§ Mr. Goulburn
moved the order of the day for the House to resolve itself into a committee on the Income-tax Bill.
§ Mr. Wallace
said, his object was to endeavour to suggest to the House some plan by which the adoption of an Income-tax might be obviated. It was the general opinion out of doors that the right hon. Baronet, if he had been aware of the present plentiful state of the money market, would never have submitted this proposition to the House. Now that the Corn-law question had been disposed of, and that the tariff had not yet been proposed, he thought the time had come to propose some measure by which the necessity for an Income-tax might be obviated. The bill had only recently been placed in their hands. He had seen it to be his duty to go through the bill with all the attention in his power, and he could not have thought it possible, that any enactment containing clauses so repugnant to the feelings of the inhabitants of Great Britain, could have been proposed by any set of men whatever. It had been said, that these enactments were founded on the acts of 1798 and of 1806, but he was also aware that at that period there had not been such rigid constructions placed upon the enactment of laws of this description. The assessed-tax laws had formerly been administered in a more mild manner than of late years. Since that period the assessed-tax acts had in England and Scotland been year after year enforced in a more rigid manner, and it was only last year the Chancellor of the Exchequer had intimated to the House, that he expected to raise a considerable additional sum under the head of assessed taxes, not only by an increase in the taxes themselves, but 1074 by a more stringent enforcement of the enactments of the existing laws. That was stated as being not for the purpose of extending them in any new direction, but to make them more searching and productive, and they were made so stringent now, that they were little less odious than the bill which he now held in his hand. There was a strong opinion prevailing out of doors that at this stage they were entitled to receive communications from the right hon. Baronet and the Government as to their intentions with respect to the tariff, and there was an opinion that his own supporters were so opposed to that bill that it would not be in his power to carry it. Therefore it became apparent that any means of stopping the Income-tax should be brought before the country. Various plans had been suggested; he would not venture to say what might be done in the way of reducing the expenditure of the country. He thought that, by means of temporary advances, by loans on Exchequer-bills, or some other way, they might gain a year to look about them; and then, if necessary, the right hon. Baronet should take a higher amount than 3 per cent. and free them from other taxes. If it were necessary it would be the bounden duty of the right hon. Baronet to take 10 or 12 per cent, by an Income-tax, that he might be the better able to relieve them from other taxes, and take a bolder step in the right direction, than he was now doing. The right hon. Baronet might take a year to consider that. Such a proposition would be listened to with satisfaction by the country, if it believed that a larger amount of taxation would be removed, along with the timber duties and others, which had been mentioned in the tariff. Whether that was a right application of the money to be raised by the Income-tax was a question; but his own conviction was, that an issue of Exchequer-bills to the amount of 4,000,000l., the sum proposed to be raised by an Income-tax, would not be refused by the country, and he was satisfied, from what he endeavoured to ascertain in the City, that such was the plenty of money, that even this very day it could be procured at 2 per cent. If that were true, and it was the opinion of well-informed men that the sum required could be procured for between 2 and 3 per cent. interest, he considered) and his opinion was confirmed by 1075 the judgment of others well acquainted with the subject, that it would be a vast deal better to get the money by Exchequer-bills, rather than to inflict on the country the machinery of the present bill. He could not find a term sufficiently expressive to apply to the nature of the bill, it was in its provisions so horrid. Crimes of the deepest dye, which certainly would be committed under its provisions, were guarded in the most careful manner in the bill. Was it, he would ask, fair, at the end of four years of continual distress, to ask the commercial community and the tradesmen of the country to disclose their affairs? He believed that the tariff was a proceeding in the right direction, but it was equally clear that there were other means of raising the money necessary to meet the deficiency in the revenue without resorting to an In come tax. There was a strong feeling that the course he had alluded to before would be his wisest course. He would not delay the resolution which was no the paper of that evening, because he would be strongly pressed by several parties not to do so. He should, however, take another opportunity of bringing the subject forward.
§ Sir R. Peel
said, that after the long debate upon the principle of the Income-tax Bill in every stage, he had been little prepared for the notice and speech of the hon. Member. However, it was some consolation to hear that the hon. Member did not mean to resist the farther progress of the bill in any unfair or factious spirit, even while he so strongly recommended other temporising expedients, such as a loan of 4,000,000l. or an issue of Exchequer-bills. The hon. Member wished that the country should have a-year to look about; but he could not but recollect the objections that had been urged when he had asked for only five months to enable himself and his Colleagues in office to review the financial state of the empire and to prepare for Parliament the necessary measures, on Government responsibility. Those objections came from the friends of the hon. Member, but he should like to know what would have been said to him by his political opponents if, at the end of five months, instead of bringing forward bold and intelligible propositions, he had come down to the House and asked for another year to deliberate and decide. He could fancy the sort of reception he should 1076 have met with when he thus neglected to keep faith with the Country and disregarded his own solemn undertaking. True it was that the state of public credit could not have been accurately foreseen, but the whole House had shown a determination to abandon the system of loans, in order to make a vigorous effort by laying on taxes to retrieve the affairs of the State, and what had followed in respect to the public credit had been the result of that determination. The hon. Member had referred to the condition of the money market, and to the possibility of contracting fresh loans; but surely that condition afforded the strongest stimulant and incentive to persevere in the course that had been commenced, the object of which was to make the income equal to the expenditure, by raising an additional revenue by means of direct taxation. If the public credit should continue to improve, his right hon. Friend the Chancellor of the Exchequer might be enabled to return to those advantageous operations which both reduced the national debt and lowered the interest upon it. Was it a reason for incurring a fresh debt that the funds were at 92, having risen to that point because no new loan was contemplated? The hon. Member would find himself much disappointed if he fancied that the funds would remain at 92 if his scheme were carried into execution. The amendment moved to the address to the Throne of last year distinctly implied that the old system of loans was to be abandoned. That amendment came from his side of the House; and when the proposal of an Income-tax was brought forward, the noble Lord (Lord J. Russell) produced a resolution which, almost without exception, Was supported by the votes of the whole minority, including the honourable Member himself. What said that resolution?That this House is fully sensible of the evils of a continued inadequacy of the public income to meet the public charge, and Will take effectual measures for averting the same in future years.These were the words of the noble Lord and his friends, and they contained a distinct declaration of opinion that the system of loans ought to be abandoned. To this point the whole House was pledged, and it must forfeit all character for consistency if within a fortnight afterwards it took a course directly the reverse of that Which 1077 it had voted to be sound, prudent, and necessary. As to the tariff he had already given the strongest assurances that the general principles of it should be adhered to, and it was the desire of himself and his friends that it should be submitted to the House in its amended shape as early as possible. He believed that the declaration he had before made upon this point had given general confidence, and one of his reasons, as he had originally stated, for proposing the Income-tax was, that he might be able to effect the reductions contemplated by the tariff It included a sacrifice of revenue to the extent of 1,200,000l., and he was aware that the defence of the Income-tax must mainly rest upon the adoption of the tariff in its leading principles. Such was the general impression out of doors, and his Colleagues entirely concurred with him in thinking that an Income-tax ought to be accompanied by measures of simultaneous relief. Trusting Willingly and entirely to the assurance that there Was no desire on the other side to raise unnecessary obstacles, he was ready to devote some time to the introduction and consideration of the tariff. The Income-tax Bill was on the point of going through the committee, and as soon as that proceeding had been completed, pressing it forward steadily from day to day, he had not the slightest objection to interpose some delay before the report was brought up, in order that the House might take into its view the leading portions of the tariff. As it consisted of 1,100 articles, it would be vain to debate each of them separately, and perhaps hon. Members would previously point out the parts to which they objected with a view to Saving time. The general wish of the House must be to proceed with as much rapidity as Was consistent with proper deliberation, and this object would be facilitated if hon. Members would adopt the suggestion he had just thrown out. The first step ought to be to pass the Income-tax Bill through the committee, and that should be followed by the statement of the tariff. He did not mean to pledge himself as to the details, but he was ready to give an assurance, if, indeed, a fresh assurance were wanted, that it was not the intention of the Government to pass the Income-tax and then to disregard the tariff. Some alterations had been made in it: he had had various communications with many parties, and, in concert with 1078 his right hon. Friend the Chancellor of the Exchequer, farther reductions had been made in the duties upon raw materials, it having been urged that that course was of essential importance. When the tariff came to be again seen, it would be found that Ministers had fulfilled every engagement they had entered into respecting it; and he did not think that many would be found to participate in the alarm expressed by the hon. Member, that it was the intention of Government to vary materially from their general proposal respecting the future commercial system of the British empire. Under these circumstances, he hoped that the present debate would proceed no farther; and that the House, without more delay, would resolve itself into a committee on the Income-tax Bill.
