certain income from his mine; but the worker of the mine, perhaps, was a mere speculator, who might, or might not, derive profit, and who, therefore, ought to come within the exception contemplated by the amendment. It was quite unfair for the Chancellor of the Exchequer to call upon the hon. Member for Bath to point out a tax which was just. All taxes pressed more or less unequally, and all that the hon. Member for Yorkshire had shown, was, that certain other persons— the owners of mines, iron-works, saltworks, &c.—ought to be treated with equal indulgence. The object of the hon. Member for Bath was not to make this Income-tax just, but to render it less unjust—to avoid as much injustice as possible, by taking care that the burden did not fall with heaviest weight upon the weakest shoulders. He would venture to put a case. One man had 10,000l. invested in land, yielding an interest of 3½ per cent, or 350l. per annum. At 7d. in the pound, the tax upon this income would be 10l. Another man had 10,000l. embarked in trade, yielding an interest of 10 per cent., and an income, therefore of 1,200l. per annum. In order that this last owner of 10,000l. should pay no more tax than the former, he ought only to be called upon to contribute at the rate of 2d. in the pound. Both were owners of 10,000l., and yet one was required to pay more than three times as much as the other. Where was the fallacy of the reasoning founded upon this statement? Whether he had over or under-estimated the interest in either case, made no difference in the argument against the two identical properties being called upon to pay so unequally. Capital in trade yielded more interest because the risk was greater, but capital in land yielded less interest on account of the permanent and substantial nature of the property. He would put another case; if a professional man went into the market to sell an annuity of 100l., depending on his own exertions, he would only obtain at most fifteen years' purchase, or 1,500l.; but if the same amount of annuity were secured upon land, the selling party would obtain thirty years' pur-purchase, or 3,000l. Did not this fact show the gross injustice of taxing men in professions and business to the same extent as the owners of land? If the burden were imposed in its just proportions—if it were made less unequal—persons would not be induced to evade it; so that it was, in fact, the interest of the Government to render it as unobjectionable as possible, with a view to its productiveness, as well as to its moral effect on the community. The Chancellor of the Exchequer, though he could not reply to the argument of the hon. Member for Bath, contrived to escape from the difficulty in which he was placed, by selecting peculiar cases of professions or trades, where incomes were as permanent, as if they had been derived from land. The right hon. Gentleman forgot, that these were exceptions to the great rule of trade. Small merchants were not to be compared with great bankers. The investments of great bankers were generally in permanent, though negotiable securities, but the small merchant had his ventures in different quarters of the globe, and his profits were doubtful and uncertain. After all, he hoped, that the arguments of the hon. Member for Bath would be more closely, if not more successfully, grappled with, than by the Chancellor of the Exchequer; unless Ministers were disposed to leave the tax where it was, and attempt to say no more in its favour. The hon. Member for Yorkshire had certainly done his side of the question no service. The House had decided, that an Income-tax should be imposed, and what the hon. Member for Yorkshire had said, only showed, that the arguments against the inequality of the impost were of wider application than the hon. Member for Bath had supposed. When a case of injustice was established, it was no answer to say there were other cases of even greater severity. The proposed amendment had been accompanied by a perfectly simple and practicable mode of carrying it into effect by returning two different sources of income, one to be taxed at 3½d. and the other at 7d. Could the right hon. Baronet show an equally simple and practicable mode of carrying his measure into effect? The argument was not, that the tax could be rendered just, but that a nearer approximation to justice could be made than was attempted by the measure.

Mr. Borthwick

said, that the House had already' affirmed by its decision that it would not consent to a difference in taxation as regarded terminable annuities, and also, that occupiers of land should be charged at the same rate as proprietors thereof, and possessors of other description of property of the same kind. It seemed to him as if the occupier of small farms would suffer most severely, for it appeared that the tax was not according to the amount of income derived from their holding but according to their rent. The rent was fixed, but the income varied with the seasons; and yet they were taxed at the same rate as every other class in society. Taking, therefore, the principle of equality which the hon. and learned Gentleman advocated, a single glance would show that to adopt his proposition as it stood, would lead to the most gross inequality. The hon. and learned Gentleman would tax the professional man with an income barely turning 150l. a-year, at the same rate as the professional man with 6,000l. a-year, though the latter derived far greater advantages from good government, and he would call that equality. This fact went to prove that the tax the hon. Gentleman proposed was to the full as unequal as that which he opposed, and consequently, that if there was injustice in the one principle, so was there equal injustice in the other. If the hon. and learned Gentleman bad fixed a higher rate of taxation upon the larger incomes, and a lower upon the lower, or exempted them altogether up to a certain point, when derived from trades and professions, he should have felt some doubts as to whether he ought not to support his motion, as in his opinion it would be a nearer approximation to justice. It was said by Adam Smith, and quoted by the hon. and learned Gentleman, that every subject of a state had a right to contribute to its support in proportion to his ability; he (Mr. Borthwick) would add he had a right to contribute also in proportion to the benefit he derived from its institutions. If these axioms were admitted, then there could be no doubt that the tradesman with 10,000l. in business had as much right to pay his quota as the agriculturist with 10,000l. in land, as the benefit was the same to both; and, therefore, there should be no inequality in the rate of proportion at which they were taxed. If the hon. and learned Member had moved that all incomes under 200l. a-year derived from professions and trades were to be untaxed, then he might be inclined to support him; but he did not see that there was a step more in advance towards justice in the hon. and learned Gentleman's proposition than in that of the right hon. Gentleman at the head of her Majesty's Government. For these reasons, he should vote for the clause as it stood.

Mr. Labouchere

said, whatever difference of opinion might exist on the question before the House, no one could doubt that it was a subject of the greatest importance, involving a great principle, and one which that House should well weigh in all its circumstances before it came to any decision. He confessed, that he was anxious not to give a silent vote upon the question, both from the circumstance that it was his misfortune to differ on this subject from many Friends with whom he had long cordially acted, and for whose opinion he entertained the greatest respect. He had resisted the Income-tax to the best of his power on the first and second reading of this bill; and, without reverting to the question then before the House, he could not help saying, that if he had not before doubted the policy and propriety of the Government proposing, in the present circumstances of the country, to impose an Income-tax, the discussion which had taken place that night would have greatly confirmed the doubts which he experienced on that question; for a proposition had been brought forward that night supported, it might be by very sound, and also by, he must say, very specious reasons—supported too, he was bound to say, by a great mass of popular favour and opinion out of doors, and brought forward mainly, he was convinced, because the country was not satisfied that an Income-tax, as it had always been understood, was absolutely necessary for the honour and safety of the country; and therefore it was that many people out of doors, and, he believed, a very large number of Members in that House, had been led to adopt opinions and support proposals which under other circumstances they would have opposed. He was warranted by past experience in making this assumption. The Income-tax was no new imposition on this country. It had been imposed during a number of years when this country had been engaged in war with Europe, and during all that time this modification of the tax—specious as it was and popular as it was likely to be—had not only not been received with favour, but he did not recollect that such a proposition had ever been proposed to the House by any Member of it. This only confirmed the view which he took. Under the present circumstances of the country, in proposing a measure of this sort, they were running the risk of undermining one of our greatest resources in war; and, as he had foreseen, and it was now happening, the country would look with a more scrutinizing eye to the tax when now brought forward, than when it was brought forward under the necessity of grappling with great public difficulties. Fearing as he did, that the country could never engage in any extensive war without imposing such a tax, it would then become the duty of every honest and patriotic man to call on the country to bear those burdens which were really necessary for the honour and interest of the country. He had been rather surprised to hear his hon. and learned Friend, the Member for Bath state, that both authority and precedent were in favour of his proposition.— [Mr. Roebuck: I said nothing of the sort.] He certainly understood his hon. and learned Friend to say so; but he did not recollect any public man in that House who had ever spoken on this question who had not laid down this principle— that if an Income-tax were to be resorted to it must be of universal application. If they once began to inquire into the sources of income they got into endless difficulties; in short, they were put between the two alternatives of leaving the tax where it was, or meeting other inequalities equally great and unmitigated. He found, that in the year 1803, a proposition was made to the House by Mr. Addington, though not to the extent of the proposition of the hon. Member for Bath, yet something of the same character. Mr. Addington proposed to give certain advantages to incomes derived from professions and trades; certain exemptions and certain abatements to persons engaged in trades and professions, which were not to be extended to fund-holders and landowners. If any Gentleman wished to read a discussion of the whole principle, he would refer him to that debate. Mr. Pitt came down to the House and opposed the proposition of Mr. Addington in the strongest manner, and really some passages in the speech of Mr. Pitt were so remarkable, that he would call the attention of the House to them. Mr. Pitt's first objection was this; he said:— You are favouring one class of income at the expense of another; that is a very dangerous principle. You ought not to do anything to encourage the flowing of capital from one source to another. What he said was this:— The modes of disposing of capital should not by any means he interfered with through the operation of a partial tax, tending to encourage the application of that capital to one mode in preference to another. Those modes were various. One likes to employ his capital in a business which requires great labour, and from which he looks for proportionate profits; another seeks to derive profits from his capital in great risks: and a third chooses to indulge in laziness, and to enjoy a small profit in security. Of the latter, some resort to the funds, and others to land. It struck his mind, that any attempt to meddle by a legislative measure with this, the usual and spontaneous distribution of property, would he highly injudicious and unjust, would be extremely unequal, and tend to violate the very character of an Income-tax.

Mr. Pitt

also said:— It was proposed in this bill to make various abatements to persons having annual revenue not exceeding 150l., and all under 60l. a-year to be entirely discharged from the tax. From this exemption, however, the landed proprietors and receivers of interests in the funds to such amount were excluded. This was giving certain persons whose incomes were derived from professions and trades an advantage over those whose incomes were derived from real property and from the funds. Mr. Pitt said:— He could not conceive the grounds upon which this exclusion professed to rest. It certainly was, with respect to the funds, a breach of the principle upon which loans had been contracted for, and what effect such an innovation was likely to have upon any future loan he would not pretend to say, but he would maintain, that it was a breach of promise to the contractors for the loans. For this strange difference in the application, he was aware of but one argument which was advanced, namely, that it was fair to take a distinction between the profits of capital employed in industry, and that not arising from the same source. This distinction he thought the very reverse of wisdom.

