i 1 m «,.^« V V" OUR FISCAL FUTURE. BY THE RIGHT HON. J. G. HUBBARD, M.P. LONDON: EFFINGHAM WILSON, EOYAL EXCHANGE. 1886. Reprinted from the " Times " of 23rd and 28th October, 1885. OUR FISCAL FUTURE Sir Lyon Playfair, in his learned and interesting inaugural address, deliyered at Aberdeen on the 9th September, as President of the British Asso- ciation, expatiated upon the vast progress of science within the present century, and he proved his title to speak exultingly by reviewing some of the departments of knowledge in which ingenuity, research, and experience had so accurately deter- mined facts as to construct from them rules and systems which acquire the authority of laws. Natural history and solar physics, education — elementary and technical — the acquisition and preparation of food, the prevention and treatment of disease, the pov/ers and appliances of steam and electricity, the utilisation of waste products, the accelerated potency of manufacturing industry, locomotion, sanitation — in all these departments Sir Lyon Playfair was able to claim an appreciable advance of science. STATESMANSHIP. There is, however, one science which finds no place in Sir Lyon Playfair's able review — yet it is no unimportant one — the science of Statesman- A 2 4 Our Fiscal^Future, ship ; that science which defines and regulates the pohtical, social, and financial duties and obligations of a government towards foreign nations, the Colonies and dependencies of the Crown, and its immediate subjects. There can be no accepted code of statesmanship in the Foreign or Colonial departments of a country which for a whole generation has been subjected to a see-saw policy, guided by a mutuality of personal enmities, operating through each faction in turn denouncing when out of office, and reversing when in office, the policy pursued by its predecessor — unless fated to accept the measures they had denounced. TAXATION. I abstain from criticising in detail other depart- ments of the public service, and I confine my remarks to fiscal ' and financial administration, to which I have more especially given my atten- tion, and with reference to which I can find no trace of any principle guiding the Finance Ministers of this country in the all-important duty of levying a National Income, upon a system which shall be at once equitable, convenient, and economical. Taxes have been habitually imposed to meet the exigencies of the State, with scant regard for any other consideration than their productiveness. Our Fiscal Future. 5 and taxes so imposed have been subsequently mitigated or repealed as tiie exigency passed away, or the voice of discontent became loud enough to persuade the Finance Minister that they were inconvenient. A conspicuous exception must indeed be made in favour of Sir Eobert Peel, the wise and patriotic statesman, who abolished the protective policy in order that industry and intelligence might have fair play in the great inter- national competition, and who freed the admission of raw material and articles of first necessity as food, in order that their price (no longer enhanced by import duties) might, in the diminished cost of production, enable England to compete with foreign rivalry in every market of the world. As the medium through which he was to effect a re- construction of our fiscal system. Sir Eobert Peel in 1842 resuscitated Pitt's War Income Tax with all its defects, but with an assigned duration of three years only, within which period it was hoped that the general revenue, under the impulse of extended trade and manufactures, might permit its discontinuance. Vain, however, were the an- ticipations of the Income Tax lapsing in 1845, and vain the promises wdiich at each subsequent re- newal pacified the taxpayer by the assurance that this was really to be the last time. The promises offered as a sufficient reason for refusing to reform the tax can be urged no longer. The tax cannot he discontinued. Prior to 1842 the public income was mainly raised by indirect taxation, i.e., by taxation through the Customs and Excise of articles of 6 Our Fiscal Future, general consumption, of which the cost was raised by the amount of the duty, and thus men contri- buted to the pubKc revenue in proportion to their own expenditure. This system, equitable as regards the taxpayer, was seriously obstructive to manu- facturing and commercial progress, by enhancing w^ages, raising prices, and disabling British in- dustry and enterprise from competing with countries whose raw material and food were untaxed. Sir Kobert Peel in 1842 rang the knell of the protective system and of indirect taxation as the chief depen- dence of the country for its National Eevenue. Free Trade will never be displaced from its firm position as a ruling principle, but Free Trade does not imply the abrogation of Customs duties, which discreetly levied may be approved, either as sources of revenue or as a means of distributing the bur- then of taxation over the whole community, with a facility unattainable through direct taxation. I turn to the Statement of Public Revenue for 1884-5 (pages 15 and 16). The first item is Customs, comprising these prin- cipal articles — Coffee, Cocoa, and Chicory ... £ 339,000 Tea ... 