HC Deb 14 July 1896 vol 42 cc1507-9

Income Tax for the year beginning on the 6th day of April one thousand eight hundred and ninety-six, shall be charged at the rate of eightpence.

*MR. HERBERT LEWIS (Flint Boroughs) moved after the word "charged" to insert the words— in the case of incomes under £500 a year at the rate of 4d., between £500 and £750 a year at the rate of 6d., between £750 and £1,000 a year. He observed that the question of the graduation of the Income Tax was one which had been frequently before the House in the past few years, and the importance of the subject was his justification for now bringing it forward. The principle of graduation had been definitely and finally accepted on both sides of the House, and it was now established as part of our fiscal system. As the Leader of the Opposition, when Chancellor of the Exchequer, said, the difficulties that lay in the way were of an administrative and practical nature. The right hon. Gentleman said in Committee it would be difficult for a man to make a statement as to the aggregate of his income. He could not see the difficulty. Surely there was nothing on which a man could have completer information than the amount he received every year. Having regard to the principle involved and of the acceptance in a large measure of that principle, the House was entitled to know exactly from the right hon. Gentleman what difficulties were in the way of the adoption of that principle. He hoped the right hon. Gentleman would not raise any unnecessary difficulty in the way, because the reform would be welcomed by the largest section of the taxpayers. He had no fault to find with the way the Chancellor of the Exchequer approached the question when the matter was in Committee. The right hon. Gentleman had said there was a good deal to be said for and against the graduation of the Income Tax. If there were disadvantages attending the operation of the scheme he would ask the right hon. Gentleman to put the advantages against the disadvantages and he would find that the advantages outweighed the disadvantages.


said that he understood the hon. Gentleman to move this Amendment in order to raise the question with which it was connected. But if the system suggested by the Amendment were adopted, graduation would have to begin at a higher point and be raised to a higher amount in the pound. His great fear in this matter was that any change of the kind—and it would be a great change—in our Income-Tax system would tend to evasion in regard to the larger incomes. Through the law relating to the Death Duties, they were able to obtain a more or less correct indication of what a man's whole property was. But it would be difficult to ascertain all the sources from which the income of a very rich man was derived. He might have money invested in many ways in all parts of the world. And although, with regard to a certain class of investments the officers of Inland Revenue might trace them, the result would be this anomaly—that where a man had all his eggs in one basket he would almost certainly be taxed at a higher rate than a man of the same means whose investments were manifold. However, he had already undertaken to examine into the matter.

MR. SAMUEL EVANS (Glamorgan, Mid.)

thought it was important that these matters should be brought up year after year, because some day a graduated Income Tax must be established. There was no reason why the Income Tax should not be collected at the fountain head, from the large companies. If the highest scale of Income Tax was 1s., why not charge all investments at that rate, and leave it to the individual taxpayer to claim any abatement. This was already done in reference to the great banking and railway companies. He hoped the Amendment would be pressed to a division.

Question put, "That those words be there inserted."

The House divided:—Ayes, 34; Noes, 134—(Division List, No. 334.)

Clause 26,—