of lord Dorchester and the other commissioners of accounts appointed after the American war, and that they had done well to send with each army upon foreign service a commissariat establishment to manage and superintend the accounts of expenditure at the time and upon the spot. But nevertheless all these accounts must ultimately come before the auditors here, whose establishment, however well it might be suited to the transactions of peaceable times, was utterly incompetent to the accounts of a war upon so extended a scale as the present; and he therefore advised the House and his majesty's ministers to consider whether it would not be a measure of economy rightly understood to follow the precedent so frequently resorted to during the present century, by appointing an auxiliary commission for the sole and express purpose of auditing the war accounts; and that past experience, joined to present observation, would suggest many very useful regulations for giving a better effect to the whole system of passing the accounts belonging to extraordinary services. The present bill, however, he submitted to the House, as introducing a material improvement in the law of the Exchequer, and as a measure just in itself towards the public, and unjust to no man. Sir J. Anderson seconded the motion; and Mr. Tierney and the Attorney General strongly expressed their approbation of the bill. Leave was given, and the bill passed its several stages without opposition. Debate on Mr. Tierney's Motion to limit the Duration of the Income Tax.] June 5. Mr. Tierney said, he rose to move for what he had called in his notice a Repeal of the Income tax, but which he did not now wish to have understood in those terms. He rather might be said to rise to move for leave to bring in a bill to limit the Duration of the Tax on Income. His intention was merely to fill up the blank in the bill now before the House with the words 5th of April 1801, and to allow the tax to continue till that period. Supposing the House should adopt his motion, it would still be competent, if the circumstances of the country required it, for any member to move for its continuance another year; for although his opinion was, that this mode of raising the supplies within the year was not only not available, but even if it were so, that its advantages were materially overbalanced by its attendant evils, yet he should have no objection to voting its continuance another year as a war tax. He considered it a tax which, like all other war taxes, ought to be voted annually, and in no other way. He was actuated by two motives in bringing forward his motion at the present moment: first, he wished to have the sense of the House on so important a subject previous to its separation in its collective capacity, and to avail himself of the opinions of the individuals composing it: his second and principal motive was, that he might expose a system of finance wholly inadequate to the purpose intended to be answered by it; and that he might show those who purchased into the public stocks of the country what their real situation was. Such were the grounds of his motion; but he was aware that he should be asked, why he wished to get rid of this tax altogether? His answer was, that it was a tax he had always been an enemy to. To the principle of raising a large sum of money within the year, he was ready to subscribe; but he was inimical to that principle being carried into effect through the medium of an income tax. It was a bad mode of raising the public money. This opinion, it might be said, was the result of prejudice: true; and for that reason he should not have held himself justified in taking the present step, if he had not other grounds. The chief of these grounds was, that in consequence of the circumstances that had taken place in the course of the present session, the tax was no longer the same tax it was originally stated to be. The chancellor of the exchequer, in 1797, had conceived the project of abandoning the old funding system in order to raise the supplies, and to determine that a new system should be had recourse to, namely, that, in every year, a large sum of money should be raised within the year, by an arbitrary mode of taxation, determined by the amount of assessed taxes paid by each individual. The sum proposed to be raised originally by the assessed taxes was 8,000,000l. within the year. The measure had failed of producing that sum. The produce of the tax, with the operation of the different modifications, was 44 millions, and with the voluntrary contributions, was, he believed, raised to 6 or 7 millions. The right hon. gentleman, in the next year, thought fit to adopt a new mode of taxa- | 1799 fourteen millions, and in 1800 tion, and to shift his criterion of property. thirteen millions to the debt of the counThe former criterion was expenditure; try. Was any thing beneficial then, to under this new mode, it was income; and be expected from a system, the pretence the principle upon which it proceeded for which was, that it rendered permanent was, that whatever the income of an in- burthens on the country unnecessary? dividual was, he should pay a tenth of it The tax for the present year, the chantoward the public supplies. The produce cellor of the exchequer had stated at of this tax was estimated at ten millions. 7,000,000l.; but at the time he had so The chancellor of the exchequer, to con- stated it, he had a bill in contemplation, vince the House of the solidity of his in order to produce that sum. That bill system, had last year placed on the had been brought into the House in silence Journals a resolution, which stated, early in the present session, and taken "that the produce of the tax on income away in the same manner. It had been was originally estimated at ten millions, said, that by the operation of that bill the and that it was important that measures deficiency of the former one would have should be taken to render it productive been made up. It contained some severe to that amount."