Blackwood's Edinburgh Magazine, Volume 63, No. 389, March 1848

But the second point – that of the injustice of this measure – is most glaring, and demands immediate attention. Opposed as we are to the substitution of direct for indirect taxation, we can yet understand the motives of a minister who comes forward with a distinct and equable plan for an entire remodelment of the system. We believe that no such scheme can possibly be reduced to practice; and that, if attempted, it would prove utterly obnoxious and subversive of the national interest: we think that it would be unwise, but at the same time it might not be unjust as between man and man in the community. There is a certain burden to be borne by the whole of the nation, and the great problem is, to find out how every man can be made to contribute his proper share. Laws are framed and institutions founded for the protection of property and person; and, strictly speaking, every one is bound to bear the expense according to his means. The only effectual method which has ever yet been discovered for securing this, is the system of indirect taxation. By that system each man contributes to the revenue in proportion to the amount of taxed articles which he consumes. Wealth, in the aggregate, superinduces luxury, and the higher classes pay proportionably for the increased comforts they enjoy. Such were the principles of indirect taxation before Sir Robert Peel began to alter it, and even yet many of the original features remain. But we cannot recognise in his tariffs any thing of a consistent plan. That foreign luxuries, which cannot be produced in this country, should be brought in at as low a rate of duty as the state of the revenue will allow, is admitted on all hands. Wine, for example, which is no product of ours, is a case in point. But when we find him deliberately fostering foreign industry at the expense of home manufactures – reducing or abolishing the duties upon such articles as ornamental glass, boots, gloves, or made-up fancy silks, which, from their natures, are consumed by the higher classes only, our belief in his sagacity vanishes. The time is fast approaching when the artisan will feel severely the effects of that departure from our older system, which regarded home industry with peculiar favour, and refused to sacrifice it for the sake of increasing the yearly amount of our imports. Every curtailed or superseded branch of employment in this overpeopled country is a national loss and a misfortune.

Direct taxation might be accepted as a substitute if it only could be adequately enforced. This, however, we know to be impossible. The expense of collection below a certain limit would entirely swallow up the profit; and besides, it is clearly beyond the power of human ingenuity to ascertain, with any thing like accuracy, the means of the whole population. The only approximation to the direct system which has ever been suggested, is through a regulated house-tax; but even that would fail in accomplishing its end, and the inequality would still prevail. Direct taxation is liable to infinite abuse. It is odious and inquisitorial in its nature, and no minister has been bold enough to propound a plan for making it supersede the other.

If, therefore, this income-tax, palmed upon us through fraudulent representation, and now proposed as perpetual on the plea of pressing emergency, is to be continued for ever, it will be necessary for us to consider how far it is levied on those benefited by the removal of indirect taxes – how far it applies to all classes – and whether it is one-sided and unjust, or fair and equitable, in its operation. Before we consent to an impost which must affect us and our children, it is well that we should thoroughly understand the nature of the obligation we undertake. The income-tax was originally proposed to supply the loss of revenue sustained in consequence of an over-reduction of the indirect taxes; and as a matter of equity it follows, that the supplies should be drawn, though in a different form, from the same portion of the community.

Is this the case? Can any man venture to say that the income-tax, as we have known it for the last five years, has been borne with equal fairness by all classes of the community? Is it not, on the contrary, the most unequal, the most unjust, and the most oppressive tax that ever yet was levied? We hardly believe that on this point there can be any difference of opinion: and we shall now proceed to notice the separate considerations upon which our decided and determined hostility to the measure is based.

By exempting from taxation all incomes below £150, a glaring act of injustice is committed. There is no reason whatever why that amount should be fixed upon as the lowest point – why the tradesman, clerk, or rising professional man, who barely clears that amount of profit, should be made to pay permanently for the others who are not so industrious or so fortunate. It is not, however, difficult to understand why Sir Robert Peel, in proposing the tax as a mere temporary relief, should have been cautious to avoid any agitation of the masses on a question so vitally important to their well-being, had justice been the foundation of his plan. He probably thought that, by exempting that portion of the middle classes whose incomes did not reach the above amount, he would at all events secure their neutrality, and perhaps purchase their support in any subsequent attempt to render the tax perpetual. This view is fortified by the exposition contained in the famous Elbing letter, and though we may admire the ingenuity of the scheme, we cannot commend it for morality. If this tax is to be continued and augmented, we are in justice entitled to demand that it shall be carried down to the very lowest point at which the amount of revenue drawn may exceed the cost of collection. In 1798, according to Mr Porter, "an income tax was imposed at the rate of ten per cent upon all incomes amounting to £200 and upwards, with diminishing rates upon smaller incomes, down to £60 per annum, below which rate the tax was not to apply." If we are to persevere in this unwholesome style of taxation, there is no reason whatever why some such arrangement as the above should not be adopted. It is contrary to the constitution of a free country, that any class should be selected as the subjects of isolated taxation, and doubly so when the selection is made for the almost avowed purpose of relieving some other class from the impost. Equal laws and equal rights can only be maintained where there is a proper equality of burdens; and if it be difficult to arrange the scale, as it undoubtedly is, the difficulty must be met by those who propose to substitute this unconstitutional mode of taxation for that which applied equally to all classes of the community. Why should each and all of us, who subsist by our own industry, and who are ready to pay our own share of the national expenditure, be forced in addition to pay the quota of others whose incomes do not amount to £150? Surely, there is less difference in position between the man who clears £140 a-year by his trade, and another whose gross profits amount to £155, than between the latter and the possessor of a revenue of £10,000 per annum? And yet, the two last are to be charged five per cent on their incomes, whilst the other, who has the sense to moderate his industry, is to be entitled to escape scot-free!

