§ MR. HUBBARDsaid, he rose to call the attention of the House, in connection with the income tax, to the action taken by Government on the "Two Million Fortification Loan Act of 1860;" also to the effect of the income tax on the rents of encumbered landed property, and to move for certain Returns. About two years previously the noble Lord at the head of the Government proposed to raise, for the purpose of erecting fortifications, a loan of £10,000,000 or £12,000,000 through the medium of terminable annuities. He (Mr. Hubbard) then took the liberty of submitting that no more wasteful course could be adopted than to raise money for such a purpose in such a manner, and proposed an Amendment in order to prevent the adoption of that course. The Government, however, persevered, and he was defeated. From papers which had recently been distributed he found that during the year 1861 £970,000 had been brought into the Exchequer by the sale of terminable annuities. Those annuities had not been placed in the open market, but had been taken by the Government to the account of the savings banks; and, to provide the purchase-money, they had sold Three per Cent stocks belonging to the savings banks. The terms, however, on which the annuities were placed were not stated in any paper which he could find on the table of the House; and although he found papers in which the prices were affixed to other kinds of stocks, there was no price attached to these annuities. If, however, the Government persevered in thus contracting loans in a way which was ignored by the capitalists and moneyed 679 corporations of the day, the loss would be multiplied just in proportion as the loans were multiplied. To obtain the means of purchasing the Terminable Annuities for the savings banks, the Commissioners for the Reduction of the National Debt sold Consols and other funds privately; but when they carried these sums of stock into the market, they were selling on behalf of the Chancellor of the Exchequer (or, in plain terms, the Chancellor of the Exchequer was selling on his own account) with an amount of knowledge which was not possessed by the individual who bought. It might be said that that course of proceeding was for the benefit of the Government, and therefore of the country; but he submitted that it was not consistent with fair dealing that the Government should send their agents into the market to sell with a knowledge which those who bought did not possess, because, had it been known that the Government broker was selling to provide money for the Fortifications, there would have been a pressure on the stocks, and the same price would not have been got which was obtained under different circumstances. There was a degree of straightforwardness in all money dealings between individuals in this country which ought not to be departed from; and he submitted that the course of proceeding by the Government in this matter not only involved the Government, through the savings banks, in the risk of serious loss, but was open to objection on the ground that it was not fair to substitute a stealthy sale of Three per Cent stocks for the sale of Terminable Annuities, in accordance with the Fortifications Act.
He would next, in pursuance of his notice, call the attention of the House to the action of the income tax upon the landed interest. It would be in the recollection of the House that on the 14th of May he made a Motion upon the subject, when his right hon. Friend the Chancellor of the Exchequer, in reply, asked hon. Members not to be led away by plausible appeals, but to attend, above all things, to the interest of justice; impressed it upon the House that he spoke from the actual calculations of the Board of Inland Revenue, and did not rest upon an imaginative estimate of the magical results which would follow an improved morality; and declared, that although he was reputed to be an enemy of the landed interest, he would not do them so great an injury as would result, especially to owners of en- 680 cumbered property, from the adoption of his (Mr. Hubbard's) proposal; adding, that as at present (owing to the payment of interest on mortgages and settlements, all of which were paid in full), when the income tax was at 9d. in the pound the landowner really paid 11½d., and that this 11½d. would under Mr. Hubbard's scheme be raised to 13½d., "and that (concluded his right hon. Friend, in his passionate appeal to the landed interest) was the scheme proposed to them in the name of justice and fair play." To that formidable impeachment of his right hon. Friend, grounded (as it was assumed to be) on official facts and computations, he was able at the moment to oppose nothing but a simple disclaimer, which naturally would prevail as little against the statements of his right hon. Friend as the protestation of a criminal against the sentence of the judge. His right hon. Friend spoke in that House with no common authority, and therefore with no common responsibility. He could not, like other men, cast his words on the air to