§ Mr. Hume
felt anxious as this was the first opportunity he had had to express his opinion, of the measures proposed by the right hon. Baronet (Sir Robert Peel), and he was called to do so in justice to those who had sent him to that House, he appeared again in that House with some reluctance, and he hoped the House would bear with him for a short time. The right hon. Baronet might fairly expect that he was not likely to concur in the recommendation of his hon. Friend (Mr. Wallace) with regard to a loan. During several years past he had urged on both sides of the House—he would not at present blame either party though both deserved to be blamed—the impolicy of spending more than the annual revenue of the country. It was the late House of Commons which by its un-necessary increase of establishments and expenses had brought the country into its present difficulties. He was fully aware of the financial and other difficulties which now existed, and he was free to confess that the right hon. Baronet as Minister of this country, had undertaken a most arduous task-—a task Which he would find most difficult to perform. He must candidly confess that he had not, expected to find the right hon. Baronet so earnest in his advocacy of, and so sound in the principles of free-trade; and he felt therefore the more desirous to express his approbation of the course taken, and of the manner in which the right hon. Baronet had grappled with the commercial difficulties of the country; The right hon. Baronet proposed that 1079 prohibition should no longer exist against the importation of any single article. Mr. Huskisson had prided himself in 1826 in proposing that there should be no prohibition of any manufactured article, and now the right hon. Baronet extended that principle to every article of commerce. The right hon. Baronet had broken in upon these monoplies; and it was to be regretted that he did not propose to abolish them altogether; he was particulary sorry that the right hon. Baronet had only altered without abating the giant monopoly of the Corn-laws. Nor had he heard any sufficient reason assigned why the sugar monopoly should not have been dealt with, as he had with other articles of commerce embodied in the tariff. He (Mr. Hume) ventured to say that if the right hon. Baronet had reduced the duty on foreign sugar to 50 per cent. instead of leaving a duty of complete prohibition, no colonial interest would have been much injured. He regretted that the right hon. Baronet had not laid a portion of the new taxation on the landed interest, the agricultural interest would not in reality pay one farthing of the revenue to be raised from the new taxes, because it would obtain much more by the high monopoly price of corn and other produce of the soil than they would have to pay of the Property-tax. He saw in the continuation of the Corn-laws, and in the application of the tax to the commercial interests, a violation of the principles which the right hon. Baronet had so lucidly and ably laid down in his speech, introducing the bill. The right hon. Baronet had laid down the broad principle that he would not protect any one interest against another—that he was determined to do equal justice to every class in the community. The right hon. Baronet had not carried out his principles. He was sorry that the right hon. Baronet had not proceeded further in his reductions of many of the chief articles in the tariff; but the circumstances of the country would soon compel him to proceed further—it was impossible that the present tariff could stop where it was. He thought the right hon. Baronet had not received the credit to which he was entitled for the reduction of the timber duties. He considered the reduction of these duties of great importance to the general interests of the country. If the right hon. Baronet would proceed still further and reduce the 1080 discriminating duty on foreign timber he would greatly increase the benefits to the community. Let any hon. Member read Mr. Laing's observations on the effect in the habitations and comforts of the poor of cheap timber in Norway—a poor country; and his opinion of the effects of dear timber in this a rich country, and he must be convinced that the duty on corn and sugar stood next to the timber duties in importance. The reduction of the timber duty would benefit the manufacturing and shipping interest, and also in the erection of farm buildings and would be of the greatest service to all classes in the country. A difference of opinion had existed as to the necessity of an Income-tax, and he (Mr. Hume) thought it would have been better if the right hon. Baronet had first tried the tariff as he probably might have found that the loss of revenue which he thereby anticipated would not have been so great as he expected, and that he might have dispensed with the Income-tax altogether. He (Mr. Hume) was perfectly willing that a large portion of the revenue of the country should be levied by direct taxation, it was the best tax on many grounds. By indirect taxation the consumer was called on to pay an additional percentage for outlay of capital, for the duties levied on the articles, and moreover indirect taxation always encouraged extravagance, profusion and waste. There were other modes of raising taxes more just than the proposed Income-tax. If real property in succession was placed on the same footing as personal, the Income-tax would not be required. It was but justice that real property should be placed on the same footing as personal, before personal is subjected to additional taxation. Why had not the right hon. Baronet called on the public establishments of the country civil and military in the present state of financial and manufacturing distress to make a sacrifice of part of their incomes. Before any Income-tax was imposed economy and retrenchment ought to have been carried to the utmost extent. The same revenue amounting to 52,361,000l., had been raised when capital returned 15 and 20 per cent., but last year it had been raised on a capital which did not return 5 per cent., by which alteration of profits of capital and industry the burden of taxation in this year was as heavy as if the revenue had amounted to 1081 70,000,000l. as compared with the former year's taxation. And it was now proposed to levy by an Income-tax 4,000,000l. more, raising the revenue to upwards of 56,000,000l. at a time when the country was suffering under severe privation from want of trade and employment. The Queen had only 60,000l. a-year out of her civil list of 385,000l., and the rest of her income being expended on Lords and ladies in waiting, and on the extravagance of court show. He must press upon the House that the distress which existed amongst the manufacturing population was very great and required immediate attention and relief. There were thousands and tens of thousands depending at that moment on 4s., 5s.,6s., and 7s.a-week, to support a family with after working from six in the morning till eight or ten at night. There was so great a contrast in the state of the court and of the mass of the people. Was it possible that those amongst whom such distress prevailed should be content, whilst they saw court revelry and every extravagance prevail amongst the public servants of the Crown. He did not wish the Queen's individual income to be lessened, because she had a smaller income than many of the Peers of this country; but what he objected to was to see the Lord Chamberlain and the other public officers paid in the extravagant manner in which they were, whilst privation and distress so generally prevailed in the country. He believed that the Queen would be glad that the reduction of expenditure should if possible be made. It could not be pleasing to her to see all the glittering appearance at her court, such as formerly distinguished the court of Louis 16th, whilst tales of misery and destitution came from every part of the manufacturing community. ["Laughter." ] Gentlemen might laugh, but he believed that if they had at that moment the power to bring before them some of the courtiers who had attended the court of Louis 16th, and compare their dresses and habits with the fripperies and gold lace now seen in her Majesty's court, those spectre courtiers would tell them that the court of the present day equalled that of Louis 16th in extravagance, and that they ought to take a lesson from what befell the French court in 1789. He (Mr. Hume) suggested the precedent so appropriate, that he wished the House to profit 1082 by that eventful example. He thought, therefore, the time was come for doing away with some of the gold lace and its attendant profusion. The public money ought not to be so wasted on a few courtiers, whilst so much distress prevailed amongst the people. They may be told that they had made a bargain of a civil list with the Crown; he would stand to that bargain. But let the question be fairly put to her Majesty, whether she would not consent to do away with some portion of the expense of her court, which only supported pageantry and show, before they called on the country in time of peace to bear an Income-tax—a tax so odious, that it had no one quality of what might be stated the requisites of a proper tax. It may be evaded in a great degree by money. A tax ought to fall equally on all parties, according to their ability to pay it. Would any man say the Income-tax fell equally? It visited property of different values with the same fine, and that was unjust. It was inquisitorial, demoralising, and impolitic, and would affect the poor and middle classes very severely. He complained, therefore, that her Majesty's Ministers had not first advised a severe reduction in the public establishments and expenditure. The 4,000,000l. now expended charges in collecting the revenue might be reduced to 2,500,000l. by the system of consolidating and reducing the offices which the right hon. Baronet might carry into effect. He admitted, that the discontents of the agriculturists and other monopolists were brought to bear most unfairly against the proposed changes in the tariff of the right hon. Baronet. But at the same time, if the expenses of collecting the revenue were reduced to 2,500,000l., and a large reduction made in the civil expenditure, an amount equal, or even larger, than what was expected to be levied by the proposed Income-tax, might be saved. He must think there could be nothing more terrible to taxation than the effects the imposition of this tax would have upon the country—it would lead to an inquisitorial proceeding into the affairs, and to the consequent ruin of those whose credit and resources were doubtful, of which the right hon. Baronet could scarcely, he feared, have an idea. He (Mr. Hume) drew a marked distinction between an income and a property-tax:—The income of every man employed in industry, and in the 1083 accumulation of property ought to be untaxed; but, on the other hand, he contended, that all property such as land, houses, or property fixed, capital, testable, or moveable, formed a fit subject for taxation. The, injury to the community would be less, by confining the tax to the product of capital, and not to the profits of industry. He would, in support of that principle, be prepared to take off 6,000,000l. of indirect taxation from a number of articles consumed by the people, and lay on a direct tax, on property to that amount, which he was sure would give much more relief to the people, and be more beneficial to the people than the imposts under which they at present laboured. Under the proposed tariff the right hon. Baronet would not be able to give sufficient immediate relief to the commercial and manufacturing interests. Let him give that relief by removing the large monopolies of food, and no man would be more ready to support the right hon. Baronet than