410 



THE POPULAR EDUCATOR. 



possession of these resources, and the more really helpless is he 

 by himself against that violence which an efficient Government 

 represses. If the life and liberty of all are equally guaranteed 

 by the administration of law and the preservation of order, the 

 property which each person possesses is secured in proportion 

 to its amount, and therefore it is reasonable that property 

 should supply the funds for defence proportionately to its 

 amount, or, as I have said above, proportionately to the re- 

 sources of its possessor. The word "resources" is used 

 advisedly. 



It is impossible to tax what cannot be saved, without destroy- 

 ing the source of that from which all wealth arises labour. 

 They who earn must be maintained in their work ; they must 

 be supplied with the proper tools, implements, appliances, 

 which are necessary towards carrying on their calling. In order 

 to work, a man must eat, be housed, and be clothed. There 

 are very few occupations which do not require tools. In 

 some callings, the tools are very costly. So, again, the appli- 

 ances needed for carrying on a calling vary with the calling. 

 The usages of society allow an artisan to dress himself in a 

 coarse and cheap kind of clothing ; the same usages require 

 that a clerk in a counting-house, whose wages, maybe, are not 

 higher than those of an artisan, should wear a far more expen- 

 sive kind of dress. In the great majority of cases, the posses- 

 sion of a horse and carriage is a piece of voluntary expenditure ; 

 with a country doctor they are as necessary tools as a saw and 

 plane are to a carpenter. Instances could be multiplied to 

 prove the position, that it is impossible to tax necessary outlay, 

 unless to the destruction of the industry which is visited by 

 the impost. Hence there is always a stratum of society which 

 cannot be taxed ; for, assuming that its industry is in demand, 

 and that it earns no more by its industry than is sufficient to 

 support life, the abstraction of a portion of these earnings must 

 be followed by one of two things : either a certain number 

 of those who are occupied in the calling perish or are otherwise 

 taken away, or such an addition is made to the wages of such 

 persons as will be sufficient to make up the deficiency caused by 

 the tax. It has been long ago observed that when wages rise 

 and fall with the price of food, or rise and fall with the pressure 

 of taxation, the wages paid are only just sufficient to sustain 

 life. In India, the only tax which the mass of the people can 

 pay is the salt-tax, because everything else which they get by 

 their labour is necessary for their subsistence, and this is the 

 only article in which they can save. 



The greater part of the taxation of this country is levied on 

 consumption which people could avoid, and is therefore paid 

 out of resources which they could save. Thus, out of the total 

 sum raised in the United Kingdom by taxation, more than one- 

 half is got by customs i.e., duties paid upon articles imported 

 from abroad and excise, i.e., duties levied on articles produced 

 at home. Out of this vast sum, about one-eighth i.e., the 

 taxes levied on tea, coffee, cocoa, etc. may be said to be im- 

 posed on articles of necessary consumption ; for tea and coffee, 

 though not necessary to life, are so familiar that they could 

 hardly be disused. But the remaining seven-eighths are taxes 

 on intoxicating liquors and tobacco articles which people can 

 certainly do without, and which, in the opinion of many, could 

 be very advantageously dispensed with. Meanwhile, however, 

 a very large part of the revenue which the legislature collects 

 is derived from voluntary expenditure, or, as I said above, from 

 that which might have been saved. 



