TOPICS OF THE DAY.
THE BUDGET.
MR. GLADSTONE'S Budget is always a work of art, and not least so when he has a very sombre background. This year, however, he has no terrific chasm to paint like that with which he excited the wonder of his amazed hearers in 1860, no financial Chat Moss to fill up which looked as if it would easily swallow all the materials you could bring to the work; but, on the other band, a very considerable sum to dis- pose of in a way exceedingly grateful to the feelings of his hearers by remission of taxation. Still, though he had little but bright colours to deal with, he disposed them like a true artist, inventing first, at least the appearance of new burdens in order to heighten the effect when he proposed his remissions of duty, passing his own infant chil- dren—the " petty duties " — through the fire to the genius of commerce (Mammon instead of Moloch), with a playfulness that almost rose into humour in its contrast with the grim superstition to which he referred ; and con- cluding with an almost incredible piece of novel and congra- tulatory statistics (which, if incorrect, is at least a pleasing fancy), showing the rapid increase in the income of the coun- try within the last ten years. Whereas, in ten years, said Mr. Gladstone, from 1843 to 1852, it had increased only six per cent.; in eight years, from 1853 to 1861, it had increased no less than 20 per cent.—a statement which can scarcely, we think, be explained by Sir Stafford Northcote's suggestion that it is due to the gold discoveries and the nominal rise in incomes to meet the rising prices. The Budget itself is one of Mr. Gladstone's best, and quite his least crotchetty one. Supposing the taxation had remained unchanged, he had the following debit and credit account for the coming financial year ;-- Customs Excise...
Stamps Taxes ... Income-tax ... Post Office ... -Crown Lands... Miscellaneous... China Indemnity
•••
£24,180,000 17,600,000 9,000,000 3,160,000 10,500,000 3,800,000 300,000 2,500,000 450,000 71,490,000 67,749,000 Surplus ••• ••• ... ... £3,741,000
ESTIMATED EXPENDITURE.
Funded and Unfunded Debt £26,330,000 Consolidated Fund ... ... 1,940,000 Army Estimates ... 15,060,000 Navy Estimates ... 10,736,000 Collection of Revenue 4,721,000 Miscellaneous Estimates 8,962,000 £67,749,000 Of this surplus, Mr. Gladstone proposes to keep 531,0001., -which, as his estimates of revenue seem made on a very moderate scale, will probably be quite enough,—and to give the public the full benefit of the balance,—indeed, as he is going to add a few small taxes, and as those which he remits will take a burden off trade that must stimulate consumption, the net amount of remitted taxation for the next and the following year (part of the remission not falling, of course, in the present financial year) will be above four millions and a half. The difference, however, between the taxes he proposes to remit and the new ones he imposes in the present financial year will be 3,210,0001. The mode in which Mr. Gladstone is going to employ these resources seems to us singularly wise. In the first place, he increases them slightly by trifling changes, to which there is no objection to be alleged. We are to have the duty on chicory raised as high as the duty on coffee with which it is Mixed, and a corresponding Excise duty put on the chicory raised in this country. Next, we are to have the Wine Licence system extended to the clubs, which are to all intents and purposes high-class eating-houses. There is a technical objection raised to this important step, that the members of a club are, in fact, joint proprietors of the building and funds, and that, therefore, Mr. Gladstone might as well tax the consumption of wine and beer in private houses. This is, however, a purely formal objection, since, in fact, what is eaten and drunk is paid for on the spot,
ESTIMATED YIELD OF TAXES
and the yearly subscription is merely a mode of giving the members certain social powers of selecting their own company and providing their own amusements, which they would not otherwise have. It is, of course, wholly trivial; but there is always an advantage in avoiding even the appearance of ex- cepting the higher classes from taxes to which the lower are liable. If the new working men's clubs provide ale, they will, of course, be in like manner obliged to obtain a beer licence. Mr. Gladstone also proposes to commute the five per cent. paid by railway companies on all their trains, except those called parliamentary and excursion, for three and a half per cent., without any exceptions, which removes the privilege which excursiontraffic (often ill-managed and dangerous) has seemed to enjoy. He also taxes carriers' carts. Again, he removes the exemption enjoyed by charit- able legacies in Ireland, which is a step of sound discretion ; and he subjects English charities to the income-tax, which they have not hitherto paid. This, not only because it will be a great saving to the expense of collection, is an exceedingly wise measure. Posthumous charity is certainly a fairer subject for taxation than the charity which involves a living man's sacrifice, and as all the funds for the latter are neces- sarily mulcted in the income-tax, there is every reason why the former should be also. Indeed, posthumous charity is to the donor a mere luxury ; and even with regard to the recipient—as every exemption of charitable funds which are destined to be consumed without paying any equivalent in labour is, in fact, a new tax on labourers—it is exceedingly objectionable in principle. Assuming a poor-rate paid by all, there can be no excuse for any exemption of charitable funds from the ordinary taxation of the nation. So much for the extra burdens, which slightly increase the sum at Mr. Gladstone's disposal. His first remission is the petty tax on imports and on bills of lading outwards, — which are a great annoyance and little advantage to the revenue, yielding only 191,000/. a year. The next and most important change of principle is in the levying of the income- tax. Mr. Gladstone allows all who have a total income under 2001. a year to deduct 601. a year,—the estimated cost of supporting a family on mere necessaries,—from his taxable income. Thus the man with 1001. a year will pay on 401.,— the man with 2001. on 1401. The principle is admirable, but needs extension. If unproductive consumption be the true subject of taxation, and if all consumption be considered as unproductive which does more than keep the body in health and vigour,-601. a year ought to be deducted from all rateable incomes up to the highest limit. This would be a very real. boon to clerks with salaries but slightly above 2001., or even 3001., and we cannot conceive why they should pay on all their consumption, if their poorer comrade is to pay only on the unproductive. Besides this, Mr. Gladstone takes 2d. from the general rate of the income-tax, reducing it to 7d., below which it ought never, probably, to sink, if the taxation of the labouring and wealthier classes is to be equal. Having got rid of 1,900,0001. in these changes in the in- come-tax, and 143,0001. in the petty duties, Mr. Gladstone proposes to remit the rest by taking 5d. a pound off the tea duties, which will sacrifice another 1,300,0001., giving the total sacrifice of the year as 3,343,0001. The alternative was only between tea and sugar,—for it was clearly due to the work- ing class to give them a fair share of the remission of taxa- tion—and sugar is already taxed not 60 per cent. on its value, while tea, taxed at Is. 5d. a pound, is taxed, perhaps, 100 per cent. It is clear, therefore, that the remission of the tea duty will be a greater boon, and also tend to a much more rapid recoymy of the revenue, than a remission (equal in amount) on the sugar duty. Besides, Mr. Gladstone evidently hopes that to make tea cheaper will be an inducement to use also more sugar, while making sugar cheaper would scarcely be an inducement to take more tea. The old women who find they can afford another cup of tea will scarcely deny themselves the extra lump of sugar ; while the extra lump of sugar would scarcely tempt theni into a fresh brew of tea. And by this tendency of human nature Mr. Glad- stone will, no doubt, profit. Such is Mr. Gladstone's Budget, the most sober and pro- bably popular he has during this tenure of office devised, and one which, to a certain extent, drives further the im- portant principle for which we have always fought,—already partly admitted by the exemption of premiums on life in- surances—that the amount of a man's unproductive con- sumption, so fur as it can be ascertained, is the true measure of his tax-paying income ; a principle which may one day carry Mr. Gladstone further tha a he is as yet willing to go.
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