Mr. Pitt

went on to urge another argument, which he thought well warranted the attention of the House. Mr. Pitt did not put it on the principle of expediency: he thought the principle of public faith was in some degree connected with this subject:— But, above all other considerations, he deprecated the proposed regulation as inconsistent with national good faith, and as calculated to strike the first blow against that credit for which the country had been so long distinguished. In every loan bill the fundamental principle was, that there should be no deduction from the dividends of those who became the creditors of the public Some persons had even carried this so far as to contend, that they ought not to be included in a general tax or income. He was at least confident, that it was inconsistent with the dignity or justice of Parliament to place those who had lent money to the public in a worse situation than at the time when the money was advanced. There was no violation of any compact with the public creditor in making property arising from the funds be considered as a part of general income, but from the moment that the funds were separately taxed, what foundation could the public creditor rest upon in any future loan which it might be necessary to raise for the public service? That was a principle which was equally held on both sides of the House at that time, quite as strongly by Mr. Fox as by Mr. Pitt. We are going," said they, "very near the wind in taxing the property of the fundowner at all; but, from the moment you make these exemptions, it becomes very questionable if you are not violating faith with the public creditor. Gentlemen had quoted and stated very hard cases of persons engaged in professions, and had contrasted their cases with those of the fundholders and great landowners. Nothing was easier than to select cases of that description. Take the case of a clerk in a public office, a man at 160l. or 170l. a year, with a family to support. If the amendment of the hon. and learned Member for Bath was carried, that man would see the 3 percent. taken from his income, while his neighbour, who was a thriving merchant, only paid half the amount on his gains. Hon. Members always talked of landowners and fundholders as of men of large properties; but persons with property so invested had very often but small incomes. A man with only 150l. a-year from the funds would think it a very great hardship if his income were taxed higher than his neighbour's, the prosperous merchant, whose income was derived from trade. An Income-tax was full of these inequalities and injustice, and they might as well attempt to wash a blackamoor white, as attempt to make an Income-tax just. That was the reason why he had opposed the tax; but the House having agreed to the principle of the bill, he for one should lend a very un-willing ear to the principle of a variation in the rate of the tax. In his conviction, the moment they lost sight of the general principle that this was a tax on income, and that every man's income must contribute to the State according to a fixed pro-portion, they entered on injustice, and: they would in the end have no alternative but either to give up the bill, or to involve themselves in endless difficulties, whether any scheme might not be devised, founded on some other principle, which might meet these difficulties, he would not undertake to assert; all that he would say was, that no such scheme had been submitted to the consideration of the House. He had thought it his duty to make these few observations to the House. Having himself a strong opinion on the subject, he did not like to vote against so many of those with whom he had so long been in the habit of acting, if he did not endeavour to state the reasons which had brought him to those opinions, and to show them that it was not without consideration that he had come to the opinion which he had; and, knowing that the opinion which he entertained on this subject was not very popular, he felt that he should be shrinking from his duty if he did not state his sentiments.

Sir R. H. Inglis

said, anxious as he was, that the right hon. Baronet (Sir R. Peel) should reconsider one portion of the bill with a view to the reduction of the burden of taxation on the largest class of the people, and aware that the proposition of the hon. and learned Member for Bath would, to a great extent, effect that object, he yet could not concur with him in the principle upon which he advocated that reduction. The hon. and learned Member proposed to relieve one class; the object which he desired to effect would be to relieve the poor of all classes. He had appealed to his right hon. Friend (Sir R. Peel) on a former occasion, about three weeks ago; he had asked no immediate answer, and he felt that he had no claim to ask any other answer than that which his right hon. Friend in the course of the discussion, might be pleased to give to the suggestion which he had then given. He now repeated it. The proposition to which he had called the attention of the right hon. Baronet was, that he should give to all classes in all the schedules, the same benefit which he had given in respect to persons who nominally had an income of 150l. a-year; that whatever might be the income which any individual might receive he might—as his friend the Member for the county of Durham had stated—begin with the sum of 150l. as the unit. If he relied on the promises of numerical support which he should receive, and he had no reason to distrust them, he felt that he should not bring forward this subject, if he were to bring it forward in the shape of a substantial motion, without some fair prospect of success. But he could assure his right hon. Friend that his object was, not to weaken the great financial measure which he had proposed, and least of all so by the support of those who in no other instance would probably do him the honour of voting with him. It would free the tax from a large portion of its unpopularity if the right hon. Baronet could feel that it was consistent with his duty to begin the tax on income at the point to which he had already called attention. Any one who in that House happened to propose any subject of general interest was sure to receive in the course of the next twenty-four hours so many letters on the subject of the debate in issue, and written with so much evident sincerity, and with the names of the parties attached, as must satisfy him that he had not proposed a proposition unsupported by great masses of his fellow-countrymen; and if he could bring before the right hon. Baronet statements made to him, which he had every reason to believe were most authentic and unexaggerated, he thought that he could justify to him the proposition which he had had the honour to make. His right hon. Friend the Member for Taunton had referred to the cases of clerks at 154l. per annum. Now, one of the letters to which he had already adverted stated just that case. It was the case of a gentleman having an income of 155l. upon which he had to maintain the appearance of a gentleman. He stated he was now sixty-four years of age, that he had had a family of thirteen children, five of whom were even now burdens upon him, and, besides them, he had an aged relative, a lady, ninety-one years of age, dependent upon him; and that to take from him the amount which the proposed Income-tax would take would be a very severe punishment upon him. He knew that his right hon. Friend at the head of the Government had said, no doubt with great truth as it regarded the larger incomes, that the effect of the tariff, with which he meant to accompany this Income-tax, would so diminish the price of articles of consumption as considerably to relieve those upon whom he meant in the first instance to impose the burden to which he was now adverting. But ordinarily the reduction of prices would have reference to the cases of luxury, and in very few instances would it apply to what might be called necessaries. These reductions would benefit persons with 6,000l. and 10,000l. per annum; but would afford no relief to such individuals as the gentleman to whose case he had called the attention of the House. There were classes of the same kind who scarcely ever tasted butcher's meat, and to those classes the reduction in the duties on sugar, coffee, or any one of the 1,200 articles mentioned in the tariff, would afford no relief or benefit— at all events, it would be very slight. There were individuals whom this tax would effect, who had not what that House would scarcely call luxuries, but which the butlers of many hon. Members on both sides of the House would call necessaries. It was not, therefore, to that one class of individuals whom the hon. and learned Member for Bath had taken under his protection that the remission which he asked would be advantageous, it was the poor of all classes under all the schedules of this bill that the remission of taxation which he respectfully submitted to his right hon. Friend at the head of the Government would apply. His right hon. Friend must remember, that unpopular as any tax must always be, it was a great object to diminish that unpopularity as much as possible. The House knew by the returns which originally had been moved for by Mr. Baring (Lord Ash-burton), showing the different amounts of dividends now distributed, that there were about 89,000 whose dividends were under 5l.—he spoke only from general recollection; and 64,000 whose incomes from the same source were under 10l. He did not mean to say, that these were individuals who would be sufferers at all by the proposition of his right hon. Friend, or that they would be relieved by that of the hon. and learned Member for Bath. He alluded to it merely as an illustration of the truth of the assertion that the property of England, notwithstanding that there was the law of primogeniture — notwithstanding there was a strict entail—notwithstanding that this country was the most aristocratic in feelings of any country in Europe— there was a larger subdivision of property in this country than in any other. The greatest number were comprised in the class of those who had 150l. per annum. His object was not by any sudden leap from 150l. to 151l. to take 4l. 10s. from the possessor of one of those incomes, and to leave the other free, but to give to the individual who had 200l. a-year the same remission as would be given to the man of 150l. income, making him pay only on the surplus 50l., and in the same way the man of 250l. pay on the surplus 100l. He was sure his right hon. Friend was as intensely anxious as any man to promote the welfare of his fellow-subjects, and that he could have no other wish than to discharge his duty to the Crown and to the community, by raising as large a portion of the revenue as he could with the least possible inconvenience. But he submitted that his right hon. Friend had greatly understated the amount of revenue which he would receive under the present bill, if carried into a law as it stood. He was sure from what he had heard that his right hon. Friend would receive so much larger a sum from the metropolis alone, that he could not but think he would be able to make this concession, which he (Sir R. Inglis) again ventured humbly to submit to him. He (Sir R. Inglis) had made some calculations, but with them he would not trouble the House, because he could not rely with absolute certainty upon their accuracy; but at the same time he could not but believe that, though his right hon. Friend might lose upon the smaller sums, yet in the aggregate he would gain in the amount of revenue by the adoption of this plan, which would remove unpopularity, relieve those upon whom the burden would be most grievous, and which was better than any suggestion which had yet been offered for those purposes. Not wishing to embarrass his right hon. Friend, though knowing he could carry his proposition by the assistance of those who did not agree with him in any other points, he would not put it to the vote. He submitted it, however, to his right hon. Friend, and he should feel grateful if he gave it his consideration, and doubly grateful if that consideration should induce him to give the suggestion his support.

Mr. V. Smith

said, he hoped his hon. Friend opposite (Sir R. Inglis) would not think he meant any disrespect to him or to the House, if he did not enter into the foreign question which his hon. Friend had introduced on the present occasion. He would not say, however, that if his hon. Friend should at the proper time intro- duce his proposition as a substantive motion, he would not give it his support, if from such a quarter his hon. Friend would receive it. He was extremely rejoiced that the question had been raised on the present occasion by the hon. and learned Member for Bath, first, because, among all the long and arduous debates which had taken place, this certainly, was the most damaging to the Income-tax; and, secondly, because he could not agree with hon. Gentlemen who said, that the House was not to consider the details of the measure, but to take it as a whole; it would be the greatest of all pities to improve or alter in any way. He thought it was the duty of the House to mitigate the evils of this bill, and he must say, that no answer whatever had been given to the proposition of the hon. and learned Member for Bath. He had pointed out the great injustice which would be worked upon the classes he sought to protect, and it was no answer to say, that there were other injustices, and that, therefore, the House ought not to proceed to remedy this particular injustice. The hon. and learned Member for Bath had pointed out an easy remedy for this injustice, and if any other hon. Member pointed out any other injustice to which an equally easy remedy could be applied, he for one, wag prepared to give him his support. He did not agree with his right hon. Friend the Member for Taunton, that this was that sublime war tax with which they had nothing to do in the way of amendment; but whether it was a war-tax or not, he could not help observing, that we had never been said to be in such a state of emergency as to be compelled to impose it, except as a war-tax, and such only, although the right hon. Baronet himself did not even say, that it might not be so modified as to be available on future occasions in a greater degree of intensity. But to proceed now to the particular pro-position of the hon. and learned Member or Bath. The right hon. Gentleman, the Chancellor of the Exchequer, had said, that this was a tax which had been adopted in preference to some other tax, which would have borne equally heavy upon the professional income. But he begged to declare his belief that such was not an argument applicable to this case, because whatever other tax might be proposed, so long as it was not in the nature of direct taxation, it might be avoided, and so its operation would, to a certain extent, be got rid of. The hon. Member for Liskeard, the other evening, had stated a very strong case of a life annuity, to which he wished to refer. He had spoken of a gentleman, a member of a profession, forty years of age, who by his exertions made 5,000l. a-year, and who had a mother aged eighty, who received 500l. per annum under a life annuity, and he had argued that it would be the greatest injustice that the mother should be taxed while her son escaped under an exemption. He admitted that there would be great injustice in the case, if the proposition of the hon. Gentleman were carried out to its full extent, but by the motion now before the House the difficulty against which he had contended would not arise, because that motion did not propose to exempt professional incomes altogether, but to reduce the amount of taxation on them only by one-half. Against such a proposition as the entire exemption of such incomes, he should undoubtedly give his vote, but the motion of the hon. and learned Member for Bath was of an entirely different character, and was founded upon the supposition that the imposition of one-half the amount of taxation on professional incomes would place them in a position of equality with permanent incomes. For his own part, he believed that the tax upon professional incomes was by far the greatest injustice which was proposed to be perpetrated under this bill. A professional income could not be ranked as an estate for life, or as an estate which would fail only with the necessity for its continuance, but it was an estate which endured only during health. It depended, as the hon. and learned Member for Bath had suggested, not merely upon the will or the ability of a man to labour, but in many instances upon the temporary fashion to employ him, and it was impossible to calculate even from year to year how long that fashion might continue. His right hon. Friend the Member for Taunton had referred to a speech made by Mr. Pitt, and undoubtedly his arguments were entitled to great weight; but when Mr. Pitt had said that all incomes should be taxed equally, he thought that must be viewed as one of those wholesale arguments which could have little influence in such a case. The principle of an universal equality of the tax, to his mind, could not be supported, for he could hardly see how the fundholder was lobe benefitted, by a gross injustice being done to the holders of professional income. He could not help expressing a feeling of regret, in which he thought the hon. and learned Member for Bath would agree-that that hon. and learned Member, seeing so many of the evils of this tax, had not been prepared to give a more general opposition to the measure, and that he should have ever declared his belief that this was a bold, comprehensive, and honest measure.