4,796,000 Currants and Dried Fruits 546,000 Wine and Beers ... ... 1,242,000 Spirits ... 4,313,000 Tobacco ... ... 9,277,000 Other A rticles 44,000 £20,558,000 Our Fiscal Future, The Keceipts of the Excise comprise- Beer .. £8,544,000 Beer Licences, and Brewers 228,000 Spirits .. 13,987,000 Spirit Licences ... .. 1,003,000 Wine and Tobacco Licences 155,000 Establishment, Dog and Gun Licences .. 1,186,000 Game Licences ... 187,000 Railways ... 392,000 Other Items 219,000 £26,501,000 The revenues derived from Customs and Excise must be considered together, raised, as they are, hirgely upon the same articles. All the more im- portant Duties specified in either list are justifiable and commendable. The direct and incidental contributions from Wine, Beer, and Spirits amount together to jC30,072,000, and this large proportion of the public Eevenue must be in the main regarded as a portion of a spontaneous expenditure upon luxuries. The .£9,277,000 levied upon Tobacco partake of the same character. The Establishment, Dog, Gun, and Game Licences supply ^1,373,000, levied upon wealthy persons for causes more or less under their control. Dried Fruits may be a luxury, but Currants and Eaisins, the attractive feature in the national plum pudding of ah classes, I would gladly see enterhig Duty free. Tea and Coffee yield JC5, 135,000, but this large sum is the con- tribution of our large population of thirty- six millions. Every class of the community, through 8 Our Fiscal Fut lire. this tax, makes some return to the State for the peace, order, and liberty which every member of every class enjoys. The smoker, beer and spirit drinker, contribute much more largely than the tea drinker to the national revenue, and although, with a view to the morality and prosperity of the country, one may wish that Tea more largely superseded alcoholic beverages, no sufficient reason could be alleged for wholly exonerating tea consumers who neither smoke nor drink alcoholic liquors from bringing to the national exchequer the modest sum which, if their income be under ^150 a year, they are asked to contribute through no other medium. An important gain in health, morals, and domestic hajDpiness would result from the diversion into the savings banks of the exces- sive proportion of weekly wages now spent in the public-house. And when his sobriety and thrift have raised the workman's income beyond the limit of exemption from income tax, the State and the subject alike would profit by the altered form of his contribution to the national revenue. The Land Tax is an unsatisfactory tax ; mis- leading in its name, capricious in its incidence, and,, as regards the residue unredeemed, most embarrassing, for it can form no part of any har- monious fiscal system. The first Act, passed in 1692, *' for granting an *' aid of four shillings in the pound for one year for carrying on a vigorous war with France," imposed (second section) a duty of four shillings in the pound on the yearly value of all Personal Estates ; Our Fiscal Future. 9 the third section imposed the same duty on all Salaries or offices of profit ; and the fom^th section imposes the same duty on the yearly value of all Lands, Tenements, and Hereditaments. In 1697 a Land Tax was passed imposing the tax in the form still preserved ; that Act was renewed yearly until 1797, the date of the last annual Act. *• Now it is remarkable that these Acts of ' 1697 and 1797 appear to mark more strongly ' than before the taxation of personal estate ' as the primary object of the law. After the ' clauses imposing upon goods, wares, &c., and ' upon pensions and offices, the fixed charge of four ' shillings in the pound towards raising quotas, ' that relating to land appears to treat it as a sub- * sidiary contribution for the purpose of making up ' the sum due to the Exchequer, after exhausting ' the other resources. The words are, * and to ' ' the end the full and entire sums by this Act * ' charged upon the several counties, &c., may ' * be fully and completely raised and paid, be it ' '■ enacted, that all lands shall be charged by a * ^ pound rate towards the said several sums by * ' this Act imposed.' "—(Inland Eev., 28th Re- port.) Owing probably to the difficulty of locally assess- ing personal property, the owners of which were tied to no fixed residence, the amounts levied upon personal property became less and less, while to supplement the