220 report— 1878. 



Report of a Committee appointed for the purpose of further de- 

 veloping the investigations into a Common Measure of Value in 

 Direct Taxation, the Committee consisting of the Right Hon. J. Gr. 

 Hubbard, M.P., Mr. Chadwick, M.P.* Mr. Morlet, M.P., Dr. 

 Farr, Sir George Campbell, M.P., Mr. Hallett, Prof. Jevons, 

 Mr. Newmarch, Mr. Shaen, Mr. Macneel Caibd, Mr. Stephen 

 Bourne, Prof. Leone Levi, Mr. Hetwood, and Mr. Hallett (Sec.) 



I. Your Committee presented to the British Association a first Report 

 of the results of their inquiry on this subject in 1876. In this inquiry, 

 following ordinary usage, they took income as the basis of their examina- 

 tion. They found, however, that in sundry jiroposed systems of common 

 valuation and assessment on this basis, incomes were sometimes considered 

 in themselves independently, sometimes in relation also to their owners. 

 The first consideration was directed to the real nature and constitution of 

 income, as the annual value, product, profits, or receipts of, or from, 

 some given source, whether land, labour, or capital. The other considera- 

 tion was directed to the income's relation to personal circumstances, or 

 in other words, to the owner's position in the scale of riches and poverty 

 .as determined by his possession. Assessment on the former principle 

 would vary with the positive value of the income, on the latter it would 

 vary with the value of the income qualified by the individual condition of 

 the owner — his individual tenure for example or his individual necessities. 

 £1,000 a year from land held on a short tenure or subject to large family 

 claims, would on the latter view be differently assessable to the same 

 income held on a long tenure or not subject to these claims, whilst on 

 the former and sounder view the two assessments would be the same. 

 The Committee in dealing with the subject referred to them, confine their 

 attention to the income's positive value. Positive value is the professed 

 Tjasis of the present Income Tax, and were it possible to adjust an Income 

 Tax to differences of individual tenure and necessities, as well as to 

 differences of positive value, some uniform method of comparing and 

 measuring the positive values of incomes would still be essential. It is 

 impossible to estimate the relative effect of incomes upon different in- 

 dividuals without first knowing their values considered in themselves. 



II. But the equal assessment of incomes according to positive value 

 demands a common measure of value, and legislation, in the absence of 

 such common measure, must act on a mere nominal equality which often 

 involves it in a real and gross injustice. £1,000 a year from perishing 

 labour, — that for instance of a barrister or physician, — is taxed equally 

 with £1,000 a year from permanent land. The question then presented 

 itself, " how does the difference between nominal equality and true equality, 

 or as it might be called, the difference between nominal income and true 

 income arise, and how is it expressible ? " The Committee considered 

 that this difference was universally resolvable into the extent to which 

 the production of an income involved the expenditure of its source's 

 value. Labour, land, houses, and other great sources of income, are 

 more or less consumed, impaired, or diminished — some more, some less, — 

 in producing income, and this varying diminution in the source's value 

 appears as a more or less enlarged income and makes it of more or less 

 nominal worth. Such nominal income is in fact a mere mixture of true 