he should. Before sitting down, he had again to urge upon the right hon. Baronet, that in order to carry put his own principle of not protecting any particular interests, he ought to tax rea1 property by descent in the same manner as, personal property had been taxed since 1758. He had for ten years been "hammering "that measure upon the House, with, he was sorry to say, but little effect. [" Laughter."] Hon. Members might laugh, but a nail was never struck without some good effect, and his suggestions might yet be followed. It should be remembered, that he proposed, in 1840, a tax upon real property by descent, as a substitute for the budget of the then Government, who proposed an addition of 5 per cent. duties on Excise and, Customs, and 10 per cent, on the assessed taxes as the most simple, mode of raising 2½ millions of revenue,—on that occasion, he took the sense of the House by a division, and only thirty-nine Members voted with him for the tax on real property. That plan of taxation of the late Government had entirely failed, and it was somewhat satisfactory to him (Mr. Hume) now to learn, and to have it admitted by the noble Lord lately the leader in this House, that he, to a certain extent, had come round to the justice of that tax, and, therefore, if the noble Lord and his party again came into office, they would be bound 1084 to adopt it in preference to an Income-tax. He pressed that fact on the right hon. Baronet as worthy of his attention. Whilst he regretted that the right hon. Baronet had not gone far enough in his tariff, he must at the same time admit, that so far as he had gone, he had proceeded, in the right way, and ought to be supported by every friend of free-trade. But could not the right hon. Baronet let the country have the good without the bad—the tariff reform, without the Income-tax? On the right hon. Baronet's own showing there was only 3,300,000l. deficient to, meet the expenditure of the country for the current year; let him therefore, reduce, what he could from the civil list, and what he could from the establishments of the army, the navy, the ordnance, and miscellaneous and colonial establishments to make up that deficiency — and even without that alternative let him put a duty on real property by descent, at the same rate as the duty on personal property, according to the calculations of the agriculturists, and supposing that duty to realise as much as the duty now imposed upon the descent of personal property, the right hon. Baronet would have fully the 3,300,000l.By an Income-tax, deducting the sources of employment generally, the right hon. Baronet would only add to the misery and distress which now pervaded the country, by depriving many men of the means of employment which they now had: and, he was sure, if the right hon. Baronet could see the proposition in the same injurious light as he (Mr. Hume) viewed it, he would not insist on that odius tax. The conduct of this country, with regard to the sugar and corn duties, was such, as to induce the rest of the world to believe that she was not sincere in her expressed desire to extend the commerce of the world. And why? Because she would not consent to the removal of those laws which prevented us from receiving corn, timber, and sugar, the produce of those states which they had to pay us for our goods. True it was, that America had no special right, as had been urged to complain in this matter, as she had now existing a fixed duty for 9s. per quarter imposed in all her ports against the corn of Canada. But, with a fixed duty in this country, bad as he thought even a fixed duty to be, still it would create a trade in corn, 1085 which never can be created with a sliding-scale, and extend the growth of good-fellowship, and to an increased exchange of the produce of both countries, from which alone could be expected the removal of the distress and difficulties which at present existed in both countries. He had felt himself called upon thus far to state his views upon this important question, although those views might be erroneous, yet they were sincere; and after the discussions which had taken place, he felt he ought not longer to, detain the House in the expression of his opinions upon the plans propounded and enforced by the right hon. Baronet. He would however promise him his best assistance in forwarding his tariff; but with regard to the Income-tax, he must tell the right hon. Baronet he could not give him a vote in its favour.
§ House in committee.
§ On clause 1 being proposed,
§ Mr. B. Wood
expressed a desire to ask a question of the right hon. Baronet at the head of her Majesty's Government, with reference to the operation of this clause and the schedules which formed a part of it. The schedules declared that a certain sum in every 20s. of income should be collected, from whatever source that income was derived; and he found no provision in the bill, the effect of which was to entitle a person to deduct the loss sustained in respect of one source of income from the gain derived from another source of income. He might better explain his meaning by putting a suppositious case, and he would suppose that a person under schedule A gained a profit from landed property, but that under schedule D he sustained a large loss by reason of trade speculations. As the bill stood, notwithstanding the reduction of his real income by losses under schedule D, he would yet have to pay the full amount of tax levyable in respect of his landed property under schedule A. The case of a farmer might be supposed, who was also engaged in mercantile business. By his farm he might gain 1,000l., but by trade he might lose 2,000l., and yet he would have to pay the Income-tax upon 1,000l., although he would in reality de-rive no benefit from the exertions of the year. In the case of a person whose income was small—so small as scarcely to exceed 150l., from whatever source it was derived, he was compelled to add together 1086 the various sums which he obtained from the various sources of gain, and so render himself chargeable with the tax. Thus, a man who derived 50l. from landed property, 50l. from funded property, and 50l. from his own exertions in a trade or profession, was to be compelled to pay a tax on the aggregate: but surely, if this was a fair principle, that to which he had before adverted, and which forbad the deduction of the loss under one schedule from the gain under another, could not be supported upon any ground of fairness or justice. He begged to inquire whether there was any disposition on the part of the Government to alter the provisions of the bill in this respect? The principle of deduction, to which he had alluded, was carried out with respect to mines, and he saw no reason why it should pot be extended further.
§ The Chancellor of the Exchequer
thought that the observations of the hon. Member would have fallen from him better at a time when the schedules were under discussion than at the present moment, but he had no difficulty in saying that the principle of the bill was that which the hon. Gentleman had stated, and that it was not intended to permit the loss under one schedule to be set off against the gain under another-. He would put this case. A gentleman was the owner of an estate, and farmed his own land. The probability was, that being a gentleman farmer, his speculations would produce a loss instead of a gain. But would the hon. Member contend that his loss in farming should be set off against the annual value of the land which he farmed, and which it would realise in the hands of another individual? He thought that to do so would be to sanction a great abuse, and to adopt a course which would not meet with general approbation. The hon. Member had stated the principle upon which the assessment of the tax upon, an income of 150l. derived from various sources, was founded perfectly correct, and he thought that the committee would agree with him that that was the fair principle.
§ Mr. B. Wood
said, the person who farmed his own land and sustained a loss by it, had no property which could be taxed under the bill. An hon. Friend behind him said, "Nonsense !" His hon. Friend was himself an excellent farmer, and was not likely to be in such a predi- 1087 cament: but be begged to tell the right hon. Baronet and the House that where a man was so nonsensical as to farm land at a loss, instead of letting it to an industrious clever farmer to cultivate it for him, he ought not to be taxed for a profit he did not realise. A man might be the owner of a ship, and be foolish enough to navigate it himself instead of employing a captain who was brought up to the service, and it surely would be most unfair to tax him for the profit he ought to have made. He would state an instance that had occurred to a Friend of his under the old Income-tax, and which he had mentioned to the House a few nights ago. His friend realised a profit of 25,000l. upon mines, but in the course of the year he lost 40.000l. by trade, and yet he was compelled to pay an Income-tax of 2,5001. upon the profit he had derived from his mines, being at the rate of 20 per cent., the two trades being charged under different schedules. Now if the matter was a fair and equitable one, why not include all these trades under one schedule. There was no occasion for a bill of 190 clauses, or for a bill that would reach from London to York; and he suggested that schedule A should be postponed or rejected.
begged to call the attention of the committee to the real question which was at present waiting for decision. That was, whether the blank in the bill, by which the date of the commencement of its operation should be declared, should be filled up with the words "5th day of April, 1842."
§ Mr. Blewitt
thought, that it was perfectly anomalous that they should be now, on the 25th of April, debating whether the bill should come into operation on the 5th of April.
§ Mr. B. Wood
had not yet received any answer to his question from the right hon. Baronet, to which he requested his attention,
§ The Chancellor of the Exchequer
pointed out that the operation of the bill was to be confined to three years. It was really matter of no importance at what time the operation of the bill commenced. It was more convenient that it should 1088 commence from the 5th of April, and he saw no reason for making any alteration in the bill in this respect. The bill for the alteration of the tariff would take effect from the date of its being passed. He begged to point out that the tariff was to be permanent in its effect, while the Income-tax was a merely temporary measure, which was to endure for three years only.
§ Viscount Howick
thought there could be no objection to the bill being made to commence on the 5th of April. Although the bill would take effect from that date, it was to be observed that the first payment was not to be made until the month of October.
§ Sir R. Peel
said, that the financial statements of the Minister of the Crown were always made with reference to the ordinary financial year, which commenced on the 5th April, and the bills introduced to carry out the' views embodied in those statements were drawn with a similar object. It was proposed that this measure should endure for three years, and whether it commenced in the month of July, 1842, and ended in July, 1845, or whether it commenced in April, 1842, and terminated in April, 1845, appeared to him to be quite immaterial. The object in naming the 5th of April as the day from which it should take effect was, that the ordinary financial arrangements should not be prejudiced. He begged to remind the House that if the Corn-bill had received the royal assent on that day, it would take effect immediately. But he really submitted to the House that it was not worth while to make any alteration in this bill upon the point referred to.