Sir R. Peel

I was rather surprised to find that the right hon. Gentleman who has just sat down would vote in favour of the proposition of the hon. and learned 1 Member for Bath, because he says, that whenever you can do justice you must do it; but there is a clear distinction between the cases of trades and of professions, and there is a peculiar aggravation of the injustice which pervades this bill, in respect of professions, which does not apply to trades. The right hon. Gentleman, therefore, should make a distinction between trades and professions, and should propose that they should be made subject to different rates of taxation. And it will he no answer, according to the view which he has taken, that there will be a difficulty in doing so; for there will be no greater difficulty than that with which the hon. and learned Member for Bath has to contend; and it is clear that, according to his principles, he cannot support the motion of that hon. and learned Member, but that he should rather strive to apply a rule to professions different from that which he would apply to trades. I think, however, without going any further into this point, that we should on this occasion confine ourselves to the discussion of the question, whether it would be just according to the principles on which this House usually acts, and fitting as regards the interests of the public, that a distinction should be made according to the source from which the tax is to be derived. And I will first observe, with regard to the right hon. Gentleman the Member for Taunton, that I concur with him both in the vote which he is about to give, and on the general grounds upon which that vote will rest. The right hon. Gentleman assumes, for the sake of argument, that the House is right in imposing an Income-tax, and he says that if that be a just and an expedient course to take, there should be no exemption on account of any supposed difference with regard to the means of obtaining the income of the person taxed. I differ from the right hon. Gentleman in this; and I retain the opinion which I originally expressed, that if you have to raise 3½ or 4 millions of money, under the present circumstances of the country, there is no manner in which it can be raised with less of embarrassment or inconvenience to the community than by imposing a tax upon income. 1 repeat that I retain the opinion which I have always expressed, and that all the discussions which I have heard upon the subject, have only confirmed my impression, that on the whole, there is no other course by which the same end could be attained, and less of injustice done. The hon. and learned Member for Bath, in referring to this part of the subject, has alluded to the maxims laid down by Dr. Adam Smith, with regard to the principles of taxation. Those maxims are— The subjects of every state ought to contribute towards the support of the Government, as nearly as possible, according to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state. Secondly, the tax which each individual is bound to pay, ought to be certain and not arbitrary. Thirdly, every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it. Fourthly, every tax ought to be so contrived as both to take out, and to keep out, of the pockets of the people as little as possible, over and above what it brings into the public treasury of the state. From these maxims a recent writer has drawn this conclusion, that there is not one of those maxims taken on the whole, or scarcely any part of any one of them taken distinctly, which a tax on income does not more fully confirm than any tax of any other description; and that writer refers to these propositions for the purpose of showing that the tax on incomes is more just to all classes of the community, and particularly to the great consuming classes, than those taxes which are derivable from any other source. And I must say, that if we had attempted to levy this amount of taxes, either on articles of consumption, by an increase of the window-tax or of the assessed taxes, or by a house tax, the particular class which would have been peculiarly subject to the additional burdens to be imposed, would have consisted of those persons who derive their incomes from professional employment; and I say again, that this Income-tax has this advantage over all other taxes, that the wealthy man cannot escape its operation by withdrawing himself from this country, for whether he remains here, or absents himself altogether from this country, so long as he derives his income from this country, he is still open to the operation of the tax. With regard to the particular exemption sought to be established by this motion, I agree with the right hon. Gentleman, the Member for Taunton, and I cannot help thinking that whatever course that right hon. Gentleman may take—whether it be a popular or an unpopular course—it is, under all circumstances, only that line of conduct which is dictated to him by purely conscientious motives. I will now address myself to the arguments of the hon. and learned Member for Bath. He spoke very warmly on the great responsibility which devolves on me individually on account of the decision to which I have come on this subject. I can assure the hon. and learned Member, that when I have arrived at a conclusion that a particular course is the just course for me to take, with regard to amount of responsibility which devolves on me, I am prepared to undertake it all, for I think that it is a responsibility which I ought to bear. Now, the hon. and learned Member agrees with me that the Income-tax, subject to those modifications which he has stated, is, on the whole, the most just impost which could be adopted. I make the proposition as it now stands before the House, and he does not propose to remedy any one of the evils alleged against the tax on account of its inquisitorial nature. [Mr. Roebuck: We have not come to that yet.] Speaking of the hon. and learned Member's proposition, the inquisition into the incomes derived from trades and professions must equally take place, whether the amount to be levied be 3½d. or 7d. in the pound; and the inquisition so much complained of, would be only aggravated under this new proposition, because the same objectionable mode of ascertaining the income of a person must be put into operation for the purpose of levying a smaller sum than would be raised under my proposition. His motion, therefore, has not for any part of its object the application of a remedy for this alleged defect, but his proposal is simply this, that other incomes being subject to taxa- tion to a certain amount, the income derived from trades and professions shall only pay one-half. I object to that proposition, because I think that an adherence to the plan brought forward by the Government would work less injustice than would be produced by such a system being adopted. We proposed to levy a tax on the income of the country to enable us to supply the deficiency in the revenue, but at the same time we seek to make an abatement in the cost of articles of consumption, in the hope to benefit all classes, hut more especially those classes of which the hon. and learned Member is the advocate. The other night the hon. and learned Member appeared to view the justice of my proposal in a different light, and he argued that if you could make any distinction whatever, it should be on account of the permanency of the tenure of property; for when I went on to show the difference in respect of real property, as to the permanency of tenure, he said, that in every case he would make a proportionate abatement. That is not his proposal now, I understand the justice of what he said then. I can understand your saying that in respect of all income, from whatever source derived, we should look to the duration of the interest of the holder of it, and subject all persons to a proportionate tax. The hon. Member says now, "I will leave the income arising from real property subject to the Income-tax, but I will take one particular species of income which shall be exempt from it." But what has the hon. Member done? He has agreed to schedule A. being passed; he has agreed that "for all lands, tenements, and hereditaments, or heritages, in Great Britain, there shall be charged yearly, in respect of the property thereof, for every 20s. of the value thereof, the sum of seven pence." He has not proposed any distinction to be drawn according to the duration of such income; but he says, "I will take the case of the fee-simple of an estate being vested in a particular person, and I will compare the value of the income arising from such estate, with an income derived from the professional exertions of a man;" but I say the hon. Member is not at liberty to do so. He has not proposed to say to the owners of an estate in fee-simple, "You can sell your estate for twice the value for which you would sell it if you possessed only a life interest in it, and therefore a distinction shall be made in your case, and the person enjoying only a life-interest shall pay less tax than you;" but the hon. Member says, "No matter what your interest may be in landed property, all owners of such property shall be subject to an equal rate of taxation." The hon. and learned Member, then, has subjected the owner of an estate in fee-simple, and he who has only a life-interest in an estate, in like manner, to an Income-tax of 7d. in the pound, without making any distinction as to the difference of the tenure of their respective properties—he has subjected the occupying tenant to the Income-tax, without any reference to the nature of his tenure—nay, he has taken the man who holds his property at the will of his landlord, who is subject to be turned out of possession by a six months' notice— whose income depends upon his landlord's will, and upon the vicissitudes of the season—who has no permanent holding of his property, and whose tenure is not half so good as that which the surgeon, or physician, or the lawyer, possesses in respect of his income—he has said to the occupying tenant, "You shall pay according to an assumed rate of profit; your profits shall be assumed to be equal to one-half your rent;" but, then, without reference to the uncertainty of that profit, or of the tenure, the hon. Member has said to him, "You shall contribute to this tax at the rate of 3½d. in the pound" —he has said that the holder of a terminable annuity should pay 7d. in the pound—he has determined, without raising any question at all, that in the case of a man who has sunk 10,000l. in the purchase of an annuity for life, he shall be subject to a tax of 7d. in the pound; and yet he now seeks to draw this distinction in favour of persons whose position I may say, without hesitation, is far more fortunate than that of many of those to whose taxation upon the full scale he has offered no objection. If the test of the hon. and learned Gentleman is a good one, let him go into the market and ask what is the value of the various incomes to which I have alluded, and let him apply his test in reference to the answer which he will receive. Then, by a future schedule, I am about to subject the holders of office, without any exemption, to the payment of a tax of sevenpence in the pound. All clerks in public offices, all those holding- office during pleasure, are to be required to pay a tax of 7d. in the pound on their incomes. If the uncertainty of the tenure of incomes were to prevail at all in the consideration of the question, I should think, from the experience of late years, that holders of high political offices were entitled to some favour. But it is proposed that all those who are in this position, who have devoted all their abilities to the public service in the various civil departments of the State, shall be called upon to contribute 7d. in the pound on their income, equally with the holders of property in fee simple. I will take the case of all military officers receiving half-pay, or receiving full pay and engaged in the performance of their duties: it is proposed to subject them to this payment of 7c!. in the pound on the amount of the income which they may derive from their exertions in the public service; and then I say, if you do subject incomes of this kind, so different in their tenure from those arising from fixed property—if you do subject the clergyman of 300l. a year, who holds property which is, no doubt, of a permanent character, namely, his tithes, and his living, but whose tenure of it is most precarious —if you do subject him who receives an income with important professional duties attached to it to a tax of 7d. in the pound—reviewing all these cases, I contend that there is more of justice in subjecting the professional man, and the person whose income is derived from trade to this tax, than if I continued all these classes subject to the Income-tax, but said that with respect to trades and professions there should be an exemption. [Viscount Howick: An exemption is not asked for.] No; but an abatement of one-half is asked for, resting on an entirely arbitrary rule. If you ask me what would be the public impression if I gave way to the proposition of the hon. and learned Member, I must say that I think that if I did subject the widow with a jointure only enduring for her life—the holder of a terminable annuity, the clergyman, the admiral, the general, and all those other classes to which I have referred, to an equal amount of duty with the holder of property in fee simple,—but should now take the wealthy physician, the lawyer making a large professional income, and the great banker of London, and relieve them from their liability, my opinion is, that the public impression would be, that this House would be guilty of great injustice in sanctioning such a course to be adopted. If trade has been unproductive, we do not seek to tax it upon any assumption of profit. If on the average of the last three years, the employment of capital in trade has been accompanied by no return, an exemption from payment will be the consequence. The levy is to be taken in most cases, where the trade has continued for more than three years, upon the rate of profit derived from the income of the trader during the preceding three years. Allowances and deductions are made in these instances, where, I must say, none are made with respect to the landed interests. In the cases of professional men deriving an income of from 2,000l. to 4,000l. per annum from their exertions, whether they be physicians or lawyers, I apprehend that they have as great an interest in the maintenance of the tranquillity of the public credit, as many of those classes who would be supposed, by their immediate connections with the country, to be more particularly desirous for the stability of our institutions. So, also, in case of persons engaged in trade, who are as deeply interested in the due support of the credit of the country, at least, as naval or military officers. Therefore it is that I contend that the hon. and learned Member is not carrying out those great principles for which he contends, but which I admit to be incapable of execution; because, in order to effect such an object, you must have an inquisition ten times more rigorous than that which is proposed. As I have already said, I do not consider the proposal of the hon. and learned Member a just one; if I am to have the Income-tax—and I will not now stop to consider whether it is a proper tax or not, because the principle has already been adopted by the House—it does appear to me, that it is both just and manifestly expedient that all descriptions of incomes should be subjected to it; whether it be a time of war or peace makes no difference whatever; there is no distinction in this case with regard to the period at which the tax is to be imposed. My right hon. Friend, (the Chancellor of the Exchequer) said truly, that there was no clamour raised against the application of this tax to professional incomes during the war; and I say, there was none, because it was felt, that to raise such a question would have been to attempt to introduce an unjust distinction. If the distinction is unjust in the time of peace, it is clearly equally so in the time of war. If the income derivable from trade, on account of the fluctuations of trade, ought to contribute less to the State than the income derived from land, what reason is there why that rule should not hold in time of war, as well as in time of peace? If you admit this principle, you will establish a principle which you must admit in time of war, and you will admit that the taxation which existed in 1803 and 1806 was unjust. And whatever may be the emergency or necessities of the country in time of war, you have nothing to do but to tax landed property at 12 per cent., and professional incomes at 6 per cent.; and if that is not sufficient, you must tax landed property at 20 per cent. in time of war; and incomes derivable from professions at 8 or 10 per cent. Nay, I can show good reasons why such a distinction should be drawn in time of war rather than in time of peace. The tendency of war is to increase the value of landed property. That effect was certainly produced during the last war; and war also has a tendency to depress commercial enterprise, and to interfere with the profits of trade. If it be just to make this distinction, then, in time of peace, it is equally so in time of war. It is quite clear that, if the justice of the principle now urged be admitted, upon some future occasion it will be said, "True, you want twenty millions, and you must raise it by an Income-tax; but if it be unjust to subject us to the burden, raise three-fourths on land and one-fourth on us." And, therefore, I think that the establishment of such a principle as that which is contended for by the hon. and learned Member, is open to more objections than that which is based upon the maintenance of the nominal equality of taxation. The amount of duty now proposed by the hon. and learned Member is 3½d. in the pound, but he leaves the question open to the consideration whether that contribution be just or not. He claims for his proposition that it will do rough justice," but there may be parties in the time of war who will think it desirable to smooth down his injustice, by still further removing the liabilities to the imposition of which he consents. When I consider the whole of the circumstances of this case—that if I call I on any particular interest to part with its protection—if I abolish the prohibitions on the introduction of the produce of foreign countries competing with England, it is in the belief that I am in the course of passing financial and commercial measures to benefit the trading classes of the community of England, whose decline must be accompanied with that of other classes, and that I still believe that the first effect of that commercial tariff will be to benefit those who, in the first instance, derive their property from trade. I believe there will be no persons who will derive more benefit from these measures than those who are necessarily resident in this country; and I hope, and trust, and believe that they will, in the diminished cost of living—not merely in the articles of produce of this country, but from the general effect of the tariff in respect of the manufactured articles of other countries, derive advantages which will afford an ample compensation, even to members of professions and trades, for a great part of the reduction which I shall make in their incomes, in asking them to pay out of any of their incomes amounting to 300l. per annum, as little as 8l. in three years. And it is on these grounds that I must adhere to the proposal which I originally made, which I believe to be more in accordance with justice than the principle involved in the amendment of the hon. and learned Member for Bath, and I am not to be deterred from any fear of the responsibility from a firm adherence to that which I believe to be most consonant with justice, and most for the public benefit.