let them die away after they had served their momentary purpose; the words he uttered became a part of the history of the country. They were heard with attention in that House, and read all over the world; and wherever they were read they were received with deference and respect. Why did his right hon. Friend enjoy that wondrous prerogative? It was not because he stood in that House as a Minister of the Crown—it was not even because he had a command of language, perfect in diction, earnest, and of unrivalled eloquence; but it was, above all, because he was believed to speak with careful and scrupulous veracity on all occasions. That was the secret of his strength; and therefore it was no light censure upon a scheme when his right hon. Friend denounced it as injurious to the State and to the interests of social order. He did not complain of the terms in which his right hon. Friend had conveyed his censure, so long as those terms were but the expression of his own opinion, but when he passed from the region of opinion to the region of facts and figures, the case assumed a different complexion, and one of much greater gravity, and he must be allowed to say that in the debate to which he referred his right hon. Friend was led into statements which were inaccurate, and therefore not applicable to the case which they were put forward to meet. The first proposition of the Chancellor of the Exche- 681 quer was that the adoption of his plan would cause an immediate loss of £2,600,000 to the revenue. The second, that on the residue of encumbered property, the tax would be raised from 11½d. to 1s. 1½d. in the pound. With regard to the first statement, as well as the second, he was about to move for Returns which in due time would enable the House to see how the facts really were. With that frankness which characterized him, the Chancellor of the Exchequer had intimated his intention of making no objection to those Returns. In the mean time he (Mr. Hubbard) ventured to surmise that the sum to be lost, if the abatements were uncompensated by a readjustment, would not be £2,600,000, but very little over £2,000,000. In the next place, he was very much mistaken if it would not be proved that the operation of his scheme, instead of raising the tax on the residue of encumbered property from 11½d. to 1s. 1½d., would actually reduce it to 10¼d. The effect of the scheme would be to remove one of the greatest defects in the present law. In fact, a grievance might be suffered by landed proprietors from the existing state of things of a far more serious character than that complained of in the case of traders, because in the case of the latter he did not think the grievance amounted to more than fifty per cent. That would be the amount if a trader was charged on £900 when he ought to pay on only £600; but in the case of a landed proprietor charged on the residue of encumbered property the excess might be as much as seventy or eighty per cent. Where he was beneficially possessed of only ten per cent of the net rental, he had to pay tax on twenty, because he had to pay on outgoings, which were nothing but a reinvestment of capital. In such a case the landowner was charged not at 9d., but at 1s. 6d. Under those circumstances the landed proprietors, instead of being parties to whom his scheme would be injurious, were parties who would largely profit by its adoption. He did not, however, appeal to landowners on any allegations of self-interest, nor did he feel that in bringing the subject under the notice of the House he was doing so in a private or personal character. Circumstances had induced him to look very carefully into the various Income Tax Acts, and the information he had acquired had led him to advocate the cause of those whom he 682 found to be aggrieved, with earnestness, but he trusted not with unbecoming warmth. He desired to effect a readjustment of the income tax, because he felt that its present operation was most detrimental to the morals of a very large number of the industrious classes of Great Britain. He trusted, therefore, that the House would not think it unbecoming in him to endeavour to vindicate his scheme from impeachments which he knew were baseless, and to show that it would not be attended with those injurious consequences which his right hon. Friend had imagined.
§
Motion made, and Question proposed,
That there be laid before this House, Returns showing, under various heads, (1.) The amounts of Income Tax charged for the year 1860–1; (2.) The annual values on which the Tax was charged; (3.) The abatements before assessment proposed by the Chairman of the Income Tax Committee in 1861; (4.) The values which would be chargeable after proposed abatements; (5.) The rate of Tax on the aggregate abated value which would produce the original amount of Tax; (6.) The amount of Tax which would be chargeable under each head at the increased rate of Tax; and (7.) The rate of Tax on original values which would be equivalent to the charge on the new assessments:
§ [See Table in next page.]