Another monstrous hardship of the income-tax is its pressure upon professional men, and upon those whose incomes are precarious. No distinction is made by the act of 1842, between profits accruing from realised property, and those which are entirely the product of individual and personal exertion; and yet, in every point of view, there is a vast difference between the parties so situated. The man who derives an income of £1000 a-year from landed property, or from the funds, is in a far better position than the divine, the lawyer, the physician, or the military officer, whose incomes perish with their persons. That most pressing duty of life, the necessity of laying by Some provision for a rising family, is in the one case already fulfilled – in the other it is urgent; and yet no distinction whatever is made between the two. The professional man is compelled year after year to lay aside a large portion of his income, for the sake of securing, by insurance or otherwise, the means of subsistence for his family in the case of sudden death. He may not be able to spend one half of his apparent income, and yet no deduction is allowed on this account. He must pay for burdens not his own, and for ministerial folly in which he was no participator, an amount equal to that which is levied from the fund-holder or the man of acres, in the full knowledge that, when he dies, his capital is buried with him, whilst that of the other class remains tangible and available by inheritance. This is another ground upon which we decidedly object to the continuance and augmentation of the income-tax.

But the worst and most intolerable feature of the whole remains behind. Unjustly apportioned as this tax undoubtedly is among ourselves, the total exemption of Ireland from its operation is a matter which cannot fail to excite throughout Great Britain a feeling of universal and bitter indignation. Ireland, as we all know, is already exempted from several of our heaviest burdens: she is by far the greatest pensioner of the public purse; and the charities and bounties which have been so indiscriminately lavished upon her, are beyond all bounds disproportionate either to her wants or her gratitude. But when it is seriously proposed to make this tax – which is a class one – permanent, and to exempt from its operation all persons of property and income in Ireland, it is full time that we should speak out boldly, and declare, that at all hazards we shall not submit to so gross and flagrant an injustice. This is no time for puerile remonstrance. We have already borne and suffered more than we are able to endure; and we must not permit ourselves to be sacrificed, in order that Lord John Russell may command the Irish votes; we must not be impoverished, in order to give a new impetus to the cause of turbulence and sedition. In particular, let us impress upon our representatives, that this is a matter in which Scotland is vitally concerned. We have submitted very tamely and quietly to much neglect, and to a good deal of palpable injustice; we have abstained from making that outcry which the notorious neglect, by each succeeding government, of our institutions and foundations rendered almost a national duty. We have allowed ourselves, though the poorer country of the two, to be taxed on the same scale with England; but we cannot, and must not, be silent sufferers under this crowning act of oppression. Ireland must not be permitted any longer to benefit by our patience and our thrift. On this part of the subject, Lord John Russell is peculiarly weak. He feels, and by implication admits, the impropriety of the Irish exemption; and he took refuge from the derisive cheering of the House in some general, but useless axioms, to the effect that the prosperity of Ireland involved the prosperity of the United Kingdom. All we can say upon that topic is, that if the well-being of Britain depends upon the exertions and tranquillity of Ireland, our existence as a great empire at the present day may be counted as the most stupendous of modern miracles. But this, even in the most favourable point of view, affords no argument at all. We presume it is admitted, that the prosperity of Scotland has something to do with the welfare of the United Kingdom; but are we on that account entitled to demand that the people of England shall bear at least one half of our proper fiscal burdens? The pretext is so flimsy, that we wonder how any prime minister could find courage to state it in his place. This is avowedly not a tax which is to affect the working or pauper population: it does not wring the pence from the hands of the peasant. It spares all incomes under £150; and are we now to be deliberately told, when this impost is sought to be made permanent, that the lawyers, physicians, and tradesmen of Dublin are to be exempted from an assessment, occasioned by a general defalcation of the revenue, to the gross injury of their professional brethren who have the misfortune to reside in Edinburgh? But we go a great deal further than this. We say, that if exemption is to be given to the Irish landlords, a stronger case for the same immunity may be preferred in behalf of the landowners throughout the greater part of Scotland. The cruel suppression of the kelp manufacture has long ago reduced a vast portion of the population located in the Western Highlands and Islands to a state of pauperism. Poor-rates have been enormously increased; and the failure of the potato-crop was felt in those districts at least as severely as in Ireland. Very scanty indeed was the relief doled out by government here, at the time when large supplies were forced into the turbulent island; the burden of maintaining the poor was thrown upon our proprietors; and their reward is to be an augmented income-tax of five per cent, whilst the Irish, as usual, are to go free! Really, when we consider this matter in its broad and open bearing, the injustice appears so enormous, that we can hardly bring ourselves to believe that it is seriously intended to perpetrate it. At all events our course is clear. There can be no party distinctions in such a matter as this. Whatever difference of opinion may exist as to the policy of continuing the income-tax, there can be none as to the propriety of its just and equal distribution throughout the empire. The voice of Scotland must be heard upon this point, and loudly too, else our fragmentary representation is nothing more than a shadow and a dream. We trust that both the counties and the towns will bestir themselves to oppose this meditated act of spoliation; and by a ready and united resistance, compel the ministry to remember that higher and weightier considerations than the command of some Irish votes are involved in a question so momentous and so vital to the whole community.

