THE BUDGET FOE 1853-54.

Lyttelton Times, Volume III, Issue 140, 10 September 1853, Page 8

THE BUDGET FOE 1853-54.

The Chancellor of the Exchequer, in a speech of nearly five honrs' duration, made an exposition of the financial state and prospects of the country. The first portion related to the accounts of the revenue and expenditure. In April, 1552. Mr. Disraeli, he observed, had estimated the revenuefortheyearat£sl,62s,ooo which in Dec. he increased to £52,325,000, and at the end of the year the amount was £53,059,000, an increase of £1,464,000 on the estimate framed at the commencement of the year. The expenditure was estimated in April, 1852, at £51,163,000, but the actual expenditure was only £50,782,000. The balance-sheet showed an actual surplus of £2,460,000 ; but, before considering the amount available for remission of taxation, it was necessary to examine the estimated expenditure for the year just commenced, which amounted to £52,183,000, so that three-fifths of the surplus was disposed of by charges for liabilities under act of Parliament and votes for the defences of the country. He stated the amount of increase in the different estimates, and the additional charges for the militia* and for public education, with the estimated savings, and he then detailed the particular* of the revenue anticipated for the year 1853-54, amounting to an aggregate income of £52,990,000, leaving an apparent surplus of £807,000, which he would rather take at £700,000, and of this sum, about £220,000 consisted of money which did not proceed from permanent or recurring sources. After a passing allusion to the shipping and West India interests, he adverted to the Exchequer Loan Fund, which it was not, he said, the intention of the government to abolish, the fund having realized, after paying all expenses, a net balance of £227,000 ; and he then approached the discussion of the Income Tax. The first question, he observed, was whether or not the tax should be parted with at once. He did not say that this was impossible ; he believed "by the imposition of certain other taxes, which he indicated, that this tax might be got rid of; but the Government did not recommend such a course. The amount of the tax—five millions and a-half—large as it was, did not afford, he said, an adequate idea of the magnitude of the question ; and he described at some length the powerful effect which this tax, had it been resorted to at an early period of our fiscal difficulties, would have had in keeping down the accumulation of debt. From the calculations he made he deduced a proof that, if the efficacy of this great engine were not destroyed, it would afford us the means, should hostilities unhappily break out, of at once raising an army of 300,000 troops and a^ fleet of 100,000 seamen, with other auxiliary aids, that would put this country in a condition to defy the world. Forty years ago, at a period of violent struggles, it enabled this country to raise an income above the expenses of the civil Government, and in 1542, in a time of peace, its giant aid produced as remarkable results, and it might now assist us in completing the reform of our commercial system and with ours that of other nations. Assuming, then, that in the view of the House and of the Government, it was not consistent with a due regard to the public interests to dispense with this tax, he acknowledged that, in his opinion it was not well adapted to be a permanent part of our fiscal system, unless its inequalities could be removed, the attempt-to effect which would open social questions of some importance, and the evils of the inherent principle of self-assessment could never be satisfactorily corrected. Although called a tax, it was more nearly a code or complicated system of taxaOnA ft If he took the total receipts of the tax at t°,^n'^ 0 ' one-'wenty-eighth-part would be £,200 000. ISow, lands and houses under schedule A paid no less than £2,400,000 or twelve twenty-eighths of the whole tax • and trades paid £1,800,000, or nine-twenty-ekrhths: so that these two together paid three-fourths ot the whole tax, while professions paid about one-twenty-second part. It had been said that the same rate of tax ought not to be levied on precarious and realized incomes ; but what were precarious and what realized ? The rela tion between the payment on lands and trades •would go a great way to solve the difficult' question as to the justice of the tux. The real tax, he would show, was paid by the lam] and houses. They paid 7d. in the pound uniformly on an income not assessed by the possessor, and without the smallest deduction

in respect to the difference between gross and net income ; whereas, if the present scheme of the tax was broken up, allowance must be made for repairs, insurance, law expenses, cost of management, arrears and abatements of rent. Taking this deduction at 16 per cent, upon £80,000,000, the gross income, it would be reduced to £67,200,000, which really bore the £2,330,000, the amount of the tax under that schedule. Then there were mortgages and settlements, which would reduce the income by at least £20,000,000, leaving it only £47,200,000, the net receipt of those beneficially interested in the lands and houses; so that the rate of the tax upon this species of property was 9d. in the pound, trades paying only 7d.-—a proportion nearly equal to the 7d. and 5i proposed by Mr. Disraeli. If the basis of the tax were to be broken up, there would be a war of classes, and it was difficult to see where it would end. It had been said that the fair proportion which land [should bear to trades was as four to three, and that was the relative proportion of the tax at present. As to the averaging of classes among themselves, he insisted that this was impracticable. Some trades were better than perpetuities, while others were not worth three years' purchase. Moreover, trades paid 7d. upon an assessment made by the parties themselves ; and Mr. Gladstone mentioned a case in which the incomes of 28 persons, actually amounting to 48,159/. ayear, had been returned at only 9,000/. As regarded the state of the case between land and trades, therefore, there was no sufficient ground for attempting to reconstruct the scheme of the tax. With regard to schedule C, including fundholders, he appealed to the House whether, if that schedule stood alone, it would not be an argument against breaking up the tax. Some rational construction must be given to the words of the Loan Act. The proposal to levy the tax upon the capitalized value of the income was one which could not with honour be adopted by the British Parliament. At present, only one-third of the public debt was held on sole accounts, indicating, generally "speaking, absolute property; and the remaining two-thirds were held on joint accounts by persons not in iheiv own right. Professions paid one twentysecond part of the tax, and public feeling recommended a change of this part of the scheme ; but he warned the Committee of the more than Herculean task that must be undertaken if an attempt be made to reconstruct the tax because of so limited a case as this schedule. There had been a most earnest desire on the part of the Government to consuit the public feeling on the subject of this tax, but he referred, as an evidence of the difficulties in the way of breaking up the scheme, to the favourite example of terminable annuities. If they were dealt with, what must be done with life interests in leaseholds, jointures, and life annuities from lands ? When these distinctions came to be defined and dealt with, the difficulties were insuperable. These were the views of the Government regarding the Income tax, a gigantic engine, but the circumstances attending it rendered it impossible to maintain it as a portion of our permanent fiscal system. One thing he hoped the House would not do—namely, nibble at it, and try one experiment after another. Whatever was done with it>hould be be bold, intelligible, and decided ; paltering with it would jeopardise one of the most valuable of our fiscal resources. What the Government aimed at doing was to put an end to uncertainty as to this tax, and they thought they should take effectual means to mark it as a temporary tax, aiid to lay the ground for Parliament, if it thought fit, at a given period to part with it. They proposed to introduce certain mitigations; to extend the principle of compositions, and to act, in connexion with the general system of the taxation, upon the sentiment that "the tax bore too hard upon intelligence and skill, and not hard enough upon property. They proposed to renew the tax for two years from April, 1853, at the present rate of 7d. in the pound ; for two years more from April, 1855, at 6d.; and for three years more from April, 1857, at sd. ; so that the lax would expire on the sfch of April, 1860. While they proposed to renew the Income Tax, they intended to accompany this renewal with a relief from taxation. But with a surplus so small, larger means were required for an extensive and beneficial remission of taxation. If the Income tax was to be continued, should it bs extended ? The view of the Government was that the late Administration was right in ihinknig that, if the Income Tux was to be re-