Mr. Labouchere

felt, that the right hon. Baronet had mistaken some part of his argument. He said, that he conceived that, with respect to the Income-tax—the proposition of which was naturally not very satisfactory to the payers of it—that there was a disposition to break down particular parts of it at present, and which, in time of war, must be necessarily continued. He did not say that there was any more ground for making a difference in the operation of the tax in time of peace, than in time of war. He believed that if they made exceptions in times of peace, it would be found absolutely necessary to make similar distinctions in time of war.

Viscount Howick

remarked, that with all the ability which the right hon. Baronet had brought to bear on this subject, the whole result of the speech which the right hon. Baronet had addressed to the House, had been met in argument by anticipation, by the hon. and learned Gentleman who had proposed the amendment, when he alluded to the circumstance, that after the exceptions he had proposed to make, other cases of injustice would still exist. This was the sum and substance of the argument of the right hon. Baronet. The right hon. Baronet showed the very different degrees of permanence under which landed property was held. He said, that the circumstances under which it was held, were so various, that it was utterly impossible in any way to deal in just and equal fairness with the circumstances of each case. The inference, then, from this opinion was, that the tax was an unjust tax, and the result of the determination of the right hon. Baronet was, to bring a measure into operation by which the tax must retain all its injustice. He was compelled to differ from the right hon. Baronet-looking to the present circumstances of the country—as to the necessity of such a tax, and also as to the declaration which he had made, that an Income-tax, would fall with less pressure and injustice on all classes of society in this country than any other which he could impose. The right hon. the Chancellor of the Exchequer had also stated, that the charge of inequality which was made against this tax, could be made with equal justice against all other descriptions of taxes, and that similar inequality would be one of the effects of imposing any indirect taxes. He did not believe, that this was the effect of these taxes in general, but that their operation was to make the burden fall in due proportions on the expenditure of each individual. They had their taxes imposed on the necessaries and luxuries of life —upon articles of general consumption, and upon horses, servants, carriages, &c.; and, according to the expenditure of each, the tax-gatherer would slip in and tax each person according to his available income. The State did not say how much each man should expend, but he was told, that according to what you think proper to spend, in that proportion you will be taxed. This was the general system of taxation in this country. Now, what was the case of the professional man? The tenure of his income was necessarily of a very uncertain character, and it could not last for a very long period. For the purpose of providing for his family, he expended only comparatively a small portion of his income and put by the remainder, and of course contributed to the revenue in proportion to his expenditure. A person, however, whose income was derived from a more certain source, could afford to expend more, and of course he contributed more to the taxation of the country. The general result, then—for they could not look with nicety into each case—was, that each person under our present system of taxation contributed in due proportion his share to the public revenue. It might be said, that by your present system you let the taxes fall upon professional men, while persons with a fixed income could escape them by living abroad. Now, he believed, that if they changed the system by which they increased immensely the burdens of the people without adding anything to the revenue—namely, in the shape of protecting duties—that nearly all ground of complaint would be removed. His own conviction was, that there was no country in which a person could live more advantageously than in this country, be his income large or small. He, therefore, did not think that this was so just a tax under the circumstances of this country as the right hon. Baronet represented. Upon this point, however, the House had already decided, therefore he would not advert at greater length to the matter. He admitted, after the decision which the House had come to, that an Income-tax must be imposed; but modify its character as you pleased, you could not help making it still unjust and unequal in its operation. But, as the House had decided on imposing it, the House should take care that it should fall with the least possible weight and inequality on all classes. He had heard it stated, that it was true, that this was a case of injustice, but if they adopted the amendment of the hon. and learned Gentleman, other cases of injustice would remain unredressed, but this reason did not diminish the hardship upon those who would suffer in the way pointed out by the hon. and learned Gentleman. He would say, deal with this case of injustice, and proceed to take the other cases of a similar character as you come to them, and so arrange the tax as you would the better enable all classes to bear it. It was true, that the right hon. Baronet might again point out an instance of a person holding an estate in land for a short period; it would, therefore, be unjust to tax him in the same ratio as a person having a more permanent holding. Again, it might be asked whether an aged person, having a life interest in property, should be taxed in the same proportion as a young person holding a property in perpetuity; and they were asked how the calculations of the amount of tax in each case could be made. He would pass them by as not having any direct relevance to the general principle embodied in the hon. and learned Gentleman's motion; but taking the whole amount of professional incomes, and the whole amount derivable from more certain sources, he would ask whether it was not fair to make a difference in the tax on those incomes derived from the exertions of men, and on those obtained from realised property. This argument had been so ably stated by the hon. and learned Member for Bath, that it was altogether unnecessary on his part to go into it. It was so obvious, that professional men, as regarded their incomes were in so different a situation from the holders of landed property, that it was quite unnecessary to attempt to prove it. There was one other point to which he would call the attention of the committee. The right hon. Gentleman said, that if they applied an exception to the rule to incomes derived from professions, that there were other cases in which they would in justice be bound to apply the same rule. The right hon. Gentleman put the case of a farmer. He said, that the tenant of a farm might be dispossessed at a very short notice by the owner of the property, and might be called upon to give up his farm suddenly, and notwithstanding the uncertain tenure in which he held his means of obtaining an income, could you impose a tax larger in amount on him than on a professional man? Now, he considered, that the farmer did not necessarily lose his income because he was suddenly dispossessed of his farm, for his income was derived from the employment of his capital in the cultivation of the land which he held, and if he was dispossessed of his farm he would take his capital with him, and would find some other means of employing it. If, as the hon. and learned Gentleman had stated, there was something peculiar in any case of trade, or as regarded the farmer, there would exist, if this motion was agreed to, an indisputable right to have the matter considered. He did pot think, however, that they should make a different rule for traders in commodities and those engaged in the trade of agriculture. If, however, it was thought desirable to make some exceptions on this account, they could easily adopt some change in the arrangements with respect to the farmers. Then with respect to the alleged uncertainty in the profits on incomes derived from mines, he could only observe they had not yet come to that part of the bill, so as to determine whether they should be placed in one schedule or another. When they came to the subsequent part of the bill, if any proof could be adduced of the propriety of modifying the tax, as regarded this description of property, it would be just to do so. In the same manner, also, with respect to tithes, and to officers in the army and navy, they would hereafter have to deal with that part of the case, and they could make such alterations as justice required. There was a manifest distinction between all these cases and income derived from a man's personal exertions, by exerting his talents in following one of the various professions. The income thus derived was not merely dependant on the duration of a man's life, but on a thousand different causes of uncertainty which apply to this description of cases, but not to others. Was it not notorious to every one whether a professional man was not always in an evident state of uncertainty as to the continuance of his income from the continuance of his health, and from various other causes. Should they not, then, make a deduction from the amount of this tax in proportion—as nearly as they could calculate—to that uncertainty? The right hon. Gentleman had spoken of the matter as if it were intended to except professional incomes altogether from the payment of the tax. But this was not the case, for all that was asked by the hon. and learned Gentleman's motion was, that from these kinds of income you should make a deduction in the amount of the tax. They admitted, that as long as you had this tax, all kinds of income should be taxed; but he could not agree in the justice of taxing them in equal proportions. The right hon. Baronet had said, that if this amendment were adopted, it would leave the odious character of the inquisition the same, and that it would even be more objectionable if it were employed for the purpose of raising a very small sum of money. That, he thought, was an objection to the whole of the right hon. Baronet's measure. He agreed in the opinion expressed by the right hon. Baronet in 1833, that for the sake of 3,000,000l. or 4,000,000l., it was not worth while to resort to an Income-tax with all its inconveniences. That was an opinion which he had shared with the right hon. Baronet in 1833, and he did not change it with him now; but he did not see why the objection urged by the right hon. Baronet might not be met by having a still larger Income-tax, and relieving the people of some of the burdens which still pressed upon them very heavily. The right hon. Baronet said, the principle of this bill was equally applicable in war as in peace. No doubt of it, and it was because he could not help fearing that if once it were established—if the people got used to the inquisition and its odious character, we should be exposed to its burdens for a long time, and on that account he was extremely anxious that the measure should be carefully considered and rendered as just as possible. The right hon. Baronet also said that the mode now proposed of imposing the tax was the same as before, and that he believed there had been no complaint against it during the war, and added, that its injustice was, if possible, greater in war, because the events of the war had a tendency to raise the value of landed property. He believed the reason why it had not been more objected to, both by the landed and other classes, was to be found in the circumstances of the war, which prevented the burden from being severely felt. We had then a currency daily depreciated—an accumulation of debt—the country anticipating its prosperity was living upon its resources, and an artificial prosperity was created, which prevented any class from feeling the tax as it otherwise would. Professions and trades felt it less than they would now, because there was a demand on the services of every man who could raise an arm in the service of the State, and the army carried away many who might otherwise have engaged in professions or trades, and there was not the same difficulty in finding employment in any branch of business that there was now. The state of things was completely altered now, for no man could look round him without perceiving that professional persons felt severely the effects of the intense competition which took place in every profession, trade, and employment, and it was at the moment of this diminution of the profits of all business that this oppressive tax was to be imposed. He should only add, that if the principle of the amendment were adopted it would be worthy of consideration, in determining upon the details, whether a distinction should not be made between those profits which were the profits of capital, and those which arose from the personal exertions, application, and industry of the individual. It was the personal reward of personal service which he wished to see relieved from the tax, and not the profit arising from the employment of capital. He admitted that the amendment in the shape in which it stood at present did not fully carry out that view, but it embodied the principle, and if the House decided in its favour, the details could be so modified hereafter as to carry into effect the principle, and it was for the principle only that he now voted in support of the amendment.