§ And, showing what would be the effect of the adjustment of the Income Tax proposed by the Chairman of the Income Tax Committee of 1861, in the increase or decrease of the rate of Tax thrown upon the portion of Land Rent remaining after discharging the annual burthens and outgoings, assuming that the burthens and outgoings are such as to raise the effective rate of Tax upon the net residue of rent from 9d. to 11½d in the pound."
§ MR. POLLARD-URQUHARTseconded the Motion.
§ THE CHANCELLOR OF THE EXCHEQUERsaid, that his hon. Friend was not quite correct in supposing that the Government would make any objection to his Motion as far as it was in their power to grant the Returns moved for. That part of the Motion which rested on what might be called matters of fact they would readily accede to; but as for the last paragraph, which rested on no matter of fact, but was pure hypothesis and argument, it was not in their power to prepare such a Return. His hon. Friend in an adroit manner had mixed up two subjects which were distinct, separate, and incongruous — namely, a scheme for the collection of the income tax, and an impeachment of the Government for the mode of raising money adopted by them in order to provide for the for-
§ TABLE (referred to in p. 682).
| Schedule. | 1. Amounts of Tax charged for the year 1860–1. | 2. Annual values on which the Tax was chargeable. | 3. Proposed Abatements. | 4. Values which would be chargeable after such Abatements. | 5. Rate of Tax on aggregate abated value which would pro duce the original amount of Tax. | 6. Amount of Tax chargeable at increased rate of Tax. | 7. Rate of Tax on original value equivalent to the charge on new Assessment. | |
| Lands, Fisheries, Tithes, Manors, &c | A | One-twelfth | ||||||
| Fines | A | All | ||||||
| Houses | A | One-sixth | ||||||
| Mines and Ironworks | A | 15 per cent | ||||||
| Quarries | A | 10 per cent | ||||||
| Gas, Railway, Canal, and other property | A | — | ||||||
| Public Dividends | C | — | ||||||
| Hereditary Pensions, Consolidated Fund | E | — | ||||||
| Farms | B | One-third | ||||||
| Trades and Professions | D | One-third | ||||||
| Offices—Salaries and Superannuations. | E | One-third |
§ tifications. He (the Chancellor of the Exchequer) did not think that business could be very conveniently conducted by the House if attempts were made to combine subjects between which even the ingenious mind of his hon. Friend had failed to show any natural relation beyond that they both related to figures, nor would he follow the example set by his hon. Friend. His hon. Friend complained, in the first place, that the Government had provided, or rather that the Legislature had ordered, that provision should be made for the expense of certain fortifications by means of annuities instead of by the more usual method of borrowing and creating a funded debt; and he also complained of the mode in which the money had been found in order to take up those annuities. As regarded the first point, if his hon. Friend objected to the proceeding of Parliament, he ought to make a Motion to alter the provisions of the Act. The Government had no choice but to obey, but yet they thought that the mode proposed by the Act was the wisest way of making the necessary provision. The hon. Member for Peterborough (Mr. Thomson Hankey), who was not then in his place, had on a former occasion shown conclusively that his hon. Friend opposite was entirely inaccurate in his statement that raising money by annuities was in all cases a wasteful method of borrowing. His hon. Friend complained that the Government had made sales in the open market, but had not made the buyers of stock acquainted with all the circumstances under which the stock was sold. Now, even assuming that the facts were so, he was not aware that it was the custom of those who sold stock to make known the whole of the circumstances which might have induced them to sell; but, however that might be, his hon. Friend was entirely mistaken as to the substratum of his argument. The sales in the open market, which he had so severely censured as contrary to prudence, and even morality, had not taken place. He did not say absolutely that since those annuities were first created there had been no sale in the open market; but if there had been, it was of an entirely trivial character and by way of exception. The money had been procured by Her Majesty's Government not by sales in the open market, but by way of transfer from their buying to their selling account. The principal of the accounts with which they had to do was that for creating life and permanent annuities. 685 Persons who came to the Government for the purpose of purchasing those annuities brought with them a certain amount of money, and that money it was the duty of the Government, as laid down by law, to lay out in stock. But instead of seeking that stock in the open market they had carried over that stock from the Post Office savings banks and general savings banks accounts, and the money so procured they had used as means for carrying on the fortifications. The Government, therefore, had done nothing whatever to disturb the course of monetary transactions as far as the purchase and sale of stock were concerned.