tamed, the exemptions must be narrowly considered. The persons whose incomes were below £150 had been materially benefitted by the large remissions of taxation, and the Government proposed that incomes between .100/. and 150/. should pay s<l. in the pound for the whole time the tax continued. Another great question was the exemption of Ireland, which had derived benefit from the changes in our fiscal system, and the duties which had constituted the ground of her exemption had disappeared ; the Government, therefore, did not see why the Income Tax should not be levied in Ireland. Another object was to meet the public feeling, that the operation of the tax was severe upon intelligence and skill, in comparison with property ; and it was proposed to alter the legacy duty, and extend it to all successions, the exemption of real property no longer being suffered to exist. The first year's produce would be 500,000/., and he had no doubt that ultimately there would be a total addition to the permanent taxation from this source of 2,000,000/. a year. He then proposed to make an addition to the duty of spirits in Scotland, of Is. per gallon, and in Ireland of Bd., with an allowance for waste in bond ; the net gain would be 436,000£. A small duty in licenses (not spirit, wine or beer) would produce 113,000 Z. The whole amount of increased taxation of 1853-4 would be 1,344,000/. and with the surplus added the total would be 2,149,000/. He had proposed to charge Ireland with the Income tax, and the duty on spirits ; but the Government had come to the determination to relieve her from tlie Consolidated Annuities, amounting to 4,500,000/., which would cease from and after the 29th of September last, all arrears up to that date to be paid, and all sums received since to be returned.

He now proceeded to state the promised remissions of taxation. The firsts was the Excise duty on soap, which it was proposed to repeal; the net loss being 771,000/. The next item was the reduction of certain stamp duties—l, life assurances, from 2s. 6d. to 6d., causing an immediate loss of 29,000/.; 2, receipts, to Jd.,creating a loss of 155,000/.; 3, indentures of apprenticeship where no consideration was given, to 2s. 6d.; 4, attorneys' certificates, from 12?. and 8/. to 91. and 6/., and articles of apprenticeship, from 120/. to 80/. Loss of revenue, 48,000?. With respect to the advertisement duty, the Government thought it right to submit to the House the plan they had adopted at-the time of the debate on Thursday—namely, to reduce the duty to 6d., and to repeal the stamp duty of Id. and id. upon supplements to newspapers. The first loss on these duties would be 160,000/. It was also proposed to reduce the duty on hackney carriages one-third. It was then proposed to reform the assessed taxes, reducing that on servants, private carriages, horses, and dogs. The loss would be 290,000/. The system of posthorse duty it was intended to levy in the form of licenses, making a loss jof 54,000/. Another change was in the mode Jof redemption of the land-tax. In the Customs' duties they had it in their power to make considerable reforms, and afford much relief. With respect to the duly on tea, they acceded to the principle that it was most unwise to cut it down to Is. per lb. at once, and they proposed to reduce it from" 2s. 2Ud. to Is. 10j£d. till April, 1854 ; from thence to April, 1855, to Is. 6d.; from thence to April, 1856, to Is. 3d.; and from thenceforward to Is. The loss of revenue would be in the four years 1,934,000/. It was further intended to abolish all duties that were unproductive, and those levied on certain manufactured articles, making 10 per cent, the maximum rate of the duties retained on manufactured articles; to subslitute in all practicable cases rated for ad valorem duties ; to sink the differential duties between foreign and colonial articles, and to lower the duties on various articles of food. The effect of the various changes in the Customs' duties,, as applicable to the year 1853-54, would cause a gross relief of 1,338,000/. So that the state of the account for the year 1853-54 would stand thus— Surplus .£805,000 New taxes 1,344,000 2,149,000 Loss on remissions 1,656,000 Remaining surplus Mr. Gladstone then entered at considerable length into the prospects of succeeding years, holding out the expectation that in 1860 Parliament would be in a condition, if it thought lit, to dispense with the Income Tax.