§ Question that the blank be filled up with the words "5th of April 1842" named, put and agreed to.
§ Mr. B. Wood
again pressed upon the right hon. Baronet the point to which he had first alluded, and in reference to which the right hon. Baronet had as yet afforded no explanation to the committee. He should feel himself called upon to divide the committee upon the subject, and as the same question would arise upon every schedule, he should oppose each one in turn. He, therefore, moved as an amendment, that this schedule be omitted.
§ Mr. G. Palmer
thought, that the question was hardly understood. It was, whether every person throughout the country should be called upon to pay the duty upon more than his bonâ fide income. He could not support a measure which would inflict such injustice as to impose the tax upon all income, and which did not confine it to that income which was in the nature of clear profit only.
§ Mr. F. T. Baring
thought, that the objection of the hon. Member for South-wark was entitled to great consideration, and that the discussion ought not to be terminated until such consideration was given to it. He did not ask for an immediate answer to that objection, because there might be some difficulty in making alterations in the bill to meet it, and he should, therefore, recommend that the hon. Gentleman should not divide now against the schedule, but that he should leave the question in the hands of the right hon. Baronet for the present: and that at the conclusion of the discussion, in the event of no alteration being proposed by the Government, he should move to bring up a clause to effect the remedy which was demanded.
§ The Chancellor of the Exchequer
said, the question was one of extreme difficulty and which required mature deliberation. That was a very considerable relaxation of the old law in the bill now before the House. Under the former Income-tax Act the proprietor of landed property, however small the amount, was compelled to pay the tax to the full extent of the income derived by him from such property, the only exception which was made being in favour of copyhold property. This, it would be observed, was altered. The mode of effecting the levy was also entirely different from that which formerly 1090 prevailed. He had already said, that this point was one of extreme difficulty; but he, of course, would give his best consideration to it. He would only add one observation with regard to what had fallen from the noble Lord opposite in reference to the period of payment of this tax. It was quite true that generally the tax would be payable for the first time on the 5th of October next. With regard to funded property, and the salaries of public officers, the course would be different; for as the income derivable from such sources was paid quarterly, so also would the tax be levied quarterly; the first quarterly payment being called for upon the first opportunity after the passing of the bill into a law.
§ Mr. Roebuck
said, the Chancellor of the Exchequer seemed to agree with the proposition of the hon. Member for Southwark, as far as incomes of 150l. a year were concerned. But the right hon. Gentleman said this—" You have got 100l. from land, therefore you shall pay 3l. upon that." But, says the party so taxed, "It is true I have got 100l. a-year on land, but I have lost on my trade. If you will not make any reduction on my trade loss, I tell you I have not 300l. a-year, but only 200l." "Oh," says the Chancellor of the Exchequer, "I do not care a farthing about that, the principle laid down is to tax the property of all." Now, he asked, was that principle in accordance with justice or common sense? He was quite sure that the right hon. the Chancellor of the Exchequer had no answer to give him. The simple principle of the right hon. Gentleman was this; adding up the whole proceeds of a man's income I find that he has not 150l. a-year, therefore he is exempt; but adding up all the proceeds of another man—whether there was loss in trade or not, I find he has 200l. a-year, and therefore let him pay. The principle of the right hon. Gentleman was, he has from land 150l. a-year, and he must get from other sources 100l. a-year, and therefore, I will charge him on another 150l. or 200l. Now, he wanted to know how that could be done.
§ Sir G. Clerk
was surprised to hear an objection made to charging fixed property to the fullest extent. If a party had 200l. a-year from fixed or funded property, he must pay duty on 200l. a-year. Many Gentlemen might choose to engage in trade for their own amusement, and might 1091 throw away a large portion of their property. He would take the case of a man possessed of 1,000l. a-year in land, who might choose to engage in speculations at New market, and incur great losses on horse-racing. He might spend a large portion of his income in a manner which pleased him; but that was no reason why his fixed property should not pay a full proportion to the exigencies of the State. If he made anything by these speculations, it would be added to his income, but if he suffered a loss by them, he was not to be exempted from payment of his proportion on his real and fixed property.
§ Viscount Howick
thought, that the answer of the hon. Baronet went much further to support the argument raised by the hon. Member for Southwark, and the irresistible justice of his claim, than anything which had yet been said. They were told, that every man should pay a certain percentage upon the amount of his income; and they, in answer, admitted it, but contended, that if a man lost, he was not entitled to reduction. The principle contended for, was admitted to a certain extent by the Members of her Majesty's Government, because they declared, that where a landowner had mortgaged his land, he should only pay for the income which he possessed after paying the interest on the mortgage. But if a man possessed of landed property, engaged in trade, which was necessary to the support of his family, and chanced to lose, he was to be taxed to the full amount of the income which he derived from that property. He thought, that the argument was irresistible in favour of the proposition that the payment should be called for only in respect of the sum which was left to him. The hon. Baronet said, that a man might go to New market and lose his money; and that, because such might be the case, a person losing his money by honest speculation was to be deemed equally disentitled to consideration. He really would not weary the committee by arguing a question which must be so plain to the common sense of every one as that there existed no possible analogy between the two cases. He trusted, that the House would not pass this bill unless the Government, in the course of its discussion in committee, would propose a clause by which the amount of the tax to be levied should be confined to that which was the real amount of available income. As he 1092 was speaking on this question, he would take the opportunity of making an observation in reference to the mode in which this bill was brought under the attention of the House, and he must say, that he thought the House had a right to complain that it had not been brought forward in a proper manner, and that it was produced in a state which involved needless difficulties to those who were compelled to wade through the 130 pages of which it was composed. He remembered that, when he had the honour to belong to the late Government, they had introduced a measure relating to the relief of the Irish poor; but, as the bill was of considerable length, they had thought it necessary to give the House all the assistance in their power by subjoining to it a carefully prepared abstract, which enabled hon. Members to arrive at the effect of its provisions with much less trouble than was required by this bill. He had read a great portion of this bill, and he had found that to arrive at even a moderate comprehension of its details, called for the exercise of a great deal of patience, and the loss of much time. The clauses were complicated, and difficult to comprehend; and he thought that, if possible, even now such an abstract should be furnished as he had suggested.
§ The Chancellor of the Exchequer
said, that everything had been done to enable the House to understand the measure as framed, and a copy of the old Income-tax Bill had been forwarded to every Member, in order that he might see in what particulars the proposed measure differed from it. He contended, that the different sorts of property from which income might be derived, should, of necessity, be set out in the bill, and that from the earliest period at which an Income-tax had ever been devised, schedules for such purposes had been found necessary, and the rule, as followed out in the present bill, was essential. As the duty applicable to different kinds of property was to be levied differently, separate schedules were absolutely required; but although the Government were anxious as far as possible to prevent injustice, he could only at present say that they were ready to take the subject into consideration, their object being to render this law as palatable, and as little oppressive as possible. Beyond this, he could give no assurance.
§ Mr. Hawes
could not understand the 1093 value of the promise of the right hon. Gentleman, for in his opinion, the right hon. Gentleman's statement amounted to literally nothing beyond the willingness of the Government to take the matter into consideration. Now, the point raised by the hon. Member for Southwark was one of very great importance. The question was, was this a bill to tax income, or was it not? By the bill, as it stood, it would appear that they were about to tax property, and not income; but was the course adopted just? Might not the whole matter be placed in a single schedule? All that was required was, that net income, no matter how arising, should be ascertained, and that on that the tax should be levied. The public cared not from what sources income was derived, or whether it was derived from one or from several sources. What they required was, that when the amount of income was ascertained, it should contribute its due proportion of the tax, and no more. That was a proposition very different from the one contained in this bill, and which, in his opinion, would operate to make some parties pay more than they ought to pay, and allow others to escape free.
§ The Chancellor of the Exchequer
said, the object of the Government was to tax all masses of property, and hence the necessity for several schedules. Schedule A applied to those who would come under the description of a property-tax, because the amount of the tax payable by the landlord or his mortgagee would be paid, not by the owner of the property, but by the occupying tenant, who would have no motive for deception or concealment. This was the preferable arrangement. What the hon. Gentleman proposed, would introduce the same uncertainty with regard to income derived from permanent property that must exist in the case of income resulting from trades and professions, as under schedule B. Now, it was this that involved the whole difficulty, because he feared that if they were to call for the amount derived from every source of income, they would be opening a door to frauds and evasions which would utterly defeat the object which the bill had in view.
