TOPICS OF THE DAY.
LAND TAXATION IN THE BUDGET.
Tr HE Budget is either going to be profoundly modified 1 by the dropping of the new and unprecedented proposals for the taxation of laud and minerals, or else it and the Government will run the risk of tots, defeat. That seems to us a reasonable statement of the situation. If we are right, this result is due to a fact which will also ensure the defeat of the worst part of the proposals of the Tariff Reformers. That fact is the instinctive adherence of the people of this country to the principle of taxation for revenue only,—a principle of which " tariff for revenue only ". is a part. Tbe British public may not be very clear-headed on fiscal questions generally, but they have learned, and mean, we believe, to hold to, one or two simple principles of taxation. The first of these is that the object of a tax is neither to enrich nor to impoverish individuals, but to fill the Treasury, and that therefore taxes with social and political objects are to be avoided. Another principle is that it is people, not things, who pay taxes. A third, and perhaps the most important of all, is that people ought to make large contri- butions to the revenue because they are rich, and not because they happen to hold a particular kind of property. Though Mr. Asquith, Mr. Lloyd George, and their colleagues may ignore the fact that the ownership of " undeveloped " lan1 or the ownership of " ungotten " minerals is not necessarily a proof of wealth, and, again, that the rever- sion after a term of years of the possession of land does not necessarily make a man a wealthy man, the greater public fully understand that this is so, They know that, directly or indirectly, thousands, we might indeed say hundreds of thousands, of poor men are owners jointly or severally of the classes of property we have just named. All these principles of taxation are violated by the land and mineral proposals of Mr. Lloyd George's Budget, and therefore, in our opinion, they will ultimately have to be abandoned, or else, as we have said, the Budget, and the Government with it, will be in imminent peril of destruction.
A great deal of strong language has been used about the sixty or seventy Liberal Members who are combining to oppose the land proposals of the Government, but in our opinion, instead of being traitors to their party or to the cause of Free-trade, they are doing good service to both. Moreover, they can, we believe, carry out their views if they press them with sufficient persistence, and if they concentrate their attention upon the land proposals of the Budget. The increases in the Income-tax and in the Death-duties and the super-tax may be injudiciously applied, but at any rate they are merely extensions of recognised principles of taxation, and proceed upon the sound plan of making individuals pay more because they are rich, not because, whether rich or poor, they hold a particular form of property. Again, they are not levied upon what is "undeveloped" or " ungotten "—that is, property which does not exist, though it may be alleged by guessers or valuers that it is going to exist—but upon property which is actually in existence. If the pro- testing Liberal Members make it clear that they mean business, and that they are not going to collapse the moment the party managers crack the whip over them, they will gradually accrete to themselves support from many Liberals who at first had not the courage to come forward, though at heart they greatly dislike the land proposals of the Budget. When such timid people see that business is really meant, and that there is a real chance of getting the land proposals abandoned, they will think it worth while to come into the open. To bring such persons into line it is necessary, however, that those Liberals in the constituencies who agree with the priotesters should do their part. If Liberal opponents of the Land-taxes who vote in constituencies represented by wavering Liberal Members let those Members know that they do not intend at the next election to support any one who voted for the Land-taxes, a very great deal will have been done to make many a "balancing" Member, in the words of the hymn, "dare to be a Daniel," At present the chief difficulty in getting the Government to withdraw their land proposals is the Cabinet's fear of the out-and-out land-taxers,—the men who are represented by Mr. Wedgwood. These well-meaning but fanatical persons are, however, much more noisy than powerful, and if it were made clear to the Government that they had to choose between offending the land-taxers and the anti-land-taxers, they would find that the path of safety lay in abandoning the Land-tax proposals, at any rate for this year. No doubt there would be a, great deal of angry disappointment expressed by the " Henry Georgeite " group, but„ as has been shown in the case of the Welsh Members, if a Government once make up their minds to disappoint a section of their followers, it is wonderful how soon that disappointment is forgotten. The withdrawal of the land proposals would cause a good deal of bad language, and be a nine days' wonder, but it would be nothing more.
There are one or two other facts which, if looked at closely and carefully, will show that the abandonment of the Land-tax portion of the Budget is not so difficult as it might be supposed from a superficial view of the case. To begin with, the general financial projects of the Government would in no sense be wrecked by the abandonment of the Land-taxes, and of the huge legislative structure which must be created to bring them into exist- ence. The money required to carry on the work of government can perfectly well be obtained without these taxes. Therefore it is not open to Ministers to urge that their Budget must be accepted or rejected in its entirety, and that the withdrawal of a part will mean the ruin of the whole. Not only would the Budget stand perfectly well without the Land-taxes, but their omission would very greatly ease the Parliamentary situation. It would make it possible for the House to rise at a reasonable time, say at the end of August or the middle of September, and would also allow the Government to proceed with the two or three legislative measures that they are very anxious to pass this Session. If the Budget is persisted in without modification, those measures, whatever the Government may say or feel at the moment, are, in fact, doomed. Another influence which is likely to affect the Government is that of the Temperance Party. They are naturally strongly in favour of the new License-duties. They are beginning to feel, however, that they run a great risk of losing them if the Budget is weighted. down by the land proposals. Without those proposals the Budget will certainly go through. With them it is very doubtful ' whether the end may not be a General Election, at which the whole power of the brewing trade will be joined with the other forces opposed to the Budget to bring about the defeat of the present Government. The temperance people, in fact, have—and, we believe, realise that they have—very strong reasons for desiring that the Finance Bill should be relieved of the land clauses.