* Thus, in order to clauses with regard to the merchants. It give solidity to this favourite system of was proposed, that they should be used finance, it was necessary that ten millions in the same manner as other men; that should be raised within the year. If ten their commercial commissioners should be millions could be raised, the arguments taken from them. The deficiency was with which he combated the tax would now to be made up, by an increase on fall to the ground; but, in proportion as farmers and occupiers of land: with reit fell short of producing that sum, they gard to the farmers, he believed the bill, were strengthened; and the question was as it now stood, would operate as a drawwhether the chancellor of the exchequer back as to the small sum required of them; was justified in persisting in a tax which but if owners and occupiers of land were neither had produced nor could produce to be taken into the account, it might the sum stated to be indispensably neces- have some effect. The actual produce of sary to ensure its successful operation. the tax was not much beyond 3,000,000/. Upon the deficiency in the produce of the Ought a system attended with so many assessed taxes, great expectations were inconveniences to be pursued? It was formed of the result of the voluntary con- also to be considered, that on the produce tributions; but at present no one dreamt of this tax there was already 13,000,000l. of voluntary contributions: they had dis- mortgaged. Was it, then, too much to appointed the expectations formed of say that the system had given way? them; and unquestionably would again, The chancellor of the exchequer might if resorted tỏ. In 1799, instead of ten maintain that his present plan was an millions, which had been stated as neces- excellent one. Let it be so or not, it sary to carry the system into effect, it had was quite a different thing from that which produced only about 5,800,000l. In the he had originally induced the House to present year, the estimate was, that it sanction; and not the least part in whieh would produce 7,000,000l. Taking the it differed, was that which related to its three years, 1798, 1799, and 1800, this duration. The probable duration of the tax, which, to have any beneficial effect, tax would extend to the year 1810. Had was estimated for each year at 10,000,000l. the right hon. gentleman intimated that, would produce not much above 15,864,000l. would not the House have rejected it? exclusive of the voluntary contributions. It had been considered merely as a meaThis was all the advantage the public had sure of a temporary nature, and it was derived from the operation of this system under that impression that it had been of finance. It might have been expected, so readily assented to. But, perhaps, it that this tax would have precluded the ne- might be urged, that this was not a percessity of adding to the public debt. In manent tax? What was meant by a per1797, the minister proposed his system manent tax? Surely, a tax which he of raising the supply within the year. should not see the end of in the course of He kept his word with the public; his life he had a right to consider a perbut in 1798 he added eight millions, in manent tax. For all the inconveniences with which the present measure was fraught there was but one remedy; that * See vol, 34, p. 1152. That the country was able and willing to pay the tax, might also be asserted; but let it be remembered, that there were few men possessed of property that had not something in hand for an emergency. Great would be the difference through ten years, when men called to their view the duties they owed to their families. He then proceeded to prove, that it acted with the severity of a tax upon capital, though laid upon income; and from this inferred its cruelty and oppression. It was a constant outgoing to every person in the country; and it was only on the funds that it could have a beneficial effect. On that ground alone, then, he should think himself justified in proposing to limit its duration: but, exclusive of this objection, the tax was radically bad. There was a great difference in 1,000l. a year from landed property, and from sources that were not disposable. The latter admitted of a variety of degrees and different amounts in value. A man of 501. a year landed estate might be a good father, and yet spend the whole of his annual income; not so with a man who derived it from trade or profession. If, then, such a system should become permanent, this must cease to be a country worth living in, as one in which the blessings of liberty could not be enjoyed. It was a system which could only be carried into effect by spies and informers, and as such unfit for a free country. There was to be an addition of 99 inspectors to the former, for the purposes of this tax. He wished to avoid harsh expressions when mentioning those persons; they were good-looking men, dressed in good cloaths, selected from the tax office for their acti vity and vigilance. But what were their habits, and what had been their employments? They were persons whose duty it was to go about and see the number of servants, horses, dogs, &c. that each man had and to make a true return; in this it was their interest, as well as duty, to be keen and active. These were the persons that were now to inspect men's properties, and to get at the truth by getting at the secrets of every man's affairs. How was this to be done? By cajoling, corrupting, and bribing the clerks and domestics of the respective houses they wished to examine; actions for which a man ought to be hooted out of society. This, then, was not a country for an honest man to live in. It was a country, not for men of plain and honest feelings, though it might be remedy was to raise the ten millions within the year. It was not possible to raise such a sum within the year