§ Mr. Roebuck
contended, that the distinction made by the right hon. Gentleman was opposed to the doctrine which the right hon. Baronet had laid down. The right hon. Baronet had said, that his 1094 object was to tax income, whether derived from property or any other source, the same way, but this was not consistent with the statement of the right hon. Gentleman. The right hon. Gentleman distinguished between income resulting from property, and income arising by other means, and if they were really to have a property-tax, the better way would be to make that a separate measure, and dispose of it in the first instance. But would the right hon. Baronet stand by this distinction Would he separate the matter into two bills? Would he consent to bring in a bill for the purpose of taxing property alone, and another for the other part of the subject? He should like him to do this, for when they had dealt with the property-tax, they could proceed with the Income-tax.
§ Sir R. Peel
wished, in the first place, to observe, that the present bill was drawn up, and professed to be drawn up, on acts which existed during the war for the imposition of the Income-tax. The bill followed and dealt with the different descriptions of property which were specified in the act of 1806, and that act divided property into five different classes or schedules. It was apparent that this was done because the duty on property was levied in five different modes. By the first schedule, all lands, tenements, &c., were charged in respect of the property thereof. By the second, all lands, tenements, &c, were charged to the occupiers at one-half the rent. By the third, a charge was made upon all profits arising from annuities and dividends from the public funds or from other sources. By the fourth, a charge was made upon the annual profits or gains derived from professions, trades, employments, or vocations; and by the fifth, a charge was made on the salaries of all public officers, and upon all annuities, pensions, &c. Now, was it not obvious, that to obtain the amount of increase from each of these sources, they got it from different modes of levying. The question, however, before the committee, was different from this. It appeared, that it would be necessary to retain the schedules for the purpose of carrying out the tax. It was suggested, that as the tax was only proposed for a limited period, it would be well to make exceptions which did not exist before. He begged the committee to recollect, that it was not merely the practice for the three 1095 years during which it was proposed the tax should continue, but that a principle should be adopted which should be adhered to in case it should be necessary to have recourse to this tax again. What he maintained was, that in a desire to do justice in a particular case, they should take care that they did not open a door to fraud and evasion of the tax. He begged the House to remember it was not merely in the calculation of the loss of 3 per cent. for three years, but what would be the effect of an exception if the imposition of this tax should become necessary in time of war. If you hastily adopted exceptions, they might not be merely of a temporary but of an ulterior nature. This was all that he meant to assert. He admitted, that the statement of the hon. Gentleman carried with it a great appearance of justice, and that they should put the loss on one side against the gains on the other. This was apparently just. At the same time it was a matter of the utmost importance to consider, whether in attempting to meet this case, they did not offer opportunities for great frauds and injustice. The hon. Gentleman did not give the committee the exact nature of the proviso which he wished to have adopted, but at any rate this was not the time to adopt it. To reject the schedules as they now stood would be a most inconvenient mode of dealing with the subject. He believed, that the proper place to make the proposition would be when they arrived at pages 33 and 34 in the bill. They were now on the consideration of the mode of obtaining the incomes from lands, tenements, &c., but the proposition of the hon. Gentleman, which was something of an involved nature, could only admit of consideration at a later period. He begged the committee to remember, that if they departed from the principles of the act of 1806, they must look to a different mode of carrying out the bill. He could suppose many apparent individual cases of hardship, which if they attempted to deal with, they must make the most complete alteration in the former act. Suppose, for instance, the case of a gentleman of large landed properly; in assessing the tax, the reduction in the amount of income would be made through the tenant. But suppose the gentleman chose to indulge in some farming scheme of an extravagant nature himself, on a portion of his property—should they make a deduction from the income of the one part 1096 of the estate, in consequence of the loss on the other. Again, suppose a person was a large landed proprietor, and was also the owner of a West-Indian estate — would you make a deduction of the losses of the latter from the gains of the former? He was sure, that the House must be satisfied that his right hon. Friend and himself were bound not to give up powers under the act which would affect its operation. They, however, would consider whether they could not make exceptions, which would remove some grounds of complaint, but at the same time care must be taken, that they did not afford facility to fraud, and thus make the tax bear the heavier on certain classes. The hon. Gentleman had mentioned one individual case of hardship, and he confessed, that he should be happy to meet the case, if it could be done without affording facilities for fraud and evasion, when they came to the consideration of the proper clause. Either his right hon. Friend or himself would state the reasons which influenced them when they came to that clause, but to make or adopt any proposition in the schedules would be an inconvenient course. He was aware, that the hon. Member was not a gentleman of professional habits; it, therefore, would be too much to ask him to draw up a clause on the subject which would embody his views, but he should like the hon. Member to give notice of a motion on the subject, embodying his views,— showing on the one hand how he would afford relief, and on the other how he would prevent frauds. He trusted, that the committee would not assent to the present proposition.
§ Viscount Howick
thought, that the right hon. Gentleman could not be expected to say more than he had said. He agreed with the light hon. Gentleman, that if they kept the bill at all, it was necessary to maintain these schedules, for if they did not they might make the bill much more oppressive, in consequence of its inequality. He must protest against calling upon the hon. Member for Southwark to draw up a clause in the bill like the present, for it would require that professional assistance which alone her Majesty's Government could obtain. The right hon. Baronet opposite had promised to take the subject into his consideration, and he therefore trusted, that the hon. Member for Southwark would not press the subject further at present.
§ Sir R. Peel
remarked, that all that he asked from the hon. Member for Southwark, was the general terms of his motion, and he would relieve him from the trouble of putting the clause in form. The hon. Member might do this in very general terms.
§ Mr. B. Wood
said, that his object on the present occasion was to draw attention to the subject, and he confessed, that he had expected the right hon. Baronet would have made a voluntary offer to meet the difficulty which he had pointed out. His object, however, had been obtained, as the attention of the House and the Government had been directed to the subject. He wished to throw no impediment in the way of the bill by the proposition which he had made. He thought, that the right hon. Baronet might at once promise to draw up a clause on the subject. He asked for nothing but justice, and he would not countenance any fraud on the subject, and none could be committed if the case was properly met. All that he wished was, that no man should be called upon to pay more than the tax on his real income, and it was no matter, in his estimation, under what schedule he derived it. The right hon. Baronet also seemed to say, that they were now establishing a proposition for a tax which might last for more than three years, and that, therefore, it would not do to depart from the old Income-tax. It should be recollected, that the former tax passed at a period of great excitement, when money might have been wanted at a most pressing emergency, and that, therefore, there was a necessity of passing the bill with as little delay as possible. There was no necessity at present why they should not act in this case with the greatest deliberation and attention to the matter in all its bearings. He confessed, that in carrying out the suggestion which he had made, he relied more on the good feeling of the right hon. Baronet, than on his words that night.
§ Sir R. Peel
had not said or intimated that there was any intention of continuing the Income-tax beyond three years.
§ Sir R. Peel
was not aware of that; but, perhaps, the hon. Gentleman supposed that the tax might become so popular that the public would prefer it, in contradistinction to other taxes, He, however, had 1098 given no opinion whatever as to the probable continuance of the Income-tax beyond three years. With respect to the proposition of the hon. Gentleman, he could only say, that when he made a promise, he intended to adhere to it; and he had, therefore, not said more than that he would take that matter into his consideration. He intended to adhere to the main principles of the act of 1806, and he would consider with his right hon. Friend whether a clause could not be drawn to meet the case stated by the hon. Gentleman, and analogous cases, which, at the same time, would not open the door to fraud and evasion. He would give the hon. Gentleman due notice of his intention: and if he was dissatisfied, he could, at a subsequent stage of the bill, take the sense of the House. He hoped, however, that the hon. Member would draw up his case in general terms.
Sir W. James
called the attention of the committee to the effect that would arise from the mode of calculating the profits in a case where an individual carried on two pursuits under the one schedule. He agreed in the abstract justice of the suggestions of hon. Gentlemen opposite, but he thought that every one must perceive the difficulty of carrying them into effect; and the right hon. Baronet had only acted with fairness and justice in calling on hon. Members opposite to show that those suggestions could be carried into effect without injuring the machinery of the bill.
§ Mr. Wallace
did not see why a man should pay for more than his income, and it appeared quite immaterial to him, if they took the whole amount, from what source it was derived.
§ Blank filled up with 7d.
Schedule B. was proposed.
For all lands, tenements, and hereditaments in England, there shall be charged yearly in respect of the occupation thereof, for every twenty shillings, of the annual value thereof, the sum of
§ The question put was, that the blank be filled up with the words "threepence halfpenny."