It has been assumed, though we think without sufficient consideration, that the House of Lords will not dare to throw out the Budget, or rather to throw out the Land-tax part of the proposals. In our opinion, this view is a mis- taken one, for we note a growing expression of opinion among moderate men of all kinds that it will be the duty of the Lords to reject those proposals if an attempt is made to force them through by the mere mechanical weight of the Government majority. Very likely if the Lords stood absolutely alone, and could iudulge in the luxury of thinking only of the risk to their coronets involved in taking action which might cause an appeal to the country, their natural timidity might prevail. There are signs, however, that the Lords are beginning to understand that it will not be safe for them to think merely of their personal and class interests. Moderate men who care a great deal for a second House which shall be able to do its work, but very little for the Peerage on the ornamental side, are urging that if the House of Lords is unable or unwilling to reject proposals so contrary to all sound principle as the land proposals—proposals, too, which have never been placed before the electors—they have no use for the Lords, and that the sooner they are got rid of and something more efficient put in their place the better for the country. The Lords are being reminded that, though it may be unpleasant to quarrel with the Government and be exposed to a Dis- solution at which the cry may be " Down with the House of Lords 1" there may well be greater risks involved in the forfeiting of the confidence of their natural supporters in the constituencies,—the moderate men who exist in both parties. The Lords are between two fires. That is how the situation is working out in practice.
The Cabinet will not., of course, openly acknowledge the truth of these considerations, but we are satisfied that some of the cooler-headed members of the Government are beginning to realise that the threat of "Your coronets are in danger!" may very well turn out to be quite ineffectual. Another consideration is worth noting. A great many of the shrewder party leaders, whatever they may say in public, are in private very doubtful whether, if they appealed to the country against the Lords because the Lords had rejected the land part of the Budget, and the Government had thereupon refused to go on with the rest of their taxation proposals, the Lords would be beaten. But if the Lords were not beaten upon such a cry as this, it is obvious that their power would be very greatly increased, and that the Liberal Party would never again be able to assume the attitude which they now assume towards the Peers. In fact, while there are no doubt certain risks for the Lords, there is also a very great deal of risk for the Liberal Party in a Dissolution involving the question of the right of the Peers to perform the functions of a second Chamber. These considerations will, we grant, not be much talked about in public, but nevertheless they may have very marked effect in making the Government ultimately determine to agree to the abandonment of the land clauses.
A word must be said as to the alleged Constitutional inability of the Peers to amend the Budget by dividing the Finance Bill into two parts, and passing one while rejecting the other. The alleged uncon- stitutionalism of such an act is, we believe, based upon a .mistake. The principle which governs the power of the Lords in the matter of finance is a very simple one. It is that the Peers have no right to impose any burden upon the taxpayers of this country. The taxpayers tax themselves through the representatives they have commissioned for that purpose. But the Lords are not commissioned by the taxpayers. Therefore they Cannot impose even a farthing's-worth of taxation upon the people. To extend this principle, however, so as to make it run that the Lords cannot relieve the taxpayers of this country of burdens proposed to be laid upon them by the Commons is utterly preposterous. The Lords have a clear right, and, what is more, in certain circumstances a clear duty, to reject burdens which the other House seeks to lay upon the taxpayer. No doubt the Lords have to consider the question of how the King's Government has 1,0 be carried on, and if they feel that the rejection of a money Bill will lead to a Dissolution at which a majority pledged to the proposed system of taxa- tion is likely to be returned, they will be foolish to reject the said proposals. If, on the other hand, they think that the decision of the country would be against the new taxes, they have every right to throw them out. The notion that a Budget or Finance Bill must be accepted as a whole or rejected as a whole is an extension of the custom of the Constitution which will not bear examina- tion. In all these matters the guiding principle is deter- mined by asking the plain question : "Does the action of the Peers impose a burden upon the taxpayers ? " If the answer is "Yes," then the Peers are in the wrong and are violating the Constitution. If the answer is " No," then the Peers are within their rights, and it is simply a question whether it would be wise or unwise, politic or impolitic, for them to take the action they propose.
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