§ With regard to the income tax, his hon. Friend had said that statements which fell from the Chancellor of the Exchequer were accepted as important, because they were believed to be accurate. Now, he would not yield even to his hon. Friend in the desire that all statements which he might submit to the House should be strictly accurate; but there was always a broad distinction between figures which professed to be accurate and rested upon matters of fact, and figures which rested entirely upon calculation. When his hon. Friend some time since submitted to the House his plan of raising the income tax, and it was fully discussed, he gave an intimation that he would return to the attack at "a future time." But, according to the traditional usages of the House in such matters that meant a future Session; and after a debate and division had taken place, it was thought that some respite had been purchased, and that it was not convenient to revive matters of the kind by delivering the same speeches textually and bodily over again in the course of the same Session. His hon. Friend said that he (the Chancellor of the Exchequer) had estimated the loss which would result from the adoption of his plan at £2,600,000, instead of something over £2,000,000. But the explanation was perfectly simple —they were speaking of two different things. When his hon. Friend said that the loss would be about £2,000,000, he was not speaking of his second plan for deduction upon the lower incomes. The additional loss which that plan would entail might be estimated at £500,000, and that added to £2,100,000, which would be the loss under his hon. Friend's first plan, would make £2,600,000. Now, the deduction of £2,100,000 his hon. Friend would distribute with a generous hand among va- 686 rious classes. To landed proprietors he would give 1–12th, to owners of house property l–6th, to owners of mines and ironworks 15 per cent, to owners of quarries 10 per cent, and to the most favoured class of all—farmers, traders, professional men, and recipients of salaries from office, 33 per cent. There were some persons from whom his hon. Friend proposed to make no abatement—namely, the recipients of fines.
§ MR. HUBBARDsaid, with respect to that class, he proposed to make a deduction of the whole.
§ THE CHANCELLOR OF THE EXCHEQUERobserved, that his hon. Friend would then make greater havoc with the tax than he had anticipated. He had been blamed by his hon. Friend for overstating the amount of burden sought by his hon. Friend's scheme to be laid on the owners of land and houses, and he thought it possible that in some respects he might have overstated the amount; but, whether that was so or not, it did not touch the reason and nature of the case. His hon. Friend was going to burden one class, and to do that by disburdening another; and that was the objection to the scheme. The owners of land were already under great disadvantage, inasmuch as they paid the tax on the gross and not on the net income. The owners of houses were under greater disadvantages than the owners of land; for, while they also paid on the gross, and not on the net income, unfortunately for them, their outgoings in a large amount of cases were greater than those of the owners of land. Then came his hon. Friend and proposed to deduct l–12th from the owners of land, and l–6th from the owners of houses. But what his hon. Friend deducted from the owners of lands and houses made its appearance again in the shape of a tax at a more elevated rate, which not only took away the whole benefit of the deductions, but positively imposed an additional burden. If his hon. Friend were to have his own way with the income tax, and were to carry his favourite project for reducing the rate on official salaries and on the incomes of bankers and merchants by one-third, he must, in order to make the tax produce the same amount as it then did, raise the rate from 9d. in the pound to 11d. The proposition only tended to create a new class of inequalities and anomalies, and would in some instances confer a boon totally unwarranted. In the case of the 687 greater number of the best houses the outgoings did not reach 5 per cent, and yet to the proprietors of these his hon. Friend proposed to make a present of 16 per cent. There were, on the other hand, a great number of owners of house property whose outgoings reached 25 or 35 per cent; and what comparatively was a boon of 16 per cent to them, even if it were an absolute boon? His hon. Friend's proposition would not only introduce inequality and injustice in a new form, but would do something more; for, when his hon. Friend said that he would lay on the owners of house property 3d. additional in the way of tax, it was unnecessary to say what an enormous amount of taxation the plan of his hon. Friend would lay on large classes of house property owners, who at present paid a tax on at least 25 per cent in excess of their net income. His hon. Friend's plan appeared to be unjust, inexpedient, and impracticable. So long as his hon. Friend talked of deducting from certain schedules, he would find plenty of willing listeners; but when, on the other hand, he stated that it would be necessary to increase the rate of tax on some schedules, then all ears, except those of the most favoured classes, to whom he gave 33 per cent, would be closed against him. His hon. Friend would, however, have succeeded in confronting class in the most painful and odious warfare with class. When the struggle about free trade was brought to a close, it was thought that that painful warfare arising out of an erroneously supposed opposition of interests between classes was in a great measure got rid of; but the plan of his hon. Friend would do much to revive all those angry feelings. He trusted, however, that on every occasion when the subject was brought forward his hon. Friend would fail to obtain a vote from the House of Commons favourable to his plan, just as he failed to do so from the Committee, which, without adverse prejudices, examined his plan fairly. With respect to the Motion, the first portion, in the form of a tabular statement, could be given; but, as to the latter portion, there was an objection to public departments giving Returns founded on computations.