§ Viscount Howick
said, that it appeared to him that by the operation of one part of the schedule great injustice was inflicted upon a certain portion of persons con- 1099 nected with the landed interest. In the first place, a charge was levied on the landlord. In the next place, it was proposed that the tenant should be taxed in his income with every other person deriving income from trade or profession. But, then, in the case of a tenant, an arbitrary rule was introduced for estimating the profit of the farmer. A rule was arbitrarily laid down, which did not apply to any trade, and in many cases it would be found in its operation very wide from the truth. If any Gentleman connected with the agriculture of the south of Scotland or the north of England were present, he trusted that they would join in making a stand against the adoption of any such rule. It was notorious, that rent was paid after the deduction of the amount of profit on the capital employed, and of the expenses of cultivation. When the farms were large, there would be an apparent income to tax; but when they were divided, they would escape from the operation of the tax altogether. In the county which he had lately the honour to represent all the farms were large, and the greatest skill and intelligence were manifested in their cultivation. Undoubtedly apparent large rents were paid to the landlords, but this arose from the circumstance of the size of the farms and the capital which had been laid out in their improvement. Now, he would take a farm in his neighbourhood, paying 900l. a-year rent, and he knew many farms paying that amount of rent, and even much larger sums, to the landlords, and those farms in the north of England paying 300l. a-year each. In the first case, you would assume an arbitrary profit to the amount of 450l. a-year, and would tax him accordingly, while, in the latter, you would derive no income at all. He could not help feeling that the tendency of the present rule would be to impede, if not to prevent, an improved cultivation. This, he contended, would be the necessary effect of this clause. He called, therefore, upon those who professed to be such strong advocates for the agricultural interest, and who promised to make such a great fight against any alteration of the Corn-laws, to come forward and prevent the infliction of what he must consider to be a great act of injustice. It appeared to him, that it would be desirable to strike out schedule B, and to insert the farmers among the traders in schedule C. He was sure, that odious as the tax was to the farmers 1100 in the county with which he was connected, they would rather pay the tax upon profits, with other traders, than submit to the arbitrary rule laid down in this bill of a fixed tax on rent. One article of farming produce was treated with especial favour as an article of trade, and why not other articles?
§ The Chancellor of the Exchequer
said, that whatever difficulties existed in this bill were only copies of those in the former act, and certainly of all the parts of the old Income-tax that which was least complained of was the mode in which the farmers were assessed. The principle adopted was considered the best calculated to arrive at a fair and correct result.
§ Lord Worsley,
much as he objected to the tax, must confess that the farmers he was acquainted with would rather have their proportion of it assessed upon their rent, than to have to submit to the inquisition necessary to imposing a tax on their profits, which naturally depended on many varying circumstances.
§ Blank filled up with 3½ The next blank, respecting the tax on lands, &c. in Scotland, was filled up with 21½. The schedule B was ordered to stand part of the bill.
§ On the proposal of schedule C, imposing 7d. in the pound, without deduction, on all profits arising from annuities, dividends, and shares of annuities, payable out of any public revenue, Mr. Baring asked whether it was proposed to tax foreigners holding property in our funds?
§ Mr. Baring
said, he should call the attention of the House to the subject before they went out of committee. He thought the national faith was involved in the question.
§ On the question that the blank be filled up with the "seven-pence",
§ Mr. Ricardo
rose to propose the amendments of which he had given notice, having for their object to proportion the taxation upon terminable and life annuities according to the scale set forth in the tables as follows:—In Schedule C, after the word 'deduction,' to insert 'save and except all such annuities payable out of any public revenue as shall have been granted or may hereafter be granted for definite periods of time, or limited terms of years, upon all which last described annuities there shall be charged the several sums set forth in the following table; that is to say—when the price of the 3 per cent. per annum Reduced Bank Annuities, as notified by the commissioners for the reduction of the national debt, for the purposes of an act passed in the 10th year of the reign of his Majesty king George IV., cap. 24, if the same is determinable in a period computed from the day of assessment,
Shall be 80 per cent. and under, then for every 20s. of term annunity, if above 80 per cent., & under 86 per cent. YEARS. d. YEARS. d. Under 2 ½ Under 2 ½ From 2 to 4 1 From 2 to 4 1 — 4 to 6 1½ — 4 to 6 1½ — 6 to 9 2 — 6 to 9 2 — 9 to 12 2½ — 9 to 12 2½ — 12 to 15 3 — 12 to 16 3 — 15 to 18 3½ — 16 to 19 3½ — 18 to 22 4 — 19 to 24 4 — 22 to 27 4½ — 24 to 29 4½ — 27 to 33 5 — 29 to 36 5 — 33 to 41 5½ — 36 to 44 5½ — 41 to 52 6 — 44 to 56 6 — 52 to 70 6½ — 56 to 75 6½ — 70 7 — 75 7 If 86 per cent., and under 93. If 93 per cent., and above. Years. d. Years. d. Under 2 ½ Under 2 ½ From 2 to 4 1 From 2 to 5 1 — 4 to 7 1½ — 5 to 8 1½ — 7 to 10 2 — 8 to 11 2 — 10 to 13 2½ — 11 to 14 2½ — 13 to 17 3 — 14 to 18 3 — 17 to 21 3½ — 18 to 23 3½ — 21 to 26 4 — 23 to 28 4 — 26 to 31 4½ — 28 to 34 4½ — 31 to 38 5 — 34 to 42 5 — 38 to 47 5½ — 42 to 51 5½ — 47 to 60 6 — 51 to 65 6 — 60 to 81 6½ — 65 to 88 6½ — 7 — 88 7And save and except all such annuities payable out of any public revenue as shall have been granted, or may hereafter be 1102 granted, upon lives, upon all of which last described annuities there shall be charged the several sums set forth as follows, viz.:— When the price of the 3 per cent, per annum Reduced Bank Annuities as notified by the commissioners for the reduction of the national debt, for the purposes of an act passed in the 10th George 4th, cap. 24, shall be 80 per cent. and under, then for every 20s. of life annuity, if the party during whose life the annuity is payable and of age on the day of assessment, there shall be charged—
MALES. FEMALES. Years. d. Years. d. From 15 to 30 5 From 15 to 24 5½ — 30 to 41 4½ — 24 to 38 5 — 41 to 48 4 — 38 to 48 4½ — 48 to 55 3½ — 48 to 54 4 — 55 to 62 3 — 54 to 60 3½ — 62 to 68 2½ — 60 to 66 3 — 68 to 74 2 — 66 to 71 2½ — 74 to 80 1½ — 71 to 77 2 — 80 to 87 1 — 77 to 85 1½ — 87 0½ — 85 to 91 1 — 91 0½When the price of the 3 per cents. shall be above 80 and under 86 per cent. then for every 20s. of life annuity:—
MALES. FEMALES. Years. d. Years. d. From 15 to 25 5 From l5 to 20 5 — 25 to 38 4½ — 20 to 34 5½ — 38 to 46 4 — 34 to 45 4½ — 46 to 53 3½ — 45 to 53 4 — 53 to 60 3 — 53 to 59 3½ — 60 to 66 2½ — 59 to 64 3 — 66 to 73 2 — 64 to 70 2½ — 73 to 80 1½ — 70 to 76 2 — 80 to 87 1 — 76 to 84 1½ — 87 0½ — 84 to 91 1 — 91 0½When the price of the 3 per cent. per annum Reduced Bank Annuities shall be 86 per cent. and under 93 per cent., then for every 20s. of life annuity, if the party during whose life the annuity is payable, and of an age on the day of assessment, there shall be charged—
MALES. FEMALES. Years. d. Years. d. From 15 to 19 5 From 15 to 30 5 — 19 to 35 4½ — 30 to 42 4½ — 35 to 44 4 — 42 to 50 4 — 44 to 51 3½ — 50 to 57 3½ — 51 to 58 3 — 57 to 63 3 — 58 to 65 2½ — 63 to 69 2½ — 65 to 72 2 — 69 to 75 2 — 72 to 79 1½ — 75 to 83 1½ — 79 to 86 1 — 83 to 91 1 — 86 0½ — 91 0½When the price shall be 93 per cent. and above, then for every 20s. of life annuity, if the party during whose life the annuity is payable, and of an age on the day of assessment, there shall be charged—1103
MALE. FEMALE. Years. d. Years. d. 15 5 From 15 to 25 5 From 15 to 31 4½ — 25 to 38 4½ — 31 to 41 4 — 38 to 48 4 — 41 to 49 3½ — 48 to 55 3½ — 49 to 56 3 — 55 to 61 3 — 56 to 63 2½ — 61 to 67 2½ — 63 to 70 2 — 67 to 74 2 — 70 to 78 1½ — 74 to 82 1½ — 78 to 85 1 — 82 to 90 1 — 85 to — 0½ — 90 to — 9½And for all purposes of this act any term or life annuity chargeable with a duty of 3l. 7s. 6d. shall be estimated as an income of 150l. per annum.The hon. Gentleman said, that the right hon. the Chancellor of the Exchequer had said last year that if the debt had been diminished no credit was due to the late Government, but to those who had adopted the system of terminable annuities. It should, however, be remembered, that though this might have been used as a sinking fund for the diminution of the debt, the charge to the country was increased. If terminable annuities were made at twelve years' purchase, at the end of ten years they would be worth only two years' purchase, and the right hon. Gentleman took as credit the difference from twelve years to two. Did not the right hon. Gentleman himself admit that terminable annuities were but the repayments of principal, and would he now turn round upon the holders and pronounce them income? If this tax pressed heavily upon terminable annuities, it fell with equal weight upon life annuities. If an old man of eighty exchanged a permanent annuity of 36l. a year for a life annuity of 259l., the proposed measure would reduce the amount to 252l. Now, he asked, would the Government continue to issue a paper of this kind, promising 259l., when they only gave 252l.? In taxing these life and terminable annuities they were about to commit an injustice by means of the trust which had been reposed in their credit and good faith; and he called upon them to abstain from it, not because the injury would affect large and wealthy institutions, but thousands of individuals who were placed at their mercy. He could not understand the argument for refusing redress of injustice on account of the inconvenience and trouble it would cost. If they adopted that sort of arm-chair legislation there would be no end to the injury they would inflict upon the public. Why not confiscate 3,000,000l. of the 1104 most accessible property at once. It would be a more simple proceeding, and very little more unjust or arbitrary. The assessment of terminable annuities was a breach of faith defensible by no argument, and only depending on an arbitrary will backed by a large majority. The hon. Gentleman proposed his amendment.