Mr. E. Butter

thought the amendment would produce greater inequalities than the bill itself, and he should therefore vote against it. By adopting the amendment of the hon. and learned Gentleman the tax would be made more unequal than it was even in its present state. If, however, the proposal had been to enter a review of all those cases which had a just claim for exemption, he for one would have given it his support. But, at the same time, he should have a very different opinion of the right hon. Baronet's intelligence and ability, as a minister and statesman, if he allowed "a spirit of health, or goblin damn'd," to induce him to give way, and enter upon such inquiries. He protested against the tax on the whole as unjust, demoralising, and unequal.

Mr. Wallace

had listened with great attention to what bad fallen from the hon. Member for Bath, and he must confess, that he had not heard one word that in any way controverted his statements. He thought the right hon. Baronet, and those who had spoken from the other side of the House, bad totally failed to upset any of the arguments of his hon. and learned Friend. He wished to know from the right hon. Baronet on what ground he required the mercantile interests to pay the tax upon the calculation of their income for three years, instead of one? For his own part he could not see why they should not pay upon the last year as well as other people. He thought that those who had a fixed income ought to be placed in a different situation to those adverted to by the hon. Member for Bath. He did not believe it was justice to exact from the trading interest a tax based upon any other principle than the last year's income, and he should put a notice on the paper to that effect. He should most cheerfully vote in favour of the proposition of the hon. Member for Bath, and when that was disposed of he would vote for the motion of the hon. Member for Rochdale.

Mr. James

wished the right hon. Gentleman opposite to inform him if insurances on lives were to be taxed 3 per cent. under the measure now before the House; as, in his opinion, it would be a gross injustice to subject premiums to taxation. A man might have some chance of defending himself against the sword or pistol of the highwayman, but he had no chance of defending himself against an injustice such as this. He should give his support to the motion proposed by the hon. Gentleman near him (Mr. Roebuck).

The Chancellor of the Exchequer

was not quite sure that he understood the question of the hon. Gentleman; but if he meant to ask him whether insurance offices were to be subject to the payment of a tax of 7d. in the 11. on the premiums for insurances, he begged to say that that was not the case—insurance offices would pay on their profits or gains, and not on the amount of money paid for premiums.

Mr. Leader

had listened very attentively to the arguments which had been brought forward in favour of and against his hon. and learned Friend's proposition, and, without meaning offence to hon. Gentlemen opposite, and the two or three hon. Gentlemen on this side who had opposed his hon. and learned Friend, and though he was afraid the majority would be against him, he must say that the weight of argument was entirely on the side of his hon. and learned Friend. As to the statements made by the right hon. Gentleman (Mr. Labouchere), and the hon. Member for Stafford (Mr. E. Buller), it appeared to him that they did not speak against the motion of his hon. Friend because they had any strong opinions against it, but merely because they considered it might be some improvement of the details of the measure, and they wished the bill to go forth in an unpopular shape. They evidently considered the tax odious, and one that would make the Government unpopular, therefore they declined being parties to any alteration that was calculated to make it less oppressive. He desired to call the attention of the right hon. Gentleman opposite to a passage contained in the speech from the Throne at the beginning of the Session. Her Majesty said, she Viewed with very great regret, the continued distress of the commercial and manufacturing interests; and he must say, that a greater discouragement to trade than this schedule D of the Income-tax he could not well imagine. He complained that it would operate unequally, and contended that 1,000l. a—year derived from trade did not represent more than one—third of the 1,000l. derived from land, and yet it was intended to tax both alike. He believed that schedule D would make the tax unpopular; and if hon. Gentlemen knew their own interests, they would not give it their support. It was this part of the tax which would fall especially on the constituencies, on those who would have to decide at the next election whether or not the present Government should continue in office. It was said, that when a Tory Government came back to power, we should have flourishing and prosperous times once more. What was the fact? Why, in the metropolitan districts, he had been informed from the best authority, there had never been such a bad season for trade as the present. Bankruptcies were taking place in every street, and in Westminster people were falling by streets instead of houses. And that was the time at which they determined on levying a tax on their profits. Aye, they were small profits now; but it was proposed to tax them on the average of the last three years, and not on what they were at this moment. He admitted it to be the duty of the State to tax persons according to the protection given them; but to tax trades and professions the same as incomes from land was to make them pay an amount disproportioned to the protection they received. There was a feeling abroad among the middle classes, trades, professions, and manufactures, that this House, representing a predominant landed, interest, did show favour to that particular interest, and did not act justly towards other classes. [" No, no."] He repeated, there was that impression abroad. The hon. Member for Knaresborough might say "no," if he liked; but that was the fact, and they had an instance of it the other night, when the hon. Member for Lewes brought forward his motion for equalising the probate and legacy duties. He had little doubt that, on this occasion also, they would furnish another instance of the careful attention which they paid to their own interests.

Lord J. Russell

said, he should be sorry to occupy the attention of the House after the lengthened debate which had already taken place; but he could not reconcile himself to give a silent vote on this question. The hon. and learned Gentleman who had brought forward the motion before the House had stated, with his usual clearness, the arguments in its favour, and had endeavoured to answer that which was the chief argument used by the right hon. Gentleman on a former occasion, and which he had again used to-night. The right hon. Gentleman said, if you adopt a principle of this kind, see that you apply it fairly, and include those who have life incomes or for a less term than life, whether they be persons deriving their incomes from land, or as officers in the army or navy, or clergymen, or clerks in public offices. That was the principle of distinction, and they ought not to make it in one case without making it in others. The hon. and learned Gentleman stated, in answer to that argument, that it was not a worthy answer,—that if they could not do perfect justice, it was no reason why they should do complete injustice. It appeared to him, that if they adopted this proposition, they would not only not do perfect justice, but would be doing more injustice than they could remedy. There were so many classes of life incomes for which they did not propose any alleviation, that they would have a just right to complain, and any one who brought forward a case of that kind might claim from those who supported this proposition, that they should be granted an equal alleviation to the amount of half the income as was proposed by the hon. Member for Bath. Well then, if that were the principle, he thought the hon. Gentleman was bound, not only to propose this particular proposition, but to bring forward a whole scheme for carrying into effect the principles of which he was the advocate. He did not say that it was impracticable to make a distinction between durable and terminable incomes, but hearing neither from the Government, nor from the hon. and learned Gentleman any mode by which the tax could be generally imposed more equitably, he could not vote for this particular and special amendment. He had heard another answer to the amendment—namely, this distinction, that it might be said, persons generally deriving incomes from lands or funds had permanent incomes, and those deriving incomes from trades or professions only temporary incomes. But, take the case of an individual who had 500l. a—a-year, whether from land or funds, and for life, with near relations dependent upon him, but whose fortune went to some distant relative, or to a person with whom he had no intimate connection. If that person saw some rich banker or professional man with an income of 5,000l. or 10,000l. a—year which was charged only 3½d. in the pound, while he was paying 7d., what answer would it be to him to say, "True, your income is only for life, but you belong to a wealthy class, whose incomes generally are permanent, and because you belong to that class, because with them you are included in schedule A, you shall be taxed 7d. in the pound, although other persons who have a considerable advantage over you shall be charged only 3½d." They must take into their consideration what had been done in this respect on the imposition of the tax at former periods. It was not now a question of emergency. The House had decided, so far as the second reading could decide, that the emergency existed, and the tax should be imposed. Now, what was the manner in which this tax had been imposed by Mr. Pitt when Mr. Fox was in opposition, afterwards by Mr. Addington, and subsequently by Lord Grenville and Lord Lansdowne, when Mr. Canning and Lord Castlereagh were in opposition? At all those times the Income-tax was debated, and persons proposed, as in the present case, a different rate of duty for trades and professions. But, at no time, did he find that these statesmen, the chief authorities on the subject, nor any other person who took the lead in the debates in Parliament upon it, ever advocated the principle that a certain class should be taxed only half the amount of other classes. He could not, therefore, but come to the conclusion, that being unable to remedy other inconveniences, he would not vote for a doubtful remedy in this particular instance. At the same time, he repeated, he did not say it was impossible there could be a tax on property and income more just than the present bill, which would by great nicety of application, by extreme labour of calculation, apply to different incomes a rule more proportioned to the justice of each case. All he could say was, that he had seen no such scheme. No such scheme was before them, and, therefore, for the present he should not assume that one could be proposed. There was, however, one case of exception which might require examination. He believed, that when Mr. Pitt was pressed upon the subject, he did make some allowance of the nature sought for by the hon. Member for Dumfries (Mr. Ewart) for sums applied by individuals for the purpose of insuring their own lives. He did not know actually what that allowance was, but he thought, that some provision of that kind might be introduced into the bill. With these opinions, he could not vote for the proposition of the hon. and learned Gentleman (Mr. Roebuck). He did not take this course from any notion that it would make the tax more unpopular to levy the same amount on all classes, for he believed if they took off a portion in this case and refused to do it in others in which it was demanded with the same equity, they would render the tax more unpopular than by imposing it on all alike, as proposed by the bill. Therefore, the House having resolved to go into committee, he should vote on this point with the right hon. Gentleman at the head of the Government.

