^ ON THE ASSESSMENT OF DIRECT TAXATION. 85 



outgoings of the source of income, be it labour or land, is merely to confine 

 the tax to its own stated objects, viz. to income proper ; but to exempt or 

 lo^Yer the rate on this income proper, merely in consideration of the personal 

 status of its owner, is to travel into quite a different region — it may be into 

 the region of national charity, or into that of some other pi'inciplc, but 

 assuredly far away from that of equality in taxation. It may be added that 

 such exemptions, even when admitted, need a common measure of value for 

 their rational application. There are small incomes and small incomes — 

 incomes that are pure interest-values, incomes that are pure drafts on capital, 

 and incomes that are mixtures of interest- value and draft on capital ; and 

 the equal exemption of these kinds, as in the present income-tax, is as un- 

 equal as would be their equal taxation. As before said, the interest-value 

 measure itself would exempt all small labour-incomes to the extent of their 

 necessities without further special rule. 



Beaeings of Common Measttee ov Value on General Taxation and 



National Income. 



11. Common measure of value necessary to tlie adjustment of general tax- 

 ation : fallacies from its absence. — " Your Committee also feel that it would 

 be unjust to make any alteration in the present incidence of the income-tax, 

 without at the same time taking into consideration the pressure of other 

 taxation upon the various interests of the country, some of it imposed by recent 

 legislation, and in one case especially, that of the succession duty, to some 

 extent by way of compensation." This, written in 1861, is the last sentence 

 of the Eeport of the Select Committee appointed in that year on the equa- 

 lization of the Income-tax ; and perhaps no paragraph could be qiioted as a 

 stronger argument for the necessity of determining a common measure of 

 value. It may, indeed, be thought by some that for the j)urpose of internally 

 equalizing a tax over its own area, be that area sugar, coffee, or incomes, a 

 preliminary inquiry into the pressure of taxation in general is somewhat of 

 a work of supererogation ; and it may not be mathematically obvioi;s to 

 others what possible sort of compensation can exist between the inequalities 

 of a tax, or a set of taxes, that are almost stationary, and those of one that 

 changes with every national emergency — that in twenty years has actually 

 compassed the extremes of sixteenpence and twopence in the pound, with 

 every variety of intermediate oscillation. But assuming it to be advisable 

 for the purpose in question, as it must doubtless be always generally useful, 

 to know the comparative pressure of taxation as a whole upon the interests 

 of the country, it is clear that such a knowledge implies their valuation 

 through a common measure, and is, indeed, as impossible without it as would 

 be the knowledge of the weights of different things without weighing them 

 by a true balance. Eminent statists have, indeed, attacked this problem, 

 using income itself as the means of the comparison, though oftentimes without 

 a sufficient preliminary examination of the accuracy of their instrument. 

 Comparing the statistics of different classes of income, as collected from the 

 government returns and from inquiries specially made, with the statistics of the 

 corresponding classes of taxation, they have sometimes concluded that general 

 taxation is, as a whole, tolerably equal. The truth of this conclusion evidently 

 depends upon the uniformity of the standard employed. As, however, this 

 uniformity has no existence (the government returns alone presenting at 

 least five or six different modes of estimate), the argument can prove nothing 

 as regards general equality, except its absence ; but does prove that taxation 



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