§ The Chancellor of the Exchequer
had not expected that the hon. Gentleman would have moved his amendment on this part of the bill. He thought the proposition now made went on grounds that were entirely erroneous. He did not admit with the hon. Gentleman that the measure proposed by Government would be a breach of the contract entered into with the annuitants at the time when the annuities were granted, or that it was one which they were not fully prepared to expect would be made when the public necessities required it. The hon. Gentleman had stated that the case was entirely without precedent, but he was decidedly wrong, for on all the several occasions on which an income or property-tax had been formerly imposed, no distinction had been made between the holder of a public annuity which was to continue for ever, and the holder of a public annuity which was to last for the shortest period. The question had come before the House on the first discussion of the Income-tax. There were then annuities outstanding as at present, long annuities and life annuities, but in neither of those cases did the House think there was any ground for exempting the holders from taxation, and he hoped that no such precedent would now be established. The whole difficulty of the question and the force of the argument used by the hon. Gentleman arose from the circumstance of this being a temporary tax, imposed for a limited period. The hon. Gentleman could not deny, if the Income-tax were to be perpetual, that there would be no injustice whatever in taking the same amount from the annuitant for a term of years as from the man who held a permanent income; for, though during the years for which his annuity lasted, the former might pay a large amount, yet, the tax would fall more heavily, in the end, on the permanent annuity. Thus, an annuitant receiving 10 per cent. for ten consecutive years, would not have paid so much to the Government at the end of forty years as one who received 3 per cent. during that period. Had the imposition of the Income-tax, he would ask, caused a fall in the value of 1105 those annuities which the hon.' Gentleman said were to be so seriously taxed? He had made specific inquiries as to what had been the effect on the market price of annuities in the city consequent on the declaration that it was not intended to exempt them from the charge. He would have brought with him a document containing a statement of the precise facts had he known that this amendment would now have been brought forward. He found that the rise in the price of annuities had been equivalent to the rise which had taken place in the other funded property of the country. If, therefore, these annuitants, who felt themselves so grievously affected by the present measure, wished to relieve themselves from all possible inconvenience they had the opportunity of converting the stock into another species of funded property, and placing themselves in the pleasant situation, as the hon. Gentleman seemed to think it, of holding a permanent annuity. He knew that some of the men most skilful in monetary concerns in this country had, within a very few days, made many large purchases of these annuities, notwithstanding all the impending danger of which the hon. Gentleman spoke. The right hon. Gentleman opposite stated, on a former occasion, the extreme difficulty they would have if they made a distinction in the amount of taxation according to the duration of incomes in the hands of individuals. The larger proportion of annuities were not of a permanent character, as was the case, for instance, with the holder of an estate who possessed but a life interest in it. It was certainly a dangerous principle to say that the amount of tax should be proportioned to the duration of the income, for on the same grounds as those put forward by the hon. Gentleman the holders of life incomes derived from professions and other sources might also lay claim to exemption.
§ Mr. Ricardo
observed, that the actual price of annuities in the market was equal to somewhat under 70 Consols.
§ The Chancellor of the Exchequer
said, he had spoken of the comparative rise in the prices of annuities and other species of funded property. Taking the price of the funds previous to the announcement of the property-tax and the price of annuities, and taking both at the present time, it would be found that the rise in the price of each description of stock was about equal.
Mr. V. Smith
observed, that all the 1106 right hon. Gentleman (the Chancellor of the Exchequer) appeared to be able to urge against the amendment of the hon. Member was, that he was totally unprepared to find him bringing it forward at that stage of the bill. That at the best was a very lame excuse, but even bad as it was it could not be accepted, for the hon. Member had given notice of his intention to move his amendment at precisely that part of the bill, and at the very word at which he had proposed it to be inserted, namely, in line 3 of Schedule C, so that if the right hon. Gentleman had had any documents to produce, whereby he would have refuted the arguments of the hon. Member, he had had ample time for their production. The right hon. Gentleman, however, had refused to modify the clause by agreeing to the introduction of the amendment, and his only reason for refusing to do so was, because it was impossible to avoid committing a certain amount of injustice by the bill, and it was impossible to remedy this evil in all the instances in which it could be shown to exist, therefore he would not do it in the present case. The terms upon which the bargain was struck with the present holders of terminable annuities, were such as ought, in equity, to exempt their holders from being subjected to the same tax as that imposed on permanent annuities, for by the arrangement made there would be 4,000,000l. of interest on the national debt cancelled at the expiration of fourteen years, whereas had the terminable annuitants retained their former position as holders of dividends they would have escaped a very large portion of the tax which it was now proposed to impose on them. The right hon. Gentleman had asserted that the proposed tax had not lowered the price in the market of terminable annuities, but this had been denied; and moreover, if true, it was no proof of the justice of the tax, for the steadiness of the quotations might have been maintained by a belief that the Government would not persevere in carrying this part of the bill into effect when the gross injustice of it should have been pointed out. He sincerely trusted the hon. Member would take the sense of the House upon his amendment.
§ Viscount Howick
admitted there would be great difficulty in apportioning taxation to the previous expectation of the parties; but he thought his hon. Friend had succeeded in showing that special grounds 1107 existed in this case. After inducing possessors of permanent annuities to exchange them for terminable annuities, in order to diminish the public debt, it would be contrary to all sense of justice now to impose upon them additional taxes.
§ Mr. Philip Howard
had opposed as inexpedient, and as not justified by present necessity, the imposition of an Income-tax, but the House having otherwise decided, he could not think a system of exemptions either just or politic. It was impossible in practice to draw nice distinctions without creating grievances greater than those which it was sought to remedy If the Income-tax were unequal in its pressure, if not extended with searching severity to all, the House would become involved in an interminable labyrinth of inconsistencies. Hon. Members might oppose the principle of the measure, but to the details of that which was submitted by her Majesty's Government, he did not see any well founded objection.
§ The committee divided on the question that words proposed by Mr. Ricardo be added: — Ayes 117; Noes 253: — Majority 136.