§ SIR FREDERICK HEYGATEsaid, that as a Member of the Select Committee of last Session he desired to say a few words. It was essential that in every matter of this kind justice should be adhered to; and he had come to the conclusion, upon an examination of the whole question, that 688 the persons under Schedule D not only suffered no injustice, but that they actually possessed several advantages over the persons assessed under the other schedules. The chief axiom of the hon. Member for Buckingham (Mr. Hubbard) was, that a tax should press equally on all members of the community, and that the income tax was not a tax of that description. Now, on looking at the different classes of taxation he was at ft loss to discover where any such principle could be found. For instance, the duty on insurances fell chiefly on the owners of house property, and the probate duty was a tax on survivors only. The very exemption of incomes under £100 a year is made on the same principle; an exemption which he thought it would be only fair to extend to those under £150 a year. There was no tax, he contended, that pressed equally on all classes of the community. The hon. Member for Buckingham had made use of the argument that the unfair pressure of taxation under Schedule D led to a great amount of fraud in making the returns. If that were so, it arose, not from the amount these persons had to pay, but because they had the power of self-assessment. Now, this was in itself a great advantage which the persons assessed under Schedule D possessed over those assessed under the other schedules. The late Mr. Wilson proposed to divide incomes into three classes. From the first class, which comprised realized property, he proposed to make a reduction of 12½ per cent. From the second, which comprised incomes partly derived from realized property, and partly from the personal exertions of individuals, he proposed to deduct 25 per cent. From the third class, comprising all persons under the operation of Schedule D he proposed to deduct 50 per cent. Mr. Wilson fixed upon the sum of £530,000 as the amount which it would be fair to deduct from the various Schedules, principally Schedule D, before assessment to the Income Tax. That was in 1853. Now, it appeared to him (Sir F. Heygate) that in considering this question the succession duty on land had been entirely overlooked. It should be borne in mind that the succession duty was proposed by the Chancellor of the Exchequer with the view, among other objects, of remedying any injustice the owners of property which came under the class of Schedule D might be supposed to suffer. The right hon. Gentleman the present 689 Chancellor of the Exchequer, in making his Financial Statement, in 1853, had used the following words:—
It is said that the legacy duty is in the nature of a tax upon property. It is a tax upon property, and because it is a tax upon property it meets the views which have been so much favoured by a large portion of this House and by public opinion—namely, that if the income tax is to bear unequally upon intelligence and skill, as compared with property, then that inequality ought to be redressed in some way or other. I think this is a safe mode in which to redress that inequality; and if this is a tax upon property, it is divested of the danger that attends the taxation of property generally." [3 Hansard, cxxv., 1395.]The hon. Member for Rochdale (Mr. Cobden), in his speech on the budget and income tax in 1853, also said—At the same time I have presented to me another portion of the budget, which I believe not only goes far to redress the inequalities which existed in the old income tax, but which I consider a bold and honest proposal; and, whatever be the fate of this budget, the right hon. Gentleman (the Chancellor of the Exchequer) and his colleagues have earned for themselves, I think, great honour for their straightforward and resolute conduct in grappling with a question which defeated Mr. Pitt in the plenitude of his power, and with which no one has ever since dared to meddle—I mean the legacy duty. … I must say that, looking at the income tax, coupled with the legacy duty—taking them together, viewing them as the keystone of the arch of this budget—I take them both, and I take them with both hands. I feel as strongly as any man in this House the case, of professional men; but I have not found in the north of England any very active opposition to the equal rate of duty upon