proceeds gathered under the primary intention of the Acts, real property 10 Our Fiscal Future, was charged with larger and larger portions until it remained alone responsible for the whole bur- then of the required quota. During the hundred years— 1697-1797 — the Land Tax was levied under annual acts at rates varying from Is. to 4s. in the £, but in 1798 Mr. Pitt, having first made the tax permanent at 4s. in the £, proposed its redemption. Land- owners were invited to purchase ^80,000,000 of 3 per cent, stock, then quoted at 50, and then trans- fer this stock to the State in redemption of the annual tax of ^62,000,000. These were terms, said Mr. Pitt, '' presenting at once a considerable * * pecuniary gain to the public, and an advantage '' to the individual by whom the redemption shall ** be made." The audacity of this proposal is startling. *' The scheme failed. In the years 1798 and '* 1799 land tax was redeemed to the extent of *' J0435,855, but in the following year the amount '^ was only ^40,418 " (In. Kev. Rep., p. 91). The rapid rise in the price of Consols, the average be- ing 63f in 1800, would undoubtedly check the progress of the redemption, but the scheme as announced, imposed on the landowner an addi- tional sacrifice equal to one-fifth of his existing liability. Obviously he would lose what the Ex- chequer would gain, and it is amusing to discover in the famous schemes of the *' Great Financiers " Pitt and Gladstone, in 1798, 1853, and 1884, the same tendency to delude themselves or the pub- lic, with, the idea that the taxpayer or fundholder Our Fiscal Future, 11 can give the State 25s. for a pound without loss to himself. The terms of redemption were reduced in 1853, but its progress has been inconsiderable, and the amount of the tax received in 1881-5 was .£1,044,858. It rem^iins an embarrassing tax ; it cannot be surrendered, but it might be expedient to offer tempting terms for its redemption — say- twenty years' purchase from an entire parish, so as to simplify the process of collection. The Inhabited House Duty holds an anomalous position as a source of revenue. It isUess objec- tionable than the *' Window Duty," which it su- perseded and displaced ; but it is a partial tax, charged upon houses of £20 (and upwards) rental, and thus affecting in Great Britain (for Ireland is exempt) only one-fifth part of the enumerated dwellings. In its present form and rate it dates from 1851, when the Income Tax was deemed ^a transitory impost ; and its con- tinued co-existence with the Income Tax, levied upon the same property, and applicable to the same Imperial purposes, is obviously unjustifiable as a waste of labour. Out of 6,010,000 houses, 1,170,000 were in 1883-4 charged with House^Duty, to the amount of £2,040,000. Fiscal changes are of themselves, as changes, mischievous, for they disturb the bearing of social and commercial con- tracts, and the relations of landlord and tenant might be brought into question by the repeal of the House duty ; but if this difficulty could be obviated, the duty might be advantageously super- 12 Our Fiscal Future. seded by the addition of one penny to a reformed Income Tax. The Property and Income Tax is especially dis- liked. Why? If the table of the public income were a Tahda Basa, what form of tax would naturally suggest itself as the most suitable for a prominent position ? Assuredly the instinctive reply would be, ^' The public income must be fur- nished by contributions from individual incomes levied upon every man according to his ability." From an Income tax thus defined, exemptions should be made only in the case of incomes just sufficient for the subsistence of unskilled labour, or so small that the tax upon them is not worth collecting. That the administration of Income Tax has for more than forty years, under its many renewals, violated every scientific and equitable rule is an ofience which has hitherto been excused upon the plea that the tax itself was a temporary one. That plea can no longer be advanced ; but the recent Inland Revenue Report, ignoring that the very gravest abuses may endure for generations when upheld by an arbitrary and unreasoning force, innocently suggests (quoting the words of the thirteenth Report), *'It may appear remarkable *' that, in spite of all its drawbacks, and the con- *' stant attacks to which it has been subjected, the ** Income Tax should have remained in force for '' more than forty years without undergoing any " serious alterations. The fact of its having done *' so furnishes a strong reason for assuming that Our Fiscal Future, 13 its present form is as good as, or better than, any other that could be devised, and this as- sumption appears to us to be strengthened by the following considerations : — *' The two main objections that have been raised against the