by a tax upon income, nor was it even probable that it could be raised to seven millions. It was, then, for the House to say, whether they would proceed in a system which, in the course of the two years that it had been tried, had developed itself to be as weak and futile as he had described it. The chancellor of the exchequer had admitted that the sum necessary could not be raised by the present measure. Was it too much to ask him not to persist in a system which would not produce 7,000,0007., and of which he could not regulate the collection? If he did persist, he would justly incur the charge of obstinacy, as he would be carrying it on with the conviction, that it was not likely to be attended with those advantages which he had originally conceived would result to the country. His prudence ought to induce him to abandon it. As the tax now stood, it was not such a one as the chancellor of the exchequer had pledged himself to the House it should be. He trusted he had made out a strong case as to the failure of the tax: he had not arraigned the original system of raising a large sum of money within the year-it was not that he disliked the original stock, but the bastard scion that had sprung from it. It had no other object than that of raising the funds. It had been stated, that it would operate to the relief of the public credit; he admitted it would so far operate to its relief, that at a peace the commissioners for paying off the national debt would be enabled to lay out eleven millions instead of five. The operation of the tax in raising the funds was to begin, not in time of peace, but in time of war. He was persuaded, that at the return of peace, it would have a considerable operation upon the funds. There were many foreigners who had money in our funds, which they had advanced at a low price. Was it proper to enable them to get out of our funds, at the return of peace, a considerable advantage, by the operation of such a plan as this? He did not mean to deny the chancellor of the exchequer's knowledge of finance; he allowed him to possess very eminent talents in that line; but this he would assert, that no part of his fame would rest upon this system of finance. The right hon. gentleman would say, no doubt, that the revenue flourished, he admitted it; but it was owing to the war. those who had shown a zeal for their country, to be treated harshly by it. He would maintain, that transferred property was not the same in spirit as it was in substance; for upstart wealth assumed a different character. An estate trans for placemen and pensioners. In these observations he did not allude to the past conduct of these inspectors. He | only meant to say, that, to fill their office effectually, they must wade through the dirt, and descend to the most shameful practices. Against the commissioners hemitted from father to son, carried in its had nothing to urge, they were respect- course certain duties and obligations which able men; but the present description of were attached to it, and which in the them must dwindle fast away. It could transfer altered their condition, and were be no situation for a gentleman, that destroyed. Hence might be inferred, would oblige him to hold daily commu- that change which the manners of the nion with spies and informers. He was community must undergo, and a change, certain, that in the course of ten years he dreaded, much for the worse. It was the whole description of commissioners on motives such as these that he called would change, and the office would pass upon the House to agree in the motion into the hands of low and sordid men.- he had to make. He did not desire to He further observed on the operation of derange or to embarrass. His object was, the system of taking the tenth of every to preserve the balance and well-being of man's income. It impoverished the middle | the community. Should he, however, fail class, and advanced those only in trade in his motion, some good would still who could put the additional burthen on follow; it would operate as a notice to the article in which they traded. Under people of small fortune to change their this consideration, he trusted the House mode of living, as they would be unable would pause before they suffered the whole to maintain their rank in society. All he community to be oppressed. In the edu- asked was, that on the return of peace cation of their children, what could parents they might be allowed to retrieve, by now do? On looking to the gentlemen of economy, the ravages which war had the army and navy, was it honourable to made on their properties. Under the take from those who had served their present system, no retrenchments could country, the tenth of their income for set them to rights. They had no resource the remainder of their lives? Such was but to quit their rank in society. He the depreciation money had undergone, then concluded with moving, "That that 700l. a year was better before the leave be given to bring in a bill to war than 1000%. now. The consequences limit the Duration of the Tax upon Inwould be visible in the orders of the church and the magistracy: those offices would lose much of their respectability, because they would not be discharged as they were used to be. The gentry who possessed from 1,000 to 1,500. a year, and who kept their carriages and horses, were driven into little towns for shelter; and the middle class, which formed the most respectable part of society, were likely to be soon extinguished, ground down by the oppression of this tax. When that class was destroyed, the best class of subjects would be annihilated. They filled that order in the state which placed them too high to be led away by wrong opinions, and left them sufficiently low to have a fellow-feeling with the great mass of the people. But the right hon. gentleman would say, that all this was but a transfer of property: that he admitted, but he denied that it was beneficial to the