Indeed, if the income-tax is really to become permanent, it must be placed upon an entirely different basis, and undergo a thorough revision. It cannot be suffered to pass in that light and easy manner which Lord John Russell seems to contemplate. His former colleague, Mr Baring, feels this, and does not hesitate to say it. We quote from his remarks upon the subject: – "It might be very well in times of great difficulty, or in time of war, to do that under the pressing necessity of the circumstances, which they were prepared to justify solely on the grounds of such necessity, but which would not be justifiable without it. When, then, they proposed for two or three years to lay on an income-tax in time of war, they might not be very nice in seeing that the tax pressed equally on all classes; but when they came to raise all income-tax of five per cent, and made it part of the permanent system of taxation, he thought they were bound to make it a more equable and fair tax than it was at present. He alluded to the different manner in which the tax pressed upon incomes derived from property, and from those which depended on the exertions of individuals. He did not think this tax, as it was at present imposed, could long stand the test of fair reasoning." It may be very well for the premier to state, with Whig glibness, that "we propose, therefore, to take the tax exactly as it has been imposed in late years – on the same principles on which it was proposed and defended by Mr Pitt, on the principles on which it was increased by Lord Grenville and Lord Lansdowne." He is utterly wrong, both in his history and in his inference. The present tax is, in its most important features, defencible upon no principle that ever was enunciated before; and he is mistaken if he supposes that the British nation will consider a permanent impost in the same light as one which was merely temporary. We maintain that the measure, as a whole, is in the highest degree dangerous and unconstitutional; but if we are compelled to submit to it as the product of wild and reckless experiment, it is absolutely necessary that it should be reconstructed in accordance to the dictates of justice. The late act was neither so framed nor administered. Upon what principle, we should like to know, is the English landed proprietor assessed upon a rental from which all parochial and other burdens are deducted, whilst in Scotland the landlord is charged upon the gross amount? The Englishman is entitled to deduction of poor, county, highway, church, and police rates; whilst the Scotchman is very coolly handed over to the tender mercies of the commissioners under schedule A, and assessed to the uttermost farthing! This is but one instance of the inequality which pervades the act of 1842; and although it might have been passed over without much notice in a scheme of taxation which was only to last for a limited time, it must not be suffered to remain unaltered when a permanent burden is to be laid upon our aching shoulders. This country, far more than Ireland, stands in need of a national association to watch over and protect its interests.

We shall not venture to anticipate the reception of this most deplorable financial statement when it is fully brought before parliament. We fully agree with Mr Osborne, who said that, "had there been a regularly organised Opposition, such a statement would never have been made. In such a case, the fact of a minister under present circumstances calling for an increase in taxation, would have signed the deathwarrant of his cabinet. The present ministry, he believed, would be the most unpopular and the most unfortunate who had ever sat within these walls." Hard language this certainly, when addressed to the prophets of unbounded prosperity following in the wake of free-trade, but not more hard than true. Commercial distress, unexampled bankruptcy, money at a minimum rate of eight per cent, ruined colonies, and a war-tax made permanent and augmented, have been the first-fruits of that glorious measure which was absolutely to swamp us with an inundation of unexampled riches! How much further, we may ask, is it proposed to carry the experiment? Are the navigation laws to be repealed by a ministry which acknowledges the necessity of increasing our armaments? Which interest is next to suffer?

"Who else must be let blood – who else is rank?"