Income Tax are its inquisitorial character and the inequitable nature of its inci- dence. '' As regards the second of these objections, we have nothing substantial to add to the Eeport of the Committee of 1861, who declared their opinion * that it would be unjust to make any ' alteration in the present incidence of the In- ' come Tax without at the same time taking into ' consideration the pressure of other taxation ' upon the various interests of the country, ' some of it imposed by recent legislation, and ' in one case especially — that of the Succession ' Duty — to some extent by way of compensa- ' tion.' " In this extract, the admission of the inequitable nature of the Income Tax is qualified by the comment borrowed from the Eeport of the Income Tax Committee of 1861, " that it would be unjust '' to alter the Income Tax without considering the '' pressure of other taxation, especially the Suc- '' cession Duty." Every tax should be equitable in itself ; and it is a slovenly device which seeks to atone for one defect by creating another, hke the horse-dealer who would conceal a horse's lameness in one fore- foot by driving a nail into its fellow. The notice, A 3 14 Our Fiscal Future, however, that there may be counteracting agencies in other taxes deserves attention, and I propose, therefore, at once to examine the construction and incidence of the Death Duties in relation to the Income Tax. From the twenty-eighth Report of the Inland Revenue I derive the following statements : — Value of Estates. PROBATE DUTY, 1884-5. Amount of Duty. £20,000 65,000 97,000 3,759,000 £3,941,000 * Including £50,000,000 paying 1 per cent. Legacy Duty, or £500,000. LEGACY DUTY. £2,502,600 on 13,333 estates under £300 each paying £1. 10s. 3,250,000 of estates under £500 at 2 per cent. 4,750,000 of estates of £500 to £1,000 at 2 J per cent. *125 300,000 of estates of above £1,000 at 3 cent. £135,802,600 Amount of Property. Rate of Duty. Amount of Duty. £31,002,432 37,733,382 4,198,127 331,293 1 per cent. 3 „ 5 „ 6 „ £310,113 ... 1,132,492 209,945 19,884 11,588,583 10 „ 1,153,008 £84,853,817 £2,825,442 SUCCESSION DUTY. Esitmated Value of Life Rate of Amount of Capital Value. Interest Charged. Duty. Duty. £68,336,718 £34,168,359 1 per cent. £344,705 17,795,362 8,897,681 3 „ 268,936 2,051,836 1,025,918 5 „ 51,699 600,552 300,276 6 „ 18,590 5,023,662 2,514,331 10 „ H Duties ... 253,018 £93,813,130 £46,906,565 Total of Deat £936,948 £7,703,390 Our Fiscal Future. 15 Mr. Childers, in his Budget speech, demon- strated, what is obviously true, that the Death Duties were in an unsatisfactory condition, and he proposed to amend them by subjecting real and personal property to an equal treatment. The expediency of equal treatment is unquestionable, but it should be applied in the first instance not by raising the taxation of Eeal property to the level of that exacted from Personal property, but by lowering the Probate Duty on Personal property. "With perfect consistency the illogical concession to realty and life tenures could then be abolished, and Eealty and Personalty should be charged on their capital value for Probate, Legacy, and Succession Duties. If this plan were followed, and assuming all property to be subject to a Probate Duty of ^ per cent., and that the present Legacies Duties con- tinue, it will yield these results : — ^ -1. 1 -ir 1 Amount of Capital Value. -p^^.^^_ Personalty, paying Probate ...£135,802,600 at ^ % £679,013 i?m%, to pay Probate ... 93,813,130 „ 469,065 Per5092a%, paying Legacy Duty 84,853,817 „ 2,825,442 Perso?^«%, merged in Probate 50,000,000 „ 500,000 ^m%, to pay Succession Duty 93,813,130 „ 1,873,896 £6,347,416 A comparison of these statements shows a deticit in the produce of the Death Duties to be appropriately met by an increase of the Income Tax, which, as a tax satisfied out of yearly revenue. 16 Our Fiscal Future, is more easily discharged than Death Duties taken out of capital. Keal property is entitled to claim that its assess- ment to the Income Tax shall, like its assessment for local rates, be based upon its " real annual value," that is, upon its net or rateable value. Real property, Eated by local authorities upon a net value of jC147,000,000 in 1884-5, was Taxed by the Inland Revenue upon a gross value of i!175,000,000, the difference of JC700,000 (levied as duty at 6d. in the jC on JC28,000,000, the cost of maintenance) being, therefore, the amount wrongfully abstracted from realty. It is, however, impossible to measure the demerits of the present administration of the Income Tax by compariDg the aggregate results of an adjustment of the several schedules in their entirety. It is a characteristic of the vicious practice of taxing outgoings, that it favours the rich and presses with intensified severity upon the poorer pro- prietors. The owner of an estate of ^2,000 nominal, and i^l,800 net value, burthened with mortgage interest to the extent of i^l,600, recoups himself to the extent of £1,600 paid to the mort- gagee, but has still to pay the tax on j£400, while his actual residue is i^200. The poorer the owner, the heavier the charge rateably upon his residue^ So glaring an injustice cannot be ignored, nor can the grievance be silenced by the Report of the Inland Revenue, when it echoes Mr. Glad- stone's stereotype argument '^ that the present system has met with the approval of every eminent Our Fiscal Future. 