HC Deb 30 April 1872 vol 210 cc2041-4

rose to move— That a Select Committee be appointed to consider the advisability of repealing that part of the Income Tax Act which relates to Incomes derived from Trades and Professions, excepting Joint Stock Chartered, and other Incorporated Companies, and substituting for such Revenue other Taxes less grievous and inquisitorial; and to relieve from the operation of 'The Act' all Incomes of £200 and under; and, further, to consider whether any other and what Tax or Taxes specially affecting those classes now sought to be relieved could be equitably imposed as a substitute for such part of the Income Tax so proposed to be repealed. The hon. Gentleman said, that the judgment of the country had been pronounced, and pronounced most emphatically, against the income tax. He would not ask the House to grant a Committee to consider the incidence of that tax. That had been done over and over again, and the illogical, unjust, vicious, and mischievous character of the impost had been clearly demonstrated. The worst feature of the income tax system was the inquisitorial and overcharging proceedings of the Special Commissioners. The Government and the officials at Somerset House, when a case of grievance was brought before them, showed a desire to examine into it and afford a remedy. It was the irresponsible officials connected with the assessing and levying of the tax whose arbitrary acts and unjust decisions rendered the impost so odious to the community. The country had declared through innumerable public meetings irreconcilable hostility and war to the knife against Schedule D, relating to trades and professions. No modification or re-arrangement of that schedule would satisfy the public; nothing less than the repeal of that part of the Act would content them. The first Resolution agreed to by the Committee of 1861 condemned the continuance of the tax, and his Resolution proposed to take up the question where the Commissioners of 1861 left it. He believed that if that portion of the income tax were repealed it would leave a deficiency of something under £2,000,000. The Chancellor of the Exchequer, when asked to surrender a large portion of the Revenue, would very naturally ask from what source the deficiency was to be made up; but, at the same time, the right hon. Gentleman had admitted, while stating that he could not spare this part of the tax, that it worked hardly and dishonestly, and that he would not object to its being got rid of in its present form if some good substitute for it could be obtained. He (Mr. Sheridan) had appended to his Notice of Motion various suggestions with reference to the sources from which revenue might possibly be drawn to recoup the Government for the loss they might sustain by the relinquishment of the tax under Schedule D. These suggestions were not his own; but they had been well thought out by people who had earned reputations in matters of finance. The suggestions were whether those new taxes might not be imposed in place of the tax under Schedule D—a graduated license tax or an assessment upon the rental of those classes proposed to be relieved; a small stamp duty upon all invoices and bill-heads issued for amounts in value of 40s. and upwards; a smaller duty upon all invoices and billheads issued for amounts between 20s. and 40s.; an extension of the receipt stamp duty to all receipts for sums between 20s. and 40s.; and the extension of the present stamp duty—or some part thereof—on bills of exchange or promissory notes to all endorsements—except the first—upon such documents. It might be said that if they were to adopt any scheme on this subject and recommend it to the House they would be trenching on the province of the Chancellor of the Exchequer, whose duty it was to find out what available means there were for raising the necessary Revenue of the country. But from the earliest period of the history of Parliament it was always considered the duty of the Commons to provide for the taxation of the country, and to criticise the measures brought forward for that purpose; and Sir Erskine May, in his valuable work, had laid it down as the duty of the Chancellor of the Exchequer to declare what taxes could be diminished, and what could be properly imposed or increased, leaving it for the House to determine the question. There was, therefore, nothing irregular in the suggestions themselves, and nothing irregular or questionable in the proposal that a Committee should be appointed in order to see whether they could replace one tax by another. It must not be supposed, however, that the income tax payers objected to bearing their fair share of taxation—on the contrary, they were quite willing to pay the same amount as they were now paying if it were collected in some other shape, and by some other method. They would even be willing to submit to a new assessment in the shape of a house tax, and to allow it to be a fixed tax, provided that they could thereby get rid of the abominable and inquisitorial tax under Schedule D. As to the first suggestion for a graduated license tax, or an assessment upon the rental of those classes who were proposed to be relieved, it was proposed that the trader should make a return of his last three or five years' business; that upon that return there should be based an estimate of what it was considered fair for him to pay; and that he should be assessed at that amount in the same way as if he were assessed upon the rental of his house. Supposing some such system were adopted, and made to apply to trades and professions, there would be some saving in the annual expense of collecting the tax. It might still be urged, however, that by adopting such a fixed tax there would be lost that element of elasticity which was of the greatest possible value to the State, inasmuch as the wealth of the country was constantly increasing and the amount of the tax continually varying. But the answer to that was that in the permanence of a fixed tax the State would get a full equivalent for the fluctuating character of the present income tax. It was manifestly unfair and unjust, and it was constitutionally and politically unsound, to swell the income tax for every passing exigency of State.

Notice taken, that 40 Members were not present; House counted, and 40 Members not being present,

House adjourned at Eight o'clock.