country, because it did not go, in its transfer, to pay off the sums we had borrowed, but to enrich individuals: and it was hard on come." Mr. Pitt said, that one radical error pervaded the whole of the speech of the the hon. gentleman, that of supposing the tax upon income was imposed by a wanton spirit of innovation by those who had argued it as a measure of finance, and without a sufficient ground appearing of its necessity. When we were called upon to meet an extraordinary exigency for which the funding system was not of itself sufficient, it would be idle indeed to expect that such a confluence of difficulties as we had met with could be overcome without extraordinary exertions: he be lieved, however, that the measure which the legislature had adopted, would in its matured state, surmount the difficulties; but even in its present imperfect one, it would go a great way towards that desirable end, and was a measure superior in its nature to any system of finance that had been adopted in this country, in point of prudence, policy and justice, as well as of efficacy. It had been maintained, that to attempt to raise so large a portion of the supplies within the year would materially diminish our prosperity as a commercial nation, by impairing the sources of our finance. The best answer to this was, that the experience of three years had shown the direct contrary of these confident predictions. The hon. gentleman had urged the inconveniences which must arise from the tax on families of moderate income, and particularly on the middle class of the gentry. He had also stated, that the operation of this bill, was to reduce a person of 1,000l. a year, to the state of one formerly at 700. But the real question, in considering the policy of the income tax, was, whether, if the same sum were to be raised within the year by faxes on articles of consumption, they would not be more severely felt by the consumer than this tax was? Most clearly it would, because it would be impossible to lay any tax on articles of consumption, without more going out of the pocket of the consumer than came into the exchequer. Then how did the objections to this tax apply to the proprietor of land more than to any other gentleman, or to the middle order of society? What was the option of the legislature? Either to take this method of taxation; or recur to the old system of taxation on articles of consumption; or reject the idea altogether of raising a large sum of money within the year, and thereby put an end to the contest in which we were so necessarily engaged. When he first moved this subject in the House, that his object was, to raise a large sum of money within the year, was most true; that he had stated it to be his hope that it would produce ten millions a year, was true also; that it had fallen short of that sum was equally true; but what was the inference? We were in hopes of ten millions; we had seven out of the ten and the hon. gentleman insisted that all the solidity of the principle was gone; since it had produced only seven-tenths of its estimate. He contended, therefore, that the arguments of the hon. gentleman upon that subject were not conclusive, and that the experiments hitherto made upon the income tax were not sufficient to enable us to judge of its final amount. This system had produced less than its estimate, and yet it had worked a great change to our advantage, and had revived and animated the hopes of the rest of Europe. Its failure to produce the whole was, in[VOL. XXXV.] stead of an argument against the principle very strongly in its favour, since nothing but the excellence of the principle could possibly be inferred from a measure which produced such beneficial effects. He then proceeded to observe on the probable effect that the borrowing all the money which had been raised for the three last years would have had upon the public funds, if the old system had been adopted. In the course of the last three years the manner in which money had been borrow ed, had produced to the public, in comparison of what must have been the effect of borrowing on the old system, not less than 24,850,000l.: this was among the advantages that the public had already obtained by a measure which was called inefficacious. The hon. gentleman, had said that the income bill tended to rise, unduly, the price of stock, at the expense of the landed interest, after the war was over. If the hon. gentleman thought that this bill would be the effect only after the war, he ought to have confined his motion to that subject, but his motion went to take away the effect of this system, whether the war continued or not. He was much deceived, if the House had any idea of acceding to such a motion. It should, at all events, be deferred to a period of peace; and then the House would consider whether it would continue the measure; and if it did, under what modifications, and to what extent. He did not call this measure, although adopted by parliament, a pledge that it should be continued for any given length of time; it was not in the nature of a bargain, that this system should at all events be continued. The hon. gentleman had contended, that this system was favourable to the monied men, and allowed to the money lenders exorbitant profits. Now, how did the fact stand? Why, that, considering the state of the funds, the bargains made for loans since this system began to operate, had been more beneficial to the public than at any former period. If to wish to raise the funds, and to be instrumental in effecting it, was a crime, he was ready to plead guilty to the charge. At the same time, he must say, that those who profited bythis were not the moneylenders, but the nation at large. It would be a violation of common sense to say, that any landowner could be so situated, as not to have a direct interest in the value of the funds; an indirect interest every individual had. The lower the interest of money was, the [Z] |