17 '* statesman who, since the days of Mr. Pitt, has '' had to control the finances of the country." The assertion is simply a disproof of their statesman- ship. The Minister who would rectify an abuse in one quarter by originating a countervailing abuse in another, resembles a trader who, having a pair of scales unequally poised, seeks to adjust the level of his beam by tampering with the weights. For a special transaction dealing with a fixed quantity, the tinkering process may be successful, and the dip of the beam be countervailed by the use of a degraded weight, but when the quantity of the article is increased in one scale, and it is balanced by just weights in the other, the resulting record must be false, owing to the incurably false action of the longer beam. No device of counter-pres- sure can remove the grave but irregular grievance of taxing as income the rents of property subject to outgoings, ranging from five to thirty per cent. Nor can counter-pressure remedy the varying grades of injustice consequent on taxing at their gross rental, estates of which (when the incum- brances are paid) the owners' residue varies from ninety per cent, to nothing at alL In a previous page the Eeport adduces an illustrative case to disprove that there is any injustice in taxing on their full amount the earnings of skill and industry. Briefly stated, here it is — (Inland Eevenue, 28th Eeport, p. 84) : — " An official appointed to a post with a salary ** of i;600 would, in thirty years, pay at six- 18 Our Fiscal Future. '' pence in the pound, Income Tax to the amount '' of .£450. ^' A fundholder succeeding to the possession of ** >£20,000 Three per Cents, would pay at once ** three per cent. Probate, or £600, and an annual ** Income Tax of £15, making his payments in '' thirty years £1,050, as against £450." The recent additions to the Probate Duty on personalty are here adduced as a counterpart, and corrective of the excessive duty on industrial earnings ; but two wrongs cannot make one right, and the comparison can only show that wrongs of different magnitude are inflicted upon different classes. I am grateful for the parallel of the official and the fundholder in the Report, for it enables me to compare them as subjects of taxation, in the view of Adam Smith — i.e., according to their re- spective abilities. The fundholder possesses an assured income of £600, subject to no costs for maintenance ; he may spend the whole of it ; and his £20,000 stock, with its interest of £600 a year, remains intact for his family at his death. The official, in accordance with every rule of prudence, reserves one-third of his salary from his expenditure. The invested accumulations of the £200 would constitute a fund for his own support in his old age, or for his family a capital sum reproducing an income such as that upon which they had hitherto subsisted. Our Fiscal Future. 19 As subjects of taxation, the ability of the fund- holder is ^600 ; that of the official is ^£400. This rule of abstaining from taxing the indus- trial savings, which for a man constitutes his reparation fund, is in perfect analogy with that which requires an allowance for the maintenance of material property, and if legislative authority is needful it may be found in the Inland Eevenue Act of 1853, which (sec. 54) excuses from taxation any amount expended in the premium of a life policy to the extent of one- sixth of the taxable income. Here is the principle of respecting savings distinctly admitted, although accompanied with too narrow a limit, and with the inconvenient stipulation that the savings (to the exclusion of more profitable employment) be invested in a life policy. And now, to the discouraging views of an ad- justment which conclude the chapter on the Income Tax in the Eeport, I will oppose evidence of irresistible authority. In order to terminate the indefensible exemption from Probate and Succession Duties enjoyed by corporations who never die, it has been provided in the Customs and Inland Eevenue Act, 1885, sec. 11., that, as an equivalent to these duties, corporations shall be subject to a yearly charge of five per cent, upon the annual value of their property, ^' after " deducting therefrom all necessary outgoings.'' Here, then, is