all classes …. It will not, I think, benefit the professional man or the small trader in rural districts; but the legacy duty upon real property — although I should wish to view that question per se, and not as a compensation, though we are made up: of checks and compensations in this country— will be some compensation to the professional and | trading community, and will somewhat tend to reconcile them to the tax in its present form." [3 Hansard, cxxvi., 691–2.]Now, the sum which Mr. Wilson had fixed upon as representing the amount of injustice inflicted on the taxpayers under Schedule D was £530,000; but the succession duty exceeded that amount, the duty having produced in each of the last two years more than £600,000. Now, when the hon. Member for Buckingham talked of the unfair pressure under Schedule D, he entirely overlooked the advantages which these persons derived from the privilege of being allowed to take the average of three years, as well as from the privilege of self-assessment. To show how that operated, it must be observed that from the enormous increase in our trade it 690 was fair to look for a proportionate increase under Schedule D. But while from 1854 to 1860 our exports have increased from £115,821,000 to £155,692,975, the amount of the income returned for assessment under Schedule D had shown an increase of no more than £2,417,000, the amount in 1854 having been £93,022,000, and in 1860 not more than £95,439,000. Now, either the trading classes under Schedule D, for whom such a piteous case had been made out, had carried on an enormous trade without profit or with only a small profit, or else they were able by some peculiar process known only to themselves to neutralize those returns. Mr. Till, the intelligent clerk to the Commissioners of Income Tax for the City of London, stated to the Committee, that each penny of tax under Schedule D produced from the beginning £50,000, and no more now, although trade had so increased. On looking at the large increase in the value of land around large towns, and at the general prosperity of the manufacturing and trading classes, as shown by the increased price of every article of luxury, it was impossible to believe that in ten years they had not received a larger accession of income than I £2,417,000. It was of essential importance that the subject should be grappled with at once. For his own part, he could I not see that the taxpayers under Schedule D were subject to any special injustice, and his confidence in his fellow-countrymen was so strong as to induce him to believe that the moment it was proved to them that such was the case they would desist from I all agitation on the subject. He must, however, remark that all the evidence taken before the Committee went to show that the income tax was essentially a bad tax, and that it ought to be reduced to as small an amount as possible. The facility with which such large sums were raised, was a temptation to extravagance, and he believed the Estimates would not pass so readily if the House had not the income tax to fall back upon. If that tax was only resorted to in times of danger, instead of quarrelling who should bear the most or the least, he believed the people would come forward like good citizens and bear their share of it fairly and honestly.
§ MR. POLLARD-URQUHARTsaid, he could not but deprecate the line of argument by which it was sought to uphold that the income tax did not press unduly on Schedule D, because, by leaving a door 691 open for the commission of fraud by means of making false returns, its pressure might be mitigated. He regretted that the Chancellor of the Exchequer had not acceded to the whole of the Motion, for the Returns moved for would have shown the country what would have been the real effect of the readjustment proposed by the hon. Member for Buckingham. Great injustice was at present done to the landowners, and to those who derived their incomes from certain kinds of house property, and the time had come when something should be done for their relief. He was the more anxious that the income tax should he placed upon a sound basis, because he desired to see it permanently established, believing that it had enabled the present and past Governments to improve our fiscal system, and that future Governments would find in it the means of taking off those indirect taxes which still restricted our commerce, and lessened the comforts of the great body of the people.
