TRANSACTIONS OF SECTION F. 745 



o 



quantity ou thp eighteen commodities (being 51 per cent, of our total export) 

 holds good for the rest of our export, we haye an annual average increase of quan- 

 tity exported per head of population of nearly 9 per cent. 



Prices of imports having fallen more in the period under review than prices of 

 exports, the comparatively small total increase in value exported is not of substan- 

 tial importance if the increase of quantity is satisfactory, as it is this latter factor 

 which denotes the amount of employment found for our people by this branch of 

 trade. 



Another objection to relying on comparisons of value is that the returns under 

 this head are probably inexact to a considerable extent both for imports and 

 exports, and although the error may partially correct itself over large quantities, 

 comparisons of the details of the trade are at all events on this ground unsatis- 

 factory. 



The error both in imports and exports is probably a growing one, owino- to 

 increasiug laxity, and also owing to the growth of the export business now done on 

 a C.I.F. basis, which exports would appear to be largely entered for Customs pur- 

 poses on a C.I.F. valuation instead of an F.O.B. valuation. 



The probable extent of the error is a subject which might be investigated by 

 the Chambers of Commerce of this country. 



The error on graded qualities of such imports as wheat and cotton is probably 

 .small. Customs authorities being alile to fairly well control these valuations. 



Of the eighteen commodities selected eleven have increased in quantity over 

 1890-99 as compared with 1870-79 : these are woollen and worsted yarns, spirits, 

 copper ingots cakes and bars, cotton goods (bleached and unbleached), cotton goods 

 made of dyed yarns, ' dyed and printed,' cotton yarn, and coal. 



In one or two cases, however, notably in yarn, the comparison between 1890-99 

 and 1880-89 is not so satisfactory. 



One commodity, namely, pig and puddled iron, has remained stationary, com- 

 paring 1870-79 with 1890-99 ; and over the same period woollen and worsted 

 tissues, rails, bar angle bolt and rod iron, linen yarn, linen piece goods, beer, and 

 ale show decreases in the average annual quantity exported. 



3. The Theory of Progressive Taxation. By G. Cassel. 



Expenses which are made in the general interest of the State, and which are 

 not to the particular advantage of any special group of citizens, must be paid for 

 by taxes according to the ' Priuciple of Ability,' of which the income-tax mio-ht 

 be regarded as the type. But in the parliauientary state, where the interested 

 classes are voting the taxes themselves, this cannot be enforced unless the income- 

 tax is so constructed as to cause every class of taxpayers an equal sacrifice. 



Equal sacrifice means deduction of such part of the income which is necessary, 

 not only for the physical, but also for the economic, the professional existence of 

 the taxpayer, i.e., deduction of the ' necessaries of efficiency ' (Marshall), and taxing 

 the remainder of the income at a constant rate. 



Every progressive scale of taxation can be obtained by the method of grantino- 

 tax-free deductions to the different incomes, and taxing the remainders at a constanl; 

 rate. Thus there is no difference in priuciple between a progressive and a ' degres- 

 sive' scale. And we need, in the theory of progresfive taxation, not discuss any 

 other question than what different deductions shall be allowed to the different 

 incomes. 



The subject of the discussion thus fixed, we proceed to apply the Principle of 

 Equal Sacrifice, interpreted as above. For everyone who accepts this principle 

 the whole problem of progressive taxation reduces itself to the question : What are 

 the ' iiecessaries of efficiency ' for each class of the society ? But in the limits 

 thus given to the discussion there is room enough for very divergent views, from 

 the conservatiye one which thinks the real necessities of the labourer to be very 

 small, and which leads to a nearly proportional taxation, to the modern democratic 