Mr. Mitchell

was strongly in favour of an Income tax, but he thought the present clause, as it stood, was unjust, and he, therefore, urged its amendment, that it might not render it unpopular hereafter. He could understand the conduct of the noble Lord (Lord J. Russell) who, no doubt, was not desirous to remove from the bill anything that would render it unpopular, but, as he believed it to be a just tax, and one much better than any tax on articles of consumption, he was anxious to remove all its imperfections, and he, therefore, trusted that this part of it would be reconsidered.

Mr. Roebuck

The noble Lord near him said he would not vote with him because he had not proposed an elaborate and comprehensive scheme, but he did not perceive that he was at all bound to do any such thing. All that he wished to do was to remedy what seemed to him to be a gross injustice. What was the pith of the argument with which the right hon. Baronet had met his motion? It was that the bill contained not one, but many injustices; and that it was idle to attempt to redress this particular one. The right hon. Baronet pointed to an injustice in schedule A, to which he said there was no opposition, to another in schedule B, and another in schedule C, which he said were not opposed. In fact the injustice in schedule C was opposed and very ably too; but if it had been otherwise, what was the worth of such an argument as this? Because all injustices could not be removed, was that a reason for adhering to a gross and palpable injustice which could be got rid of? Suppose the case that it was attempted to reform the criminal code, and that a general proposition for the purpose had failed or had no chance of success, was that a reason for not bringing forward a particular case—that of forgery, for example, in which there was ground for believing that an improvement ought to be effected? Should they refuse to take away an improper punishment from the crime of forgery, unless the proposal embraced also the removal of every improper punishment in the statute book. The Chancellor of the Exchequer made a speech, which was certainly not a reply to him (Mr. Roebuck). It appeared as if the right hon. Gentleman wanted to make a speech on the property-tax, and he made it. The right hon. Gentleman dwelt on the injustice of making a difference in favour of bankers, whose funds were of so permanent a character; but the property of bankers, which was not actually employed in their business, was invested in the funds or in land; and such property would pay the full amount of the tax. So, if a professional man was able to lay by a portion of his income, he invested it, most likely, in the funds, and the next year it would become liable to the full tax. The moment the receiver of professional income became saving, he would be taxed as heavily as others. None of these considerations weighed against his amendment. The real question was, had he shown an injustice, and a practicable way of removing it? The injustice was admitted, and the whole argument against his plan was, that" the bill is so bad, we dare not attempt to remedy one mischief, lest we should be called upon to remedy a dozen." In speaking of the right hon. Baronet's responsibility, he never meant to frighten him. But his position was one of eminent responsibility, and every one who aspired to such a position did so well knowing that great responsibility would press upon his head. The right hon. Baronet was the framer of this measure—the creator of the whole system. He governed his party —in fact, he was the party; and therefore it had been his (Mr. Roebuck's) wish to make the right hon. Gentleman responsible.

The committee divided on the question, that the blank be filled with "threepence halfpenny." — Ayes 112; Noes 258:—Majority 146.

List of the AYES.
Aldam, W.	Hastie, A.
Bannerman, A.	Hatton, Capt. V.
Barclay, D.	Hawes, B.
Bernal, R.	Hay, Sir A. L.
Bernal, Capt.	Heathcote, J.
Blake, M. J,	Heneage, E.
Blake, Sir V.	Hill, Lord)M.
Blewitt, R. J.	Howick, Visct.
Bowring, Dr.	Hume, J.
Brodie, W. B.	Humphery, Mr. Ald.
Brotherton, J.	Hutt, W.
Bryan, G.	James, W.
Bulkeley, Sir R. B. W.	Jervis, J.
Buller, C.	Johnston, A.
Busfield, W.	Langston. J. H.
Byng, rt. hon. G. S.	Marjoribanks, S.
Chapman, B.	Marshall, W.
Christie, W. D.	Martin, J.
Cobden, R.	Milnes, R. M.
Colbrooke, Sir T. E.	Mitcalfe, H.
Collins, W.	Mitchell, T. A,
Crawford, W. S.	Morris, D.
Dalmeny, Lord	Morrison, J.
Duke, Sir J.	Mostyn, hn. E. M. L.
Duncan, Visct.	Muntz, G. F.
Duncan, G.	Murphy, F. S.
Ebrington, Visct.	Napier, Sir C.
Ellice, rt. hn. E.	O'Brien, J.
Ellis, W.	O'Brien, W. S.
Evans, W.	O'Connell, J.
Ferguson, Col.	Paget, Lord A.
Forster, M.	Palmer, R.
Gibson, T. M.	Pechell, Capt.
Gill, T.	Phillips, G. R.
Gordon, Lord F.	Philips, M.
Granger, T. C.	Plumridge, Capt.
Guest, Sir J.	Ponsonby, hon. J. G.
Hall, Sir B.	Power, J.

Pulsford, R.	Tufnell, H.
Redington, T. N.	Turner, E.
Rice, E. R.	Villiers, hon. C.
Rumbold, C. E.	Vivian, J. E.
Rundle, J.	Vivian, hon. Capt.
Scholefield, J.	Wakley, T.
Scrope, G. P.	Walker, R.
Smith, B.	Wallace, R.
Smith, rt. hn. R. V.	Ward, H. G.
Stansfield, W. R. C.	Watson, W. H.
Stanton, W. H.	Wawn, J. T.
Staunton, Sir G. T.	Williams, W.
Stuart, Lord J.	Wilshere, W.
Strickland, Sir G.	Wood, B.
Strutt, E.	Wood, G. W.
Tancred, H. W.	Yorke, H. R.
Thornely, T.
Tollemache, hn. F. J.	TELLERS.
Towneley, J.	Leader, J. T.
Trollope, Sir J.	Roebuck, J. A.

List of the NOES.
A'Court, Capt.	Campbell, A.
Acton, Col.	Cardwell, E.
Adare, Visct.	Carnegie, hon. Capt.
Adderley, C. B.	Cavendish, hon. G. H.
Allix, J. P.	Chapman, A.
Antrobus, E.	Charteris, hon. F;
Arbuthnott, hon. H.	Chelsea, Visct.
Archdall, Capt.	Chetwode, Sir J.
Arkwright, G.	Cholmondeley, hn. H.
Ashley, Lord	Christmas, W.
Bailey, J.	Chute, W. L. W.
Bailey, J. jun.	Clayton. R. R.
Baillie, Col.	Clerk, Sir G.
Baillie, H, J.	Cochrane, A.
Baird, W.	Cockburn, rt. hn. Sir G.
Balfour, J. M.	Codrington, C. W.
Bankes, G.	Collett, W. R.
Baring, hon. W. B.	Colvile, C. R.
Barnard, E. G.	Conolly, Col.
Barneby, J.	Coote, Sir C. H.
Baskerville, T. B. M.	Corry, rt. hn. H.
Beckett, W.	Courtenay, Lord
Bell, M.	Cripps, W.
Beresford, Capt.	Curteis, H. B.
Beresford, Major	Damer, hon. Col.
Bernard, Visct.	Darby, G.
Blackburne, J.	Dawnay, hon. W. H.
Blakemore, R.	Denison, J. E.
Bodkin, W. H.	Denison, E. B.
Boldero, H. G.	Dickinson, F. H.
Borthwick, P.	Douglas, Sir C. E.
Botfield, B.	Douglas, J. D. S.
Bradshaw, J.	Douro, Marquess of
Bramston, T. W,	Drummond, H. H.
Broadley, H.	Dugdale, W. S.
Broad wood, H.	Duncombe, hon. A.
Brooke, Sir A. B.	Du Pre, C. G,
Bruce, Lord E.	East, J. B.
Bruen, Col.	Eaton, R. J.
Buckley, E.	Egerton, W. T.
Buller, E.	Egerton, Sir P.
Buller, Sir J. Y.	Eliot, Lord
Bunbury, T.	Emlyn, Visct.
Burrell, Sir C. M.	Escott, B.
Campbell, Sir H.	Estcourt, T. G. B.

Farnham, E. B.	Long, W.
Fellowes, E.	Lopes, Sir R.
Feilden, W.	Lowther, J. H.
Ferrand, W. B.	Lygon, hon. G,
Fitzroy, Capt.	Mackenzie, T.
Follett, Sir W. W.	Mackenzie, W. F.
Forbes, W.	Mackinnon, W. A.
Forester, hon. G. C. W.	M'Geachy, F. A,
Fuller, A. E.	Maher, V.
Gaskell, J. Milnes	Mahon, Visct.
Gladstone, rt. hn. W. E.	Mainwaring, T.
Godson, R.	Manners, Lord J.
Gordon, hon. Capt.	March, Earl of
Gore, M.	Marsham, Visct.
Gore, W. O.	Martyn, C. W.
Goring, C.	Marton, G.
Goulburn, rt. hn. H.	Master, T. W. C.
Graham, rt. hn. Sir J.	Masterman, J.
Greenal, P.	Meynell, Capt.
Gregory, W. H.	Miles, P. W. S.
Grimston, Visct.	Miles, W.
Grogan, E.	Mordaunt, Sir J.
Halford, H.	Morgan, O.
Hamilton, C. J. B.	Mundy, E. M.
Hamilton, J.	Murray, C. R, S.
Hamilton, W. J.	Murray, A.
Hamilton, Lord C.	Neeld, J.
Hampden, R.	Neeld, J.
Hanmer, Sir J.	Neville, R.
Harcourt, G. G.	Newport, Visct.
Hardinge, rt. hn. Sir H.	Newry, Visct.
Hardy, J.	Nicholl, rt. hn. J.
Hayes, Sir E.	Norreys, Lord
Henley, J. W.	Norreys, Sir D. J.
Hepburn, Sir T. B.	O'Brien, A. S.
Herbert, hon. S.	Packe, C. W.
Hillsborough, Earl of	Paget, Lord W.
Hodgson, R.	Palmer. R.
Hogg, J. W.	Patten, J, W.
Holmes, hn. W. A'Ct	Peel, rt. hn. Sir R.
Hope, hon. C.	Peel, J,
Howard, hn. C. W. G.	Planta, rt. hn. J.
Howard, P. H.	Plumptre, J. P;
Inglis, Sir R. H.	Polhill, F.
Irton, S.	Pollington, Visct.
Jackson, J. D.	Pollock, Sir F.
James, Sir W C.	Praed, W. T.
Jermyn, Earl	Pringle, A.
Jocelyn, Visct.	Pusey, P.
Johnson, W. G.	Rashleigh, W.
Johnstone, Sir J.	Reade, W. M.
Johnstone, H.	Reid, Sir J. R.
Jones, Capt.	Richards, R.
Kemble, H.	Rolleston, Col.
Kerrison, Sir E.	Rose, rt. hn. Sir G.
Kirk, P.	Round, J.
Knatchbull, right. hon.	Rushbrooke, Col.
Sir E.	Russell, Lord J.
Knight, H. G.	Russell, C.
Knight, F. W.	Russell, J. D. W.
Labouchere, rt. hn. H.	Ryder, hon. G. D,
Lascelles, hon. W, S.	Sanderson, R.
Lawson, A.	Sandon, Visct.
Legh, G. C.	Scarlett, hon. R. C.
Leicester, Earl of	Scott, hon. F.
Lemon, Sir C.	Shaw, rt. hn. F.
Liddell, hon. H. T.	Sheppard, T.

