Democracy and Liberty. William Edward Hartpole Lecky

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СКАЧАТЬ the burden falling on the people. If I were to define a good system of taxation, it should be that of bearing lightly on an infinite number of points, heavily on none. In other words, that simplicity in taxation is the greatest additional weight that can be given to taxes, and ought in every country to be most sedulously avoided.’ ‘That opinion,’ said Sir Cornewall Lewis, ‘though contrary to much that we hear at the present day, seems to me to be full of wisdom, and to be a most useful practical guide in the arrangement of a system of taxation.’⁸

These remarks of Sir Cornewall Lewis were much censured at the time; but I believe that many of our best contemporary thinkers will agree with me that they contain much truth, and that the concentration of taxation into a very few forms has been carried in England to an exaggerated extent. In times when prosperity is rapidly advancing and when taxation is easily borne the evil may be little felt; but in times of receding prosperity it is of no small advantage that the burden of taxation should be diffused in many forms and over a wide area. As it is much easier in times of adversity to raise than to impose a duty, it is often wiser in times of prosperity to lower than to abolish it. Low duties on articles of general consumption, showing themselves in a slightly enhanced price, pass almost unnoticed, and usually cause far less friction and discomfort than direct taxes. They are very equitable, for they are strictly proportioned to consumption or enjoyment; and this system of taxation makes it easy for the taxpayer, according to his improving or declining means, to vary his taxation by varying his consumption, while it secures that some portion of the national burden shall be diffused over a wide area. An excellent writer on this subject has truly said: ‘If only our fiscal burdens are equitably apportioned, and so contrived as neither to fetter industry nor to repress enterprise, that mode of levying them must be the best which is the least unpleasant and the least felt;’ and the same writer gives good ground for believing that there is much exaggeration, and even positive error, in the popular notion that the cost of collecting indirect taxes is greater than that of collecting direct ones.⁹ Two other considerations must also be remembered. One is, that the remission of a direct tax is usually felt to its full extent by the whole body of taxpayers affected, while a wholly disproportionate amount of the benefit arising from the remission of a duty is in most cases intercepted by middlemen. The other is, that the remission of a direct tax is usually an unmixed benefit, while the remission of an indirect tax, by stimulating competition, often produces acute suffering to particular classes. Thus, to give a single example, the kelp manufacture, on which the poorest inhabitants of the most barren coast-lands in Scotland and Ireland are largely supported, was for many years wholly dependent for its existence on a tax which was imposed on Spanish barilla.

I do not intend by these remarks to dispute the immense advantages which England has derived from her Free-trade legislation. This legislation has vastly stimulated both production and consumption; it has lightened many burdens; and in many cases the Treasury has derived a far greater revenue from a low duty than it had ever received from a high one. But the political evil of narrowing the basis of taxation is a real one, and, even in its purely economical aspects, the reaction against the abuses of the old fiscal system seems to have been carried too far. It is not probable that a single loaf of bread was made the cheaper by the abolition, in 1869, of the shilling registration duty on corn, though that small duty at the time it was repealed by Mr. Lowe brought more than 900,000l. into the national exchequer, and would, probably, at the present day have brought in double that sum. Not one Londoner in a hundred even knew of the existence of the small duty on coal which was abolished in the present generation. It had existed in one form or another for more than six hundred years, and was almost the oldest of our taxes. It furnished an income of more than 500,000l. a year, raised without complaint, for the purpose of effecting metropolitan improvements; and there is no reason to believe that any human being, except a few rich coalowners and middlemen, derived any benefit from its abolition.¹⁰

      We have a striking instance—though it was not of a democratic character—of the manner in which changes in taxation may be made use of for electioneering purposes in the conduct of Mr. Gladstone in making the abolition of the income-tax his election-cry at the general election of 1874. The circumstances of this election may be briefly told. Mr. Gladstone was not obliged to go to the country. In spite of his defeat on the Irish University question in the preceding year, he had still a considerable and unbroken majority, though several defeats at bye-elections showed clearly that his power was declining, and especially that the upper and middle classes, who were the payers of income-tax, were profoundly shaken in their allegiance to him. The income-tax-payers, it is true, were not even then an absolute majority of the electors, but they formed a much larger proportion than after the Reform Bill of 1885. They included the great majority of the voters who could influence other voters; and they were a body so large and so powerful that there was no reasonable doubt that a general movement among them would decide the fate of the election. The fortune of the ministry was tolerably certain to turn upon the question whether the defection in this notoriously wavering class could be arrested.

      It was under these circumstances that Mr. Gladstone, much to the surprise of the country, suddenly dissolved Parliament; and he issued a programme to his electors which, if the report of those who are likely to be best informed is not wholly erroneous, was as much a surprise to most of his colleagues as to the public. The times were very prosperous, and a great surplus was gathering in the Exchequer. Mr. Gladstone, throwing all other political questions into the background, resolved to utilise this surplus for election purposes, and to stake his chances at the election upon large direct offers of financial relief made to the electors, but especially to that class of the electors who were known to be wavering in their allegiance. One portion of his election address consisted of a general and undefined promise to reduce duties and assist rates; but the part which at once and especially riveted the attention of the country by its conspicuous novelty and boldness was a definite pledge that if he won the election he would abolish the income-tax. This promise at once became the leading feature of the election. It was urged from a hundred Liberal platforms and in a hundred Liberal newspapers as the great reason why the income-tax-payers should support the ministry. Every elector of this class, as he went to the poll, was clearly informed that he had a direct personal money interest in the triumph of the Government.

      It is true that the promise of Mr. Gladstone was qualified by the following vague passage in his election address: ‘I have said nothing to preclude the government from asking Parliament to consider, in conjunction with these great remissions, what moderate assistance could be had from judicious adjustments of existing taxes.’ It is true also, that in a later speech, being pressed with the impossibility of repealing the income-tax without imposing other taxation, he admitted that, in consideration of the repeal of the income-tax and the reduction of rates, ‘property ought in some shape and to some considerable and equitable extent to make some fair contribution towards the public burdens.’ But the nature and magnitude of this contribution, the form it was to take, and the area over which it was to be distributed, were never revealed up to the day of the election. Everything relating to it was left perfectly vague and shadowy. One point only was brought before the electors in clear, vivid, unmistakable relief. It was, that if Mr. Gladstone won the day the income-tax would cease. Such a promise, unaccompanied by any distinct statement of equivalent burdens to be imposed, could only have operated as a direct bribe addressed to that great section of the electorate whose growing alienation from the Government was the chief cause of the dissolution. No politician, I believe, seriously doubted that when Mr. Gladstone placed the abolition of the income-tax in the forefront of the battle, his object was to win the income-tax-payers to his side.

      Some strictures that I ventured to make on this transaction in the former book elicited from Mr. Gladstone two articles of indignant defence.¹¹ No one who judged solely from those skilful and plausible pages would imagine that any question of winning votes, or arresting a political defection, or gaining a party triumph, could have entered even distantly into his calculations. He was merely, he said, ‘consulting’ the nation ‘upon the exercise of its chief and primary right of giving or withholding taxes;’ upon ‘a great subject of financial readjustment.’ ‘The rights of the people,’ as he truly said, ‘in respect to taxation are older, higher, clearer than in respect to any other subject of government.’ СКАЧАТЬ