§ SIR HENRY WILLOUGHBYsaid, he must decline to discuss the income tax, because, do what they would, they could not make it agreeable. It was a most detestable impost, incapable of amendment, and the best plan would be to get rid of it as soon as possible. Such a tax ought not to exist in time of peace; and if, as they had been told by the right hon. Gentleman the Chancellor of the Exchequer, £65,000,000 was a revenue amply sufficient even during the Crimean war, there was some reason to hope, that if things went quietly, at least one-half of the income tax might be taken off next year. But what he wished to remark upon at that moment was the objection taken by the hon. Member for Buckingham (Mr. Hubbard) to the Chancellor of the Exchequer, when authorized by the Legislature to raise annuities, being permitted to Bell those annuities practically to himself. It appeared that a large portion of the Fortification Annuities had been taken by the savings banks. Everybody knew that the manager of the savings banks had nothing to do with such transactions, which always took place between the Chancellor of the Exchequer of the day and the Commissioners for the Reduction of the National Debt. Now, the Chancellor of the Exchequer was a leading Commissioner, and practically he had sold the annuities to himself. That was a most vicious system, and he hoped the House would stamp it with its reprobation.
§ SIR STAFFORD NORTHCOTEsaid, he would suggest that the hon. Member for Buckingham, in accordance with his own plan for the readjustment of the income tax, should distinguish in the Return for which he had moved between trades and professions generally and joint-stock companies. The proposal of the hon. Member was to allow trades and professions generally to deduct one-third from their incomes; but he would not permit joint stock companies carrying on business to make any deductions at all. Such a plan, if adopted, would operate most injuriously, and it was only right that the real effect of it should be made known to the country. His hon. Friend would by no means get rid of the difficulty and injustice of the income tax by his plan. He mitigated them only in a very insignificant degree. Nothing was easier than to point out anomalies in its incidence; but that fact only showed that they ought not to lay that stress on it they were now doing —that it was desirable to reduce the pressure to the minimum, and that they should only have recourse to the tax in an emergency, and for great objects; but the scheme proposed by his hon. Friend was full of objections and inequalities. Thus, for instance, there was no doubt that landed proprietors whose property was subject to mortgages were unjustly treated by the system of charging upon the gross rental; and be understood his hon. Friend to say that by his plan he would get rid of that injustice, by relieving the proprietor from a proportion of the charges of management; but that really was not sufficient, and would still leave him liable to more than his fair proportion as calculated upon his net income; and the proposal to increase the tax upon real property in order to relieve the taxpayer under Schedule D would increase the injustice, and make the proprietor of landed or house property liable to perhaps more than ho paid then. His hon. Friend drew a line which would cause the greatest dissatisfaction, and give rise to questions that would go on spreading from year to year until the tax became perfectly odious, and utterly useless for all purposes of finance.
§ MR. HUBBARDreplied: He should have been very glad to have his Return rectified according to the suggestion of his right hon. Friend the Member for Stamford; but he found that the Board of Inland Revenue could not, without much trouble and delay, distinguish the returns 693 of public companies. But the general result would not be very different from that under the form of Return he proposed. It was a principle in his scheme to assess differently the products of property and the earnings of skill and intelligence. The impossibility of learning the amount of traders' capital must reconcile one to the necessity of taxing the combined product of skill and capital in private trade; but as joint stock companies distinguished their proprietors' capital, it was both practicable and just to distinguish for taxation the salaries of the skilled labourer and manager from the dividend of the proprietor. His right hon. Friend objected to the second Return he had moved for; and as his right hon. Friend had admitted the point he wished to prove—namely, that his scheme so far from raising the effective tax on landowners' residue of rent from 11½d. to 13⅓d., would actually reduce it to 10d.—he would omit it, and conclude by moving for the first Return only.
§ [Then the Returns, as amended, comprised in the Tabular Statement only, were agreed to, omitting the paragraph following the same.]
§ Returns ordered.