a model Income Tax, levied upon the net or rateable value. Why does it take this form ? Evidently, because, as an equivalent for a Succes- 20 Our Fiscal Future. sion Duty, it was computed upon the same principle, and as the Succession Duty is charged upon the capitalised value of the net annual value, so it became indispensable that the yearly tax representing it should equally be charged upon the net annual value. But if an Income Tax on the net value can be applied to the pro- perties of corporations, why should it not be equally so applied to all other properties ? It would be vain to expect any answer in justification of the anomaly. The Twenty-eighth Inland Eevenue Eeport recites ** the three complaints popularly made " against the Income Tax in its present form— *' viz., (1) that it taxes the owners of property in *' respect of income which they do not get; (2) " that it presses too hard on skill and industry as *^ compared with property; (3) that it deals with *' capital in certain cases as if it were income, and '' taxes it accordingly." I have still to deal with the last of these complaints. When the State borrows sums repayable over a series of years, in equal yearly or half-yearly amounts, the instrument of the loan is called a Terminable Annuity, each payment combining the repayment of a portion of the capital with interest on the capital unpaid. Under the Act of 1842 the State claimed as its right to tax the entirety of each payment, taxing, therefore, both capital and interest. But the State presently assumed the character of lenders. In 1846 it lent money to Scotch proprietors, who thus became debtors to Our Fiscal Future, 21 the State, and their loans being repayable as Terminable Annuities, they were entitled, ac- cording to the Act, to deduct Income Tax on each instalment paid to the Exchequer. The Exchequer discovered before long that under this process it did not recover the whole of the capital lent, and the Government introduced into the Act of 1853 a clause providing that those who paid the annuities should be allowed Income Tax on the interest only, and not on the principal repaid. This ''just provision" (as the enactment called it) in favour of the Government, when creditor, places in stiU more odious contrast the action of the Government when it is the debtor. I may further cite a very recent occurrence in support of the doctrine adopted in 1853, that income tax should be charged on interest, and not on capital. By the Land Purchase (Ireland) Act the Government undertake to lend to the purchaser of Irish lands the whole of the price, repayable in 49 years by instalments of capital combined with interest at 3 per cent., and the Chancellor of the Exchequer, in answer to a question, stated that the borrow^^r in the payment of the several instalments would be entitled to deduct income tax on the interest only, and not on the capital repaid through the instalment. I have proved that the law distinctly provides for exonerating from income tax capital in the course of repayment when the State is the capitalist ; and it is impossible to imagine that 22 Our Fiscal Future, the Legislature will longer sanction an administra- tion of the income tax which shall continue to deal upon one system with the debtors and upon another with the creditors of the State. The Income Tax Administration Amendment Bill presented to the House of Commons in the last Session by Mr. Hubbard, Sir Charles Foster, Mr. Whitley, and Mr. E. A. Leatham, would on its enactmennt require that] the Income tax generally be administered upon the principles which have long regulated our Local taxation, and have now with a special application been accepted in the Legislation of 1885. STAMPS ON DEEDS AND TEANSFERS. Of the ^4,000,000 completing with the death duties the ^12,000,000 credited to the public revenue under the head of Stamps, the most important items in the class of deeds and other instruments are *' Conveyances," chargeable with 10s. per ^100; ''Settlements," chargeable with 5s. per XlOO ; and "Mortgages," chargeable with 2s. 6d. per JCIOO, all levied on the capital value, and ''Leases," chargeable with 10s, per JCIOO on the annual rent. The 28th Keport is unable to furnish further details, but estimates the product of these duties, all bearing upon real pro- perty, at ^900,000 a year. These duties seem, as a burthen on land, and as an impediment to its Our Fiscal Future. 