|List of the AYES.|
|Aldam, W.||Gill, T.|
|Armstrong, Sir A.||Granger, T. C.|
|Attwood, M.||Guest, Sir J.|
|Baring, rt. hn. F. T.||Hall, Sir B.|
|Bell, J.||Harris, J. Q.|
|Berkeley, hon. Capt.||Hastie, A.|
|Bernal, R.||Hawes, B.|
|Bernal, Capt.||Hay, Sir A. L.|
|Blewitt, R. J.||Heathcote, J.|
|Bowring, Dr.||Heneage, E.|
|Brotherton, J.||Hill, Lord M.|
|Browne, hon. W.||Hobhouse, rt. hn. Sir J.|
|Christie, W. D.||Howard, hn. C. W. G.|
|Clements, Visct.||Howick, Visct.|
|Cobden, R.||Hume, J.|
|Colborne, hn. W. N. R.||Hutt, W.|
|Colbrooke, Sir T. E.||James, W.|
|Collins, W.||Jardine, W.|
|Craig, W. G.||Jervis, J.|
|Crawford, W. S.||Leader, J. T.|
|Dalrymple, Capt.||Listowel, Earl of|
|Dashwood, G. H.||M'Taggart, Sir J.|
|Dennistoun, J.||Marjoribanks, S.|
|Duke, Sir J.||Martin, J.|
|Duncan, Visct.||Maule, rt. hn. F.|
|Duncan, G.||Mitcalfe, H.|
|Duncombe, T.||Mitchell, T. A.|
|Dundas, Admiral||Morris, D.|
|Dundas, F.||Morrison, General|
|Ellice, rt. hn. E.||Mostyn, hn. E. M. L.|
|Evans, W.||Murphy, F. S.|
|Forster, M.||Murray, A.|
|Fox, C. R.||Napier, Sir C.|
|Gibson, T. M.||Norreys, Sir D. J.|
|O'Brien, C.||Stuart, Lord J.|
|O'Brien, J.||Strutt, E.|
|O'Brien, W. S.||Tancred, H.W.|
|O'Connell, M. J.||Thornely, T.|
|O'Connell, J.||Tollemache, hn. F. J.|
|Ogle, S. C. H.||Towneley, J.|
|Parker, J.||Tufnell, H.|
|Pechell, Capt.||Turner, E.|
|Philips, M.||Villiers, hon. C.|
|Plumridge, Capt.||Vivian, hon. Major|
|Ponsonby, hon. C. F. A. C.||Vivian, hon. Capt.|
|Power, J.||Wallace, R.|
|Rice, E. R.||Ward, H. G.|
|Roche, E. B.||Watson, W. H.|
|Roebuck, J. A.||Wawn, J. T.|
|Rundle, J.||Williams, W.|
|Rutherford, A.||Wilshere, W.|
|Scholefield, J.||Winnington, Sir T. E.|
|Seymour, Lord||Wood, B.|
|Sheil, rt. hn. R. L.||Worsley, Lord|
|Smith, B.||Wrightson, W. B.|
|Somerville, Sir W. M||Yorke, H. R.|
|Stanley, hon, W. O.||TELLERS.|
|Stansfield, W. R. C.||Ricardo, J. L.|
|Stanton, W. H.||Smith V.|
|List of the NOES.|
|A'Court, Captain||Broadwood, H.|
|Ackkers, J.||Brooke, Sir A. B.|
|Acton, Col.||Bruen, Col.|
|Adare, Visct.||Buck, L. W.|
|Adderley, C. B.||Buckley, E.|
|Ainsworth, P.||Buller, Sir J. Y.|
|Alford, Visct.||Bunbury, T.|
|Antrobus, E.||Burrell, Sir C. M.|
|Arbuthnott, hon. H.||Burroughes, H. N.|
|Archdall, Capt.||Campbell, Sir H.|
|Arkwright, G.||Campbell, A.|
|Astell, W.||Cardwell, E.|
|Bagot, hon. W.||Carnegie, hon. Capt.|
|Bailey, J.||Chapman, A.|
|Bailey, J.jun.||Chelsea, Visct.|
|Baillie, Col.||Chetwode, Sir J.|
|Baird, W.||Christmas, W.|
|Baldwin, B.||Christopher, R. A.|
|Balfour, J. M.||Chute, W. L. W.|
|Baring, hon. W. B.||Clayton. R. R.|
|Barrington, Visct.||Clements, H. J.|
|Baskerville, T. B.M||Clerk, Sir G.|
|Bateson, Sir R.||Clive, hon. R. H.|
|Beckett, W.||Cochrane, A.|
|Bell, M.||Codrington, C. W.|
|Bentinck, Lord G.||Collett, W. R.|
|Beresford, Capt.||Colvile, C. R.|
|Beresford, Major||Conolly, Col.|
|Bernard, Visct.||Corry, rt. hn. H.|
|Blackburne, J.||Courtenay, Visct.|
|Blake, M. J.||Cripps, W.|
|Blakemore, R.||Darby, G.|
|Bodkin, W. H.||Dawnay, hon. W. H.|
|Boldero, H. G.||Denison, E. B.|
|Borthwick, P.||Dickinson, F. H.|
|Botfield, B.||Dodd, G.|
|Bradshaw, J.||Douglas, Sir H.|
|Bramston, T. W.||Douglas, Sir C. E.|
|Broadley, H.||Douglas, J. D. S.|
|Douro, Marquess of||Kerrison, Sir E.|
|Drummond, H. H.||Kirk, P.|
|Duffield, T.||Knatchbull, rt. hn.|
|Dugdale, W. S. Sir E.|
|Duncombe, hon. A.||Knight, H.|
|East, J. B.||Lascelles, hon. W. S.|
|Eaton, R. J.||Law, hon. C. E.|
|Egerton, Sir P.||Lawson, A.|
|Egerton, Lord F.||Legh, G. C.|
|Eliot, Lord||Liddell, hon. II. T.|
|Estcourt, T. G. B.||Lincoln, Earl of|
|Farnham, E. B.||Lockhart, W.|
|Fellowes, E.||Lowther, hon. Col.|
|Ferguson, Sir R. A,||Lyall, G.|
|Feilden, W.||Mackenzie, T.|
|Filmer, Sir E.||Mackenzie, W. F.|
|Fitzroy, Capt.||Mackinnon, W. A.|
|Fitzroy, hon. H.||Maclean, D.|
|Forbes, W.||M'Geachy, F. A,|
|Forester, hon. G. C. W.||Mainwaring, T.|
|Fuller, A. E.||Marsham, Visct.|
|Gladstone, rt. hn. W. E.||Martyn, C. W.|
|Gaskell, J. Milnes||Martyn, C. C.|
|Gordon, hon. Capt.||Marton, G.|
|Gore, W. O.||Master, T. W. C.|
|Gore, W. R. O.||Masterman, J.|
|Goring, C.||Meynell, Capt.|
|Goulburn, rt. hn. H.||Miles, P. W. S.|
|Graham, rt. hn. Sir J.||Miles, W.|
|Granby, Marquess of||Milnes, R. M.|
|Grimston, Visct.||Mordaunt, Sir J.|
|Grogan, E.||Morgan, O.|
|Hale, R. B.||Mundy, E. M.|
|Halford, H.||Murray, C. R, S.|
|Hamilton, C. J. B.||Neeld, J.|
|Hamilton, W. J.||Neville, R.|
|Hamilton, Lord C.||Newry, Visct.|
|Hampden, R.||Nicholl, rt. hn. J.|
|Hanmer, Sir J.||Norreys, Lord|
|Hardinge, rt. hn. Sir H.||O'Brien, A. S.|
|Hardy, J.||Packe, C. W.|
|Hawkes, T.||Paget, Lord W.|
|Hayes, Sir E.||Pakington, J. S.|
|Heneage, G. H: W.||Palmer, R.|
|Henley, J. W.||Palmer, G.|
|Hepburn, Sir T. B.||Patten, J. W.|
|Herbert, hon. S.||Peel, rt. hn. Sir R.|
|Hodgson, F.||Peel, J.|
|Hodgson, R.||Planta, rt. hn. J.|
|Hogg, J. W.||Plumptre, J. P.|
|Holmes, hn. W. A'Ct||Polhill, F.|
|Hope, hon. C.||Pollington, Visct.|
|Hornby, J.||Pollock, Sir F.|
|Howard, hn. E. G. G.||Powell, Col.|
|Howard, P. H.||Praed, W. T.|
|Ingestre, Visct.||Pringle, A.|
|Inglis, Sir R. H.||Pusey, P.|
|Irton, S.||Rashleigh, W.|
|Jackson, J. D.||Reade, W. M.|
|James, Sir W. C.||Reid, Sir J. R.|
|Jermyn, Earl||Repton, G. W. J.|
|Johnson, W. G.||Richards, R.|
|Johnstone, H.||Rolleston, Col.|
|Joliffe, Sir W. G.||Round, J.|
|Jones, Capt.||Rushbrooke, Col.|
|Kelburne, Visct.||Ryder, hon. G. D.|
|Kemble, H.||Sandon, Visct.|
|Scarlett, hon. R. C.||Trevor, hon. G. R.|
|Scott, hon. F.||Trotter, J.|
|Seymour, Sir H. B.||Tumor, C.|
|Sheppard, T.||Vere, Sir C. B.|
|Shirley, E. J.||Verner, Col.|
|Shirley, E. P.||Vernon, G. H.|
|Sibthorp, Col.||Vivian, J. E.|
|Smith, A.||Walsh, Sir J. B.|
|Smollett, A.||Welby, G. E.|
|Somerset, Lord G.||Wilbraham, hon. R.B.|
|Somerton, Visct.||Williams, T. P.|
|Sotheron, T. H. S.||Wodehouse, E.|
|Stanley, Lord||Wood, Col.|
|Stewart, J.||Wood, Col. T.|
|Stuart, H.||Wortley, hon. J. S.|
|Sturt, H. C.||Wyndham, Col. C.|
|Sutton, hon. H. M.||Wynn, rt. hn. C. W.W.|
|Talbot, C. R. M.||Yorke, hon. E. T.|
|Tennent, J. E,||Young, J.|
|Thompson, Mr. AId.||TELLERS.|
|Tomline, G.||Baring, H. B.|
|Trench, Sir F. W.||Fremantle, Sir F. T.|
§ House resumed. The Chairman reported progress. Committee to sit again.
§ House adjourned.