Shirley, E. J.	Vere, Sir C. B.
Sibthorp, Col.	Verner, Col.
Smith, A.	Vernon, G. H.
Smollett, A.	Vivian, hon. Major
Somerset, Lord G.	Waddington, H. S.
Sotheron, T. H. S.	Wall, C. B.
Stanley, Lord	Walsh, Sir J. B.
Stanley, E.	Welby, G. E.
Stewart, J.	Wemyss, Capt.
Stuart, H.	Wodehouse, E.
Sutton, hon. H. M.	Wood, Col. T.
Tennent, J. E.	Wortley, hon. J. S.
Thesiger, F.	Wyndham, Col. C.
Tollemache, J.	Yorke, hon. E. T.
Trench, Sir F. W.	Young, J.
Trevor, hon. G. R.	Young, Sir W.
Trotter, J.	TELLERS.
Turnor, C.	Baring, H. B.
Tyrell, Sir J. T.	Fremantle, Sir T. F.

Mr. S. Crawford

said, that having already stated the reasons for the amendment which he had to propose, he should not again trouble the House with a recapitulation of the arguments, but content himself with moving that the words, Or from any profession, trade, employment, or vocation, whether the same shall be respectively carried on in Great Britain or elsewhere, be omitted in Schedule D.

The committee divided on the "question that the paragraph And upon the annual profits or gains arising or accruing to any person residing in Great Britain from any profession, trade, employment or vocation, whether the same shall be respectively carried on in Great Britain or elsewhere, there shall be charged yearly for every twenty shillings of the amount of such profits or gains the sum of sevenpence, stand part of schedule D.—Ayes 259; Noes 50: Majority 209.

List of the AYES.
Acland, Sir T. D.	Baskerville, T. B. M.
Acland, T. D.	Beckett, W.
A'Court, Capt.	Bell, M.
Acton, Col.	Bentinck, Lord G.
Adderley, C. B.	Beresford, Capt.
Allix, J. P.	Bernard, Visct.
Antrobus, E.	Blackburne J. I.
Arbuthnott, hon. H.	Blake, M. J.
Archdall, Capt.	Bodkin, W. H.
Arkwright, G.	Boldero, H. G.
Bailey, J.	Borthwick, P.
Bailey, J., jun.	Botfield, B.
Baillie, Col.	Bradshaw, J.
Baillie, H. J.	Bramston, T. W.
Baird, W.	Broadley, H.
Baldwin, B.	Broadwood, H.
Bankes, G.	Brooke, Sir A. B.
Baring, hon. W. B.	Bruce, Lord E.
Barneby, J.	Bruen, Col.

Buckley, E.	Granby, Marquess of
Buller, Sir J. Y.	Greenall, P.
Bunbury, T.	Gregory, W. H.
Burrell, Sir C. M.	Grimston, Visct.
Campbell, Sir H.	Grogan, E.
Campbell, A.	Halford, H.
Cardwell, E.	Hamilton, C, J. B.
Carnegie, hon. Capt.	Hamilton, J.
Cavendish, hon. G. H.	Hamilton, W. J.
Charteris, hon. F.	Hamilton, Lord C.
Chelsea, Visct.	Hampden, R.
Chetwode, Sir J.	Hanmer, Sir J.
Chute, W. L. W.	Harcourt, G. G.
Clayton, R. R.	Hardinge, rt. hn. Sir H.
Clerk, Sir G.	Hatton, Capt. V.
Cochrane, A.	Hayes, Sir E.
Cockburn, rt. hn. Sir G.	Henley, J. W.
Codrington, C. W.	Hepburn, Sir T. B.
Collett, W. R.	Herbert, hon. S.
Colvile, C. R.	Hodgson, R.
Conolly, Col.	Hogg, J. W.
Corry, rt. hon. H.	Houldsworth, T.
Courtenay, Lord	Holmes, hon. W. A'Ct.
Cripps, W.	Hope, hon. C.
Curteis, H. B.	Howard, hon. C. W. G.
Dalrymple, Capt.	Howard, P. H.
Damer, hon. Col.	Inglis, Sir R. H.
Darby, G.	Irton, S.
Dawnay, hon. W. H.	Jackson, J. D.
Denison, E. B.	James, Sir W. C.
Dickinson, F. H.	Jermyn, Earl
D'Israeli, B.	Jocelyn, Visct.
Douglas, Sir C. E.	Johnson, W. G.
Douglas, J. D. S.	Johnstone, Sir J.
Drummond, H. H.	Johnstone, H.
Dugdale, W. S.	Jones, Capt.
Duke, Sir J.	Kelburne, Visct.
Duncombe, hon. A.	Kemble, H.
Du Pre, C. G.	Kerrison, Sir E.
East, J. B.	Kirk, P.
Eaton, R. J.	Knatchbull, rt. hon.
Ebrington, Visct.	Sir E.
Egerton, W. T.	Knight, H. G.
Egerton, Sir P.	Lascelles. hon. W. S.
Eliot, Lord	Lawson, A.
Emlyn, Visct.	Lefroy, A.
Escott, B.	Legh, G. C.
Estcourt, T. G. B.	Leicester, Earl of
Fellowes, E.	Lincoln, Earl of,
Ferguson, Sir R. A.	Lopes, Sir R.
Feilden. W.	Lowther, J. H.
Ferrand, W. B.	Lowther, hon. Col.
Fitzroy, Capt.	Lyall, G.
Fleming, J. W.	Lygon, hon. General
Follett, Sir W. W.	Mackenzie, T.
Forbes, W.	Mackenzie, W. F.
Forester, hon. G. C. W.	M'Geachy, F. A.
Fuller, A. E.	Maher, V.
Gaskell, J. Milnes	Mahon, Visct.
Gibson, T. M.	Mainwaring, T.
Gladstone, rt. hn. W. E,	Manners, Lord J.
Gordon, hn. Capt.	March, Earl of
Gore, M.	Marsham, Visct.
Gore, W. O.	Martin, C. W.
Goring, C.	Master, T. W. C.
Goulburn, rt. hon. H.	Masterman, J
Graham, rt. hn. Sir J.	Meynell, Capt.

Miles, P. W. S.	Ryder, hon. G. D.
Miles, W.	Sandon, Visct.
Milnes, R. M.	Scarlett, hon. R. C.
Mitchell, T. A.	Scott, hon. F.
Mordaunt, Sir J.	Shaw, rt. hon. F.
Morgan, O.	Sheppard, T.
Mundy, E. M.	Shirley, E. J.
Muntz, G. F.	Sibthorp, Col.
Murray, C. R. S.	Smollett, A.
Murray, A.	Somerset, Lord G.
Neeld, J.	Stanley, Lord
Neeld, J.	Stanley, E.
Neville, R.	Stewart, J.
Newport, Visct.	Stuart, Lord J.
Newry, Visct.	Stuart, H.
Nicholl, rt. hon. J.	Sutton, hon. H M.
Norreys, Lord	Tennent, J. E.
Norreys, Sir D. J.	Thesiger, F.
O'Brien, A. S.	Tollemache. hon. F. J.
Packe, C. W.	Tollemache, J.
Paget, Lord W.	Trench, Sir F. W.
Paget, Lord A.	Trevor, hon. G. R.
Palmer, R.	Trotter, J.
Patten, J. W.	Turnor, C.
Peel, rt. hon. Sir R.	Tyrell, Sir J. T.
Peel, J.	Vere, Sir C. B.
Pemberton, T.	Verner, Col.
Planta, rt. hon. J.	Vivian, hon. Major
Plumptre, J. P.	Vivian, J. E.
Polhill, F.	Waddington, H. S.
Pollington, Visct.	Walsh, Sir J. B.
Pollock, Sir F.	Welby, G. E.
Ponsonby, hon. J. G.	Wemyss, Capt.
Praed, W. T.	Wodehouse, E.
Pringle, A.	Wood, Col. T.
Pulsford, R.	Worsley, Lord
Pusey, P.	Wortley, hn. J. S.
Rashleigh, W.	Wyndham, Col. C.
Reade, W. M.	Yorke, hon. E.T.
Reid, Sir J. R.	Yorke, H. R.
Richards, R,	Young, J.
Rolleston, Col.	Young, Sir W.
Rose rt. hon. Sir G.	TELLERS.
Round, J.	Baring, H.
Rushbrooke, Col.	Fremantle, Sir T.
List of the NOES.
Blewitt, R.J.	Hutt,W.
Bowring, Dr.	Johnston, A.
Brodie, W. B.	Langston, J. H.
Brotherton, J.	Leader, J. T.
Bryan, G.	Martin, J.
Busfeild, W.	Mitcalfe, H.
Christie, W. D.	Morris, D.
Cobden, R.	Mostyn, hon. E. M. L.
Collins, W.	Murphy, F. S.
Duncan, G.	Napier, Sir C.
Ellis, W.	O'Brien, J.
Evans, W.	Pechell, Capt.
Fielden, J.	Plumridge, Capt.
Forster, M.	Power, J.
Gill, T.	Redington, T. N.
Granger, T. C.	Rundle, J.
Hall, Sir B.	Scholefield, J.
Heathcoat, J.	Seale, Sir J. H.
Hill, Lord M.	Somerville, Sir W. M.
Hume, J.	Stansfield, W. R. C.

Tancred, H. W,	Wawn, J. T.
Thornely, T.	Williams, W.
Turner, E.	Wood, B.
Villiers, hon. C.
Wakley, T.	TELLERS,
Walker, R.	Crawford, W. S.
Watson, W. H.	Wallace, R.

Schedule D agreed to.

Schedule E

Upon every public office or employment of profit, and upon every annuity, pension, or stipend payable by her Majesty, or out of the public revenue of the United Kingdom, except annuities before charged to the duties in schedule C, for every twenty shillings of the annual amount thereof respectively there shall be charged yearly the sum of.