What other reductions are to be made – what further filching from the customs effected, in order that, in another year or two, a fresh direct demand may be made upon an isolated class of the community? We have read over every part of Lord John Russell's financial statement with the utmost attention; and, fully satisfied as we are that the deficiency in the balance must be made good, we have arrived at the conclusion that the proposed measures are upon no account whatever justifiable. Are the Whigs sincere in their belief that the free-trade experiment will prosper? If they are, why do they seek to make this income-tax permanent? – why do they ask for five years as the shortest nominal term? "Give us a fair time for the experiment!" shouts the free-trader whenever he is reminded of the utter failure of his scheme. But what is to be considered as a fair time? Are we to be taxed directly, and exorbitantly, for five years, in the hope that when these are over some ray of our former sunshine may revisit us? or are we to wait in patience, with a revenue yearly dwindling, until reciprocity shall arrive for the benefit of a future generation? The effects of the potato failure are now over, railway speculation has subsided, nothing stands in the way of free-trade to prevent us from participating in all its blessings. If the ministry have confidence in it, as they have over and over again professed to have, why do they seek more than the prolongation of the present tax for another year? They know why. In their hearts they are thoroughly aware, that they have been led astray by a phantom; or rather, that they have fostered a gross delusion for the mean purpose of obtaining power, and the tone which they are now compelled to assume sufficiently proves it. There is no vaunting this time – no gay and golden prophecy. All is black and dreary before them; and they are trembling at the account which they will be forced to render to the country. Weak in purpose, they have not the courage to confess their former folly; to own that they have been misled by the dangerous example of their predecessor; and that, by deserting the older financial system which regulated the affairs of this country, they are plunging the nation into unheard-of difficulties, and preparing for themselves an early, and certainly an inglorious fall.

Unhappy indeed is their position, for even the most discreditable section of their allies is upon the eve of desertion. Mr Cobden of course is frantic at the idea of the smallest addition to our armaments. He wants the country party to join with him in a crusade against the army and navy, and is kind enough to propose a coalition. There is very small chance of the gentlemen of England being found in any such dubious company. Betrayed as they have been, they form not only a compact party, but they have high and patriotic principles from which nothing will induce them to swerve; and they can well afford to wait the time when the country, writhing under misgovernment, shall demand the restitution of those principles through which it rose to greatness, and by abandoning which, it has perilled its prosperity and its power. They have no aspirations after office, merely for its sake. Those who have left them, and deserted their early faith at the bidding of a shifty leader, may now, perhaps, be mourning their folly, when they see the precarious tenure of the Whigs, and the disgust which they are universally exciting. The time is rapidly approaching when the eyes of the people will be opened; and when, by deliberately contrasting their present deplorable state with the prosperity which they formerly enjoyed, they will arrive at the conclusion that they have grossly erred in giving any credence to the doctrines of fanatical demagogues, or in consenting to the schemes of their abettors. In patience, but in confidence, let us abide the time. No man knows better than Mr Cobden in which direction the popular opinion is likely to set. He has had his period for delusion, and it is now nearly over. He is pleased to state that it is impossible in any way to recur to our older system; that even if we should be convinced of the falsity of the move, it is in vain to retract it; that nothing remains but a general attack upon the existing institutions of the country. Such language is rather ominous of the sponge, but the moral of it is unmistakable. It is Fagin's system. Once get a boy to pick a pocket, and he must go on until his career terminates at the gallows. There can be no relapse to honesty. Such an idea, to borrow Mr Cobden's own elegant phraseology, "is all sham and fudge!" Once let a woman lapse from virtue, and repentance becomes impossible; she must pursue her destiny till she dies in a garret or the hospital. These may be Mr Cobden's opinions, but they are not ours, and neither do we believe that they have received the sanction of the country. He seems at the present moment, to judge from the tone of his harangues, in the same state of excitement as the sailor, who, when the vessel is in danger, insists upon breaking open the spirit-room. He is determined to have free-trade for ever, let the experiment cost what it may.

One thing, however, is remarkable, and that is, that even Mr Cobden seems to have lost faith in the efficacy of his former nostrums. Neither at Manchester nor in the House of Commons does he attempt to explain the unaccountable absence of the vast benefits which he proposed to confer upon the nation. Probably he is wise in abstaining from any explanation which may draw attention to this subject. His attempt to get up a false alarm on the score of increased establishments, is not without adroitness, especially at the present time: but after all, it is a mere prolongation of his existence; he cannot hope to escape the penalty which is common to all false prophets – that of standing before his dupes in the character of a detected impostor.

However this matter may end, we have all a duty to perform. Those who think with us will do it fearlessly and frankly: without faction, but also without the compromise of a single principle. They will support the independence and the credit of the country from motives which Mr Cobden cannot understand, and which the leaders of the Whig party have not the courage or the manliness to avow.