PRINCIPLES OF TAXATION. 377 



doned the idea of assessing an income derived from multiple sources 

 as a wliole to one taxpayer, and in place divides an assessable income 

 into schedules according to its source; and, in fact, has given to 

 such a system the popular designation of " the stoppage at source 

 plan." Thus at present the sources of income in Great Britain are 

 classified as pertaining to one or more of five schedules — designated 

 as A, B, C, D, and E. For example, the profits or income derived 

 from agricultural industry are classified as under schedule A, and 

 those from manufactures, mines, gas works, and water supplies under 

 schedule D, and the like; and it is only in schedules A and D that 

 the income receiver must make a return of agricultural, mercantile, 

 or manufacturing gains or profits.* 



* A recent mimber of the London Times reports the following additional illustration of 

 the ingenuity of the people of every country subject to an income tax to evade the payment 

 of the same. 



" There is an argument in favor of the separation of the incomes of married couples 

 for the purpose of income tax which has not yet been advanced. It is the immoral state 

 of the law as it stands at present. John and Mary, each possessing incomes of less than 

 £500, but in the aggregate exceeding that sum, agree to live together as a certain 'ad- 

 vanced ' couple did who made themselves notorious only a short time since. They are both 

 entitled to relief under the act Should they, however, legalize their union, neither is en- 

 titled to any rebate, and they are actually taxed for rendering themselves respectable mem- 

 bers of society. And this is in moral England." 



In the earliest of Mr. Gladstone's budget speeches, that of 1853, he distinctly refused, 

 while admitting that a great deal might be said in favor of taxing incomes at different rates, 

 according as they proceed from property or from skill, to break up the income tax into 

 classes, and to make a difference in the assessment according to the source from which the 

 income was derived. Mr. Gladstone's argument, in this instance, applied to the difficulty 

 of discriminating between the various degrees of the durability of incomes ; but his definite 

 refusal to " vary the rate of the tax according to the source of the income " — on the ground, 

 to use his own words, that " I think that I should be guilty of a high political offense if I 

 attempted it " — may suffice as a sufficient expression of his opinion in favor of a propor- 

 tional system. In a recent number of the Nineteenth Century Mr. Gladstone referred to 

 his budget of 1853, in which he continued his income tax, and to his proposal, in \%14t, to 

 carry on the national finance without its assistance. He refers to the preparations made, 

 through successive reductions of the tax, for its ultimate abolition, and observes that " in 

 1874, for the first time since 1845, the opportunity arrived. The nation liad its opportunity 

 and took its choice. It may have been wise or unwise ; but it was made by competent author- 

 ity. The result is told in our present expenditure." 



In general discussions on the mcome tax, especially those which have characterized the 

 financial debates in the British Parliament, the proposition has been often advanced that 

 it is a hardship that incomes arising from the exertions of a man's brain should be charged 

 at as high a rate as those resulting from invested capital ; and during the present Parlia- 

 ment (1896) a motion was made by a leading member that the financial committee of the 

 House may have permission to amend the assessment in such cases. In a dtbate which 

 followed (instituted by Sir John Lubbock) it was stated that " while there was an 

 immense difference, no doubt, between the two classes of incomes. If extreme cases 

 were considered, they nevertheless passed the one into the other by imperceptible 

 gradations. Nor had any satisfactory treatment of investments ever been suggested. 

 Let them take one class — the securities of foreign nations. Some were excellent, others, 