Sir C. Napier

rose to move the amendment of which he had given notice: the object of which was to exempt officers in the army and navy from the payment of the property—tax. He did not wish to extend the exemption to officers holding high rank in either service; but it was impossible that men receiving 165l., 180l. to 250l. or 260l. a—year should, after paying insurance, be in a condition to pay this tax. Besides this, it was hard to call on men who had served their country so long to make such a contribution. The gallant Officer concluded by moving to insert the words And except the pay—officers under the rank of general and flag officers, whose incomes are derived solely from their services, and not receiving pensions either for wounds or good service, and are not paid as Queen's aides—decamp which shall be exempted.

Captain Carnegie

differed in opinion from the hon. and gallant Commodore, inasmuch as he thought it would be but cold—blooded reasoning and pocket policy to have an imposition of this nature levied upon the country generally, and to exempt the officers of the navy from contributing their fair proportion. It should be recollected that the proceeds of this tax was to support the maintenance of the army and navy; and when all other classes of her Majesty's subjects were to be taxed, were the navy alone to be deprived of lending their exertions to the general good? As far as he knew the feelings among the officers of the navy, he would say, that they would be inclined more to consider the proposition of the hon. and gallant Commodore in the light of an insult than otherwise; and he could not help thinking that the hon. and gallant Commodore was consulting more the wishes of his constituents in Marylebone, than the respectability and independence of the officers of the navy.

Lord Worsley

thought, that the amendment deserved to be successful. It was surprising to see how many officers in the army and navy managed, upon their extremely limited incomes, to bring up their families ss in many cases they did; and the difficulty of the task would be much increased were they called on to pay additional taxation in the manner proposed. He thought that the hon. and gallant Commodore deserved the thanks of both branches of the service for the motion which he had brought forward.

Captain Pechell

remarked, that the hon. and gallant Gentleman opposite (Captain Carnegie) had talked of the navy and army being in favour of the proposed Income-tax. Although he admitted that this was partly the case, yet there was a large body of either service who, while they deeply sympathised with the distresses of the country, yet were in a situation which entitled them to ask for relief from the House from the burden proposed to be laid upon them. It appeared, however, that it sometimes happened, that when naval officers got into the House, they seemed to throw overboard all regard for their brother officers, and implicitly followed the leader of their party. He was astonished when he heard the gallant and hon. Gentleman come forward to say, that naval officers would be ashamed to exclaim against the tax. Before that tax should be imposed, it ought first to be proved, that there were no other means of supplying the deficiency of the Exchequer than by putting the hands of Government into the pockets of all classes, by an inquisitorial and abominable impost; but if the necessity for that tax should be demonstrated, then neither the army nor the navy would oppose its imposition.

Captain Plumridge

was old enough to recollect the time when the army and navy were able to pay 10 per cent, on their income to carry on a war, but he was equally convinced that they would find it much more difficult to pay 3 per cent. now in a time of peace.

Sir R. Peel

Sir, no person can have a higher respect for the army and navy than I have, nor can any one entertain a deeper sense of gratitude for the services which they have performed towards this country, nor have a stronger confidence that when called upon, upon future occasions they will emulate the fame which they have already gained on all past occasions. No one can more deeply regret the necessity of the imposition of this tax; but, inasmuch as there is to be a tax of this description to be generally imposed upon all incomes above 150l. a-year, I do not think it would be just to take a particular class and exempt them from the operation of it. 1 must say, that the gallant Officer behind me (Captain Carnegie) has given the proposition a support worthy of his profession —and I cannot help thinking that the officers of the army and navy would not wish to be exempted from the operation of a tax which all other classes must suffer under. I think, then, that my gallant Friend has correctly stated the feelings of the officers of his service upon this subject. The question is not now what the hon. and gallant Officer the Member for Brighton has stated, as to whether or not a sufficient emergency has arisen, to warrant the imposition of this tax. The House being in committee now upon the subject, we must assume that that emergency has arisen, and that the imposition must be applied. Assuming that to be the fact, I do not think a particular class ought to be exempted from the operation of the Income-tax.

Sir C. Napier

said, he did not think that the arguments used by the hon. and gallant Officer opposite (Capt. Carnegie) were of much importance. He had communicated upon this subject with a great many naval officers who were in poverty and want, and upon whom such a tax as this would be a most severe oppression. All he could say now was, in answer to the hon. and gallant Captain opposite, he wished that that gallant Officer was a married man with a wife and a family of six children, and with only 155l. a-year salary, and he was certain that his opinions would be very different as to this tax than what he had just stated. The hon. and gallant Captain (Capt. Carnegie) had stated that he was only quoting the opinions of his constituents in Marylebone. He did not know exactly how many gallant Officers were living in the parish of Marylebone, but he could safely say, that very few of them voted for him. Those gallant Officers who were living in Marylebone were notoriously known to be Tories.

Lord Ingestre

said, he believed that if the officers of the navy were polled upon, this question, the great majority would be found to be placed in opposition to the hon. and gallant Commodore's proposition. This was a distinction which would not be acquiesced in by the navy generally, and for that reason he should oppose the amendment of the hon. and gallant Commodore.

The committee divided on the question, that the words be added: — Ayes 32; Noes 205:—Majority 173.

List of theAYES.
Bernal, Capt.	Pulsford, R.
Blewitt, R. J.	Redington, T. N.
Bryan, G.	Rundle, J.
Bulkeley, Sir R.B. W.	Scholefield, J.
Cavendish, hn. C. C.	Seale, Sir J. H.
Christie, W. D.	Somerville, Sir W. M.
Cowper, hon. W. F.	Stansfield, W. R. C
Duncombe, T.	Stuart, Lord J.
Dundas, Admiral	Turner, E.
Dundas, F.	Wakley, T.
Granger, T. C.	Wallace, R.
Hall, Sir B.	Watson, W. H.
Hollond, R.	Wood, B.
Martin, J.	Worsley, Lord
Morris, D.
Murphy, F. S.	TELLERS.
Murray, A.	Napier, Sir C.
Pechell, Capt.	Plumridge, Capt.

List of the NOES.
Acland, Sir T. D.	Broadwood, H.
Acland, T. D.	Brooke, Sir A. B.
Acton, Col.	Brotherton, J.
Adderley, C. B.	Bruce, Lord E.
Aldam, W.	Buckley, E.
Allix, J. P.	Buller, Sir J. Y.
Antrobus, E.	Bunbury, T.
Arkwright, G.	Burrell, Sir C. M.
Attwood, M.	Campbell, Sir H.
Bailey, J.	Cardwell, E.
Bailey, J., jun.	Carnegie, hn. Capt.
Baillie, Col.	Chelsea, Visct.
Baird, W.	Chetwode, Sir J.
Baldwin, B.	Chute, W. L. W.
Bankes, G.	Clayton, R. R.
Baring, hon. W. B.	Clerk, Sir G.
Barneby, J.	Cochrane, A.
Baskerville, T. B. M.	Cockburn, rt. hn. Sir G.
Beckett, W.	Collett, W. R.
Bentinck, Lord G.	Colvile, C. R.
Beresford, Capt.	Conolly, Col,
Bernard, Visct.	Corry, rt. hn. H.
Blackburne, J. I.	Courtenay, Lord
Blake, M.J.	Cripps. W.
Bodkin, W. H.	Curteis, H. B.
Boldero, H. G.	Damer, hon. Col.
Borthwick, P.	Darby G.
Botfield, B.	Dawnay, hn. W. H.
Bowring, Dr.	Denison, E. B.
Bradshaw, J.	Dickinson, F. H.
Bramston, T. W.	Douglas, Sir C. E.
Broadley, H.	Douglas, J. D. S.

Drummond, H. H.	Lyall, G.
Duncombe, hon. A.	Mackenzie, T.
East, J. B.	Mackenzie, W. F.
Egerton, W. T.	MacGeachy, F. A.
Egerton, Sir P.	Mahon, Visct.
Eliot, Lord	Mainwaring, T.
Escott, B.	Manners, Lord J.
Estcourt, T. G. B.	March, Earl of
Evans, W.	Marsham, Visct.
Fellowes, E.	Martin, C. W.
Fielden, W.	Masterman, J.
Ferrand, W. B.	Meynell, Capt.
Fitzroy, Capt.	Miles, P. W. S.
Fleming, J. W.	Miles, W.
Follett, Sir W. W.	Milnes, R. M.
Forbes, W.	Mitchell, T. A.
Forester, hn. G. C. W.	Mordaunt, Sir J.
Fuller, A. E.	Morgan, O.
Gaskell, J. Milnes	Mundy, E. M.
Gibson, T. M.	Muntz, G. F.
Gill, T.	Murray, C. R. S.
Gladstone,rt. hn.W.E.	Neeld, J.
Gordon, hon. Capt.	Neeld, J.
Gore, M.	Newport, Visct.
Gore, W. O.	Newry, Visct.
Gore, W. R. O.	Nicholl, rt. hon. J.
Goulburn, rt. hon. H.	Norreys, Sir D. J.
Graham, rt. hn. Sir J.	O'Brien, A. S.
Granby, Marquess of	Packe, C. W.
Greenall, P.	Paget, Lord W.
Grimston, Visct.	Patten, J. W.
Grogan, E.	Peel, rt. hn. Sir R.
Hamilton, J.	Philips, M.
Hamilton, W. J.	Plumptre, J. P.
Hamilton, Lord C.	Pollock, Sir F
Harcourt, G. G.	Praed, W.T
Hardinge, rt.hn.Sir H.	pringle, A.
Henley, J. W.	Pusey, P.
Hepburn, Sir T. B.	Rashleigh, W.
Herbert, hon. S.	Reade, W. M.
Hodgson, R.	Richards, R.
Houldsworth, T.	Rolleston, Col.
Howard, hn.E. G. G.	Rose, rt. hn. Sir G
Howard, P. H.	Round, J.
Hume, J.	Rushbrooke, Col.
Hutt, W.	Sanderson, R.
Ingestrie, Visct.	Sandon, Visct.
Irton, S.	Scarlett, hn. R. C.
Jackson, J. D.	Scott, hon. F.
Jermyn, Earl	Show, right hon. F.
Jocelyn, Visct.	Sheppard,T.
Johnson, W. G.	Shirley, E. J.
Johnstone, Sir J.	Smollett, A.
Johnstone, H.	Somerset, Lord G.
Jones, Capt.	Stanley, Lord
Kemble, H.	Stanley, E.
Kerrison, Sir E.	Stewart. J.
Kirk, P.	Stuart, J.
Knatchbull, right hon.	Sutton, hon. H. M.
Sir E.	Tennent, J. E.
Lefroy, A.	Thesiger, F.
Leicester, Earl of	Tollemache, hn. F. J.
Lincoln, Earl of	Tollemache, J.
Lindsay, H. H.	Trench, Sir F. W.
Lockhart, W.	Trevor, hon. G. R.
Lowther, J. H.	Trotter, J.
Lowther, hon. Col.	Tyrell, Sir J. T.

Vere, Sir C. B.	Yotke, hn. E. T.
Vivian, J. E.	Yorke, H. R.
Waddington, H. S.	Young, J.
Wood, Col. T.	TELLERS.
Wortley, hon. J. S.	Baring, H.
Wyndham, Col. C.	Fremantle, Sir T.

Schedule agreed to.

House resumed. — Committee to sit again.