298 POPULAR SCIENCE MONTHLY. 



Income Tax. — The experience of tlie (British) Indian Govern- 

 ment in attempting to raise revenue from the taxation of incomes, 

 or by an income tax, is exceedingly interesting, and ought to be 

 most instructive to the people of other countries. As a rule, the 

 annual revenues of the Government of India do not and for a 

 lengthened period have not equaled its annual expenditures, and 

 the increase in the public debt of the country in recent years has 

 accordingly been very considerable.* The major part of this 

 debt, however, has been incurred for the construction of ordinary 

 roads and railways, which in turn have not been unremunerative, 

 and have made possible a large export sale of wheat and other 

 commodities, which before their construction was impossible. 

 The debt, or expenditures resulting in debt, has therefore con- 

 tributed greatly to the welfare of the people of India. At the 

 same time the demand and necessity for constantly increasing 

 expenditures, continually confronts the Government with the 

 most difficult problem of how to increase its revenue — a problem 

 that very recently has been threatened with increasing embarrass- 

 ment, owing to the position of not a few people in England, who, 

 with more of sentiment than discretion or knowledge, have 

 opposed the continuance of the present governmental monopoly 

 of the production and sale of opium. A large increase of taxa- 

 tion in any form is regarded as not feasible in India ; not so much 

 because of an unwillingness on the part of the people to pay, for 

 they are accustomed to pay all dues which they regard as fairly 

 claimable by the sovereign power, and more especially when the 

 demand is accompanied with control of force ; but by reason of 

 the extreme poverty and consequent actual inability of the masses 

 of the people to pay. Experience has, moreover, shown that the 

 natives of India are particularly opposed to all forms of direct tax- 

 ation, other than on land, and more especially to taxes on houses, 

 vehicles, and trades ; and so extreme are their prejudices in this 

 respect that any new levies of such character are only imposed 

 by the Government with the greatest caution. 



Something in the way of an income tax, exempting all incomes 

 derived from agriculture, was probably imposed by some of the 

 old-time native rulers of India. But the first attempt on the part 

 of the British Legislative Council of India to revive such a form of 

 direct taxation was made in 1860. What followed is thus forci- 

 bly set forth in a speech by Mr. Hope, before the Council, in 

 January, 1886 : 



*' Instead of a native model for direct taxation, softened and 

 adapted to our circumstances, we unfortunately set up that of the 



* For the year which closed on March 31, 1896, there was an estimated surplus of about 

 9,500,000 rupees. 