A great deal has been said and written on the comparative 

 merits of direct and indirect taxation. By the former is meant 

 an impost levied on property or income ; by the latter, a tax 

 put upon voluntary consumption. But all which can be written 

 or said on this subject resolves itself into two questions Which 

 is the most equitable form of taxation ? Which is the most 

 expedient ? Now it is plain that if indirect taxation is levied 

 on those articles only which are of voluntary use, no kind 

 of taxation can be more equitable ; because, both in quantity 

 and form, it takes from that which may be saved, and it takes 

 it with the full knowledge, and practically with the full con- 

 currence, of the person who pays it. The condition of using 

 such and such articles is that the use shall be burdened with a 

 contribution to the exigencies of Government, and the use is dis- 

 cretionary. Now it is impossible that an income-tax should be 

 equitable, because it is impossible, or at least it is said to be 

 impossible, to make any difference between industrial and spon- 



taneous incomes, still more between industrial incomes, the 

 necessary outgoings of which are considerable, and those, the 

 necessary outgoings of which are unimportant ; between, for 

 instance, the charges to which persons are put whose mar- 

 riage has been followed by a family, and those incurred by 

 persons who are childless. Nothing but the most preposterous 

 alarms about excessive population would induce any one to 

 characterise the latter state as fortunate, or a matter for public 

 congratulation. A man who brings up a family honourably in 

 the practice of virtue, and in habits of industry and thrift, 

 is, say what one will, a more valuable person than one who 

 has, either by choice or chance, no one in the world to call his 

 own. 



But the expediency of direct taxation has been frequently 

 alleged. It is said that it is undesirable, not to say immoral, 

 that the greatest part of the public revenue should be derived 

 from that kind of expenditure which is mischievous and destruc- 

 tive. To this it may be answered that the Legislature is not to 

 blame for the existence of those habits which lead to such 

 an expenditure, and that, if anything, it puts some check 

 indirectly on their indulgence. Nor is the reasoning, that this 

 kind of expenditure is precarious, and therefore may, on its 

 diminution, involve a collapse of the revenue, much more to the 

 purpose. When such a collapse arises, the deficiency can be 

 supplied from some other source, and notably from that which 

 would otherwise have been expended and now is saved. Again, 

 it is alleged that the costs of collecting customs and excise 

 duties are considerable, that the existence of a custom-house 

 service prevents the United Kingdom from becoming a free 

 port to the whole world, and that the interference of the excise 

 officer with domestic industry is a hindrance and a nuisance. 

 Much, however, of the force of this reasoning, whatever it 

 originally had, has been taken away by the fact that the objects 

 on which customs and excise are now levied are few and bulky, 

 and by the general decline of the practice of smuggling. 



Forty years ago nothing was more natural than the practice 

 of smuggling. There were hundreds of customs' duties, every 

 imaginable article of commerce being burdened by some tax or 

 other. Many of these duties were levied with a view of pro- 

 tecting some kind of home industry; in other words, the 

 English consumer was made to pay more for what ho wanted, 

 in order that some English producer might get a better price for 

 the articles with which he supplied the market. To smuggle, 

 then, was to rectify this partiality to relieve some persons from 

 the burden which the manufacturer had, through his interest in 

 Parliament, been able to impose on the public. But besides, 

 while the Government declared that smuggling was highly 

 criminal at home, it considered it patriotic and laudable abroad. 

 It was thought the highest wisdom to increase the exports 

 of the country ; and there is this very important truth in such 

 a view, that unless we sell, we cannot buy. Hence the British 

 smuggler was encouraged, or at least excused, if he contrived 

 to introduce British hardwares or cotton cloths into France 

 and Spain. People argued over and over again that the reten- 

 tion of, Gibraltar was necessary for the commerce of Great 

 Britain, because this fortress was conveniently situated for 

 smuggling British goods into Spain. But during the last forty 

 years, we have arrived at the conclusion that prohibitive duties 

 and protectionist regulations are no use to the persons in whose 

 favour they are enacted, and are a great loss to the country 

 which endures them ; and thus there is no political sympathy 

 with the smuggler, who has at last fallen into his proper posi- 

 tion that, namely, of a rogue who cheats the tax-payer, and 

 would put, were his operations generally successful, an unfair 

 burden on the honest dealer. 



A great deal of the taxation of this country does not come 

 into the imperial exchequer, but is levied and expended by local 

 authority. Such, for example, are the poor-rate, highway and 

 paving rates, rates levied for police and light, and county-rate. 

 It is the practice to value the property which the ratepayer 

 occupies, and to tax him according to this valuation. It is 

 supposed that though the occupier pays the tax immediately, 

 the person who ultimately pays it is the owner, who, it is 

 imagined, would be so much the better off in his rent if the tax 

 were not levied at all. But this position, though a question 

 too abstruse to be discussed in these elementary lessons, is not 

 by any means so clear as those who support it avow. 



A large proportion of this local taxation is levied for what 