23 easy transfer,to be strikingly at variance with every scientific principle of taxation, and signally repug- nant to the sentiment which seeks to facilitate the multipHcation of landed proprietors. Equal treat- ment of real and personal property demands that these duties be reduced to the level of those charged upon personalty under like conditions. The duty on the transfer of Corporation and Debenture Stocks is 2s. 6d. per £100. Can any reason be alleged for denying to Realty a reduction of 7s. 6d. per XlOO on conveyances and proportionate reductions upon the other procedures ? I am aware that the Stamp Duty is but a part, and a small part, of the entire cost of a conveyance, and that to make land as cheaply transferable as stocks the whole system of professional agency may need to be simplified, and that a general registration, founded on the admirable 26-inch or 6-inch Ordnance Map, should constitute in the future an unimpeachable evidence of tithe. Legislative regulations have diminished the grievance, since Mr. Sweet informed the Eoyal Commissioners for Registration of Tithe, that the expenses of purchase had under his observation been, for £27,333— JE697, or 2 J per cent., and upon properties (under £1,000 in value), for £4,357 — £245, or 6 per cent. These charges did not include the Stamp Duty of ^ per cent., nor did they include the vendors' expenses, probably much higher. I have now passed in review all the items of " Taxation " properly so called, and of which the 24 Our Fiscal Future. amount in 1884-5 (Par. Paper 393), i^73,667,709, exceeds that of any antecedent year which alone I am able to bring under comparison, 1876-7 being the earliest of the *' Analysed Accounts of the Public Income and Expenditure " which, retrench- ing all counter-entries and repayments, exhibits at a glance the income received under four heads, viz.: (1) Taxation; (2) Services undertaken by the Crown ; (3J Croiun Plights, and (4) Grown Lands, Taxation I have already discussed. The Services performed by the Crown in the administration of the Post Office and Telegraphs yield a net profit in 1884-5 of .... .^2,927,832 Grown Eights yielded 370,298 Grown Lands 380,000 Taxation, as already stated .... 73,667,709 Showing a National Income of ^77,345,839 as against a national expenditure of .£78,395,611, and not one of £89,092,882, an amount which, from the form of the official statement (Par. Paper 181, 1885), is generally and erroneously supposed to have been the national expenditure, involving a corresponding amount of national taxation. Grown Flights comprise the profits of the Mint Coinage £ 88,112 Bank of England Issues .... 153,895 Bank Issues (Sundry) .... 128,291 £370,298 The only remark these items suggest is that the Our Fiscal Future. 25 profit on Crown Eights might be safely enlarged by their extension in the direction indicated by Sn- Eobert Peel, who, in his Currency Bill of 1844, prepared the way for a perfect system of Currency, only as yet partially effected. SUMMARY. I venture to anticipate that principles already admitted in theory, and partially in practice, shall be consistently carried out in the following parti- culars : — 1. That Eeal and Personal property shall be treated alike, whether by Death Duties charged on the capital, or by Income Tax charged on the net annual products. 2. That Probates of wills, affecting either real or personal property, shall be charged with an ad- valorem duty of one-half per cent. 3. That the rates of duty now leviable on Legacies or Successions shall be continued, and be charged on the capital value. 4. That the Income Tax be uniformly admi- nistered on the principle now regulating all Local taxation, and recently applied to the provisions of the Corporation Income Tax of 1885. 5. That the Stamp Duty on conveyances, settle- ments, leases, and mortgages of realty be lessened 26 Our Fiscal Future, to an equality with that imposed on personal property subjected to the same procedures. 6. That favourable terms be proposed for the extinction of the unredeemed portion of the Land tax now levied wholly on real property, though originally imposed upon personalty also. If the reforms in our Fiscal system, which I contemplate be effected, there will still remain many malcontents ; for no abuse could ever be re- moved without angering those who had profited by it. Justice will have been done to all classes, but not every man in every class will be gratified. The present system favours the rich, and thus the rich and unemcumbered landowners will profit little by the change in comparison with the deeply- mortgaged and impoverished proprietor. This, however, is certain. A system which does not attempt to balance grievances, but cures them by doing justice to all, can only operate unfavourably for those who have unfairly profited by an imper- fect fiscal system. My personal position, not exclusively identified with any of the classes affected by my remarks, and still more, I trust, the tone of those remarks, will make it abundantly clear that my appeal lies not to class or self-interest, but to the reason and patriotism of my countrymen. J, G. HUBBARD. London : Effingham Wilson, Printer, Royal Exchange, E.G. 1 u .;?:<