THE "TAXES."

THESE are divided into the Land and the Assessed Taxes. The total amount they yield to the revenue is in round numbers, five millions

and a quarter. Of this sum, nearly three millions and three quarters are derived from the duties on laud and houses,—a species of impost amongst the oldest of English taxes, in its nature, though differing a good deal in the mode of imposition. A tax on land was collected by the Norman princes (and its origin was as early as 991), under the name of Danegelt ; another, called Moneyage, was levied by the same race of sovereigns upon every hearth; and, considering the general po- verty of the people, the value of silver, and the quantity of metal which was then contained in a pound, it must have been a heavy and oppressive tax if the rate of one shilling a year was actually levied upon every hearth. Various feudal exactions fell altogether upon this kind of property ; and the Supply, though intended to be a tax both upon property and capital, must in these early periods have principally fallen upon land and houses, when scarcely any other kind of property existed. To trace the various mutations of this class of taxes, is not within the scope of the present inquiry. The Hearth-tax, we believe was the last survivor ; but being exceedingly unpopular on account of its inquisitorial nature, " as, in order to ascertain how many hearths were in the house, it was necessary that the tax-gatherer should enter every room,"* it was abolished soon after the Revolution, as a badge of slavery. In its stead was imposed a species of House-tax, whose amount was regulated in a great degree by the number of windows. This tax sub- sequently became a Window-tax, which, after various alterations and augmentations, is still in existence. A Land-tax was levied by the Long Parliament, but the present impost owes its origin to the Revo- lution. It was originally intended as a tax both upon the rent of land and houses and upon the profit of stock engaged in trade ; and it was fixed at four shillings in the pound, or one fifth part of the supposed income on which it was levied. This, however, was never rigidly ex- acted, even on its original imposition. The country was divided into districts, and each division assessed for a certain amount, according to the supposed value of its income. As this amount was fixed, the real burden of the tax has been continually decreasing ; though its pressure has of course become unequal, being heavier in some districts than in others. The taxes on servants, carriages, hair-powder, &c. are the re- sults of the war against Revolutionary France. The illustrious author of the Wealth of NatiOns may be considered as the originator of the House-tax. In treating of taxes on rent, he was lead to recommend a tax which should chiefly fall upon the income of the landlord, or upon an article of luxury and ostentation so far as it affected the tenant. It is upwards of fifty years since the appearance of his immortal work, and its leading principles can scarcely be said to be generally admitted, much less acted upon, in the Cabinet and the Senate. When the object was to extract money from the People, the progress of our rulers was not so slow. A similar tax to that which he bad

• Wealth of Nations, Book V. Chapter 11, p. 403, vol. III. Mr. M'Culloch's edition.

recommended was imposed in the interval between the editions of his Work.

THE LAND-TAX,

Previous to the time of PITT—though mortgaged to the public creditor- -was voted annually. " The great man," now no more, made some modifications, and rendered it perpetual, but granted the owner of a property the power of re- demption; hoping (it was surmised) that the whole would be shortly redeemed, and that he should then be able to impose a new one. In this, however, he was mistaken ; not quite one half, or rather less than one million, has been redeemed.

The impropriety of binding posterity by pledging a particular tax, or render- ing it perpetual, is obvious. The power of redemption seems, at first, fairer, but is really more mischievous ; for it renders that morally which the other mode makes legally perpetual, and prevents the power of repeal, unless by a breach of faith or a repayment of the money paid for the redemption. This tax falls upon rent ; and the landlord being bound to pay it unless a spe- cific agreement is made by the tenant to discharge it, the incidence is never dis- puted. It is levied upon empty houses, and arrears left unpaid by the tenant are charged upon the landlord. This is another element of inequality.

THE ASSESSED TAXES.

The unpopularity of these taxes, at least of the House and Window Taxes, in the Metropolitan Districts—the former pledges or the expressed opinions of several Ministers on the subject of their repeal—the disposition of our Govern- ment and our Legislators to yield iu economical matters to popular clamour for present popularity, though at the expense of the best interests of the State—and the possible mischiefs in a financial point of view that may follow the uncon- ditional remission of these Taxes, render a clear understanding of their nature a matter of Very considerable importance. No apology is, perhaps, needed for the space which may be devoted to the discussion of the subject ; but we must be- speak the patience and attention of the reader whilst we endeavour-1. To I his- cover upon whom the payment of the House and Window-duties finally falls; 2. To consider the points of practice which are connected with them' 3. To in- quire into the abuses wItich exist, (Jr which ale alleged to exist, in the manner of levying them ; 4. To touch mien the propriety Of their commutation; and 5. Upon the effects of their unconditional repeal. And first,

WHO REALLY PAYS THE HOUSE AND WINDOW- TAXES ?

We incline to the opinion that they fall princire"y, perhaps wholly, upon the landlord. The tenant invariably pays what the house is worth, or at least what he supposes it to be worth. lie estimates the total outgoings, and if they exceed what lie thinks lie can afford to pay, he either beats down the rent or de- clines the property, The nairhet value of the house the landlord will obtain from the competition of tenants. More than that—let its original cost be what it may—he will never get, but must take whatever the public may think it worth, or allow his property to remain unproductive. When the house is once erected, the landlord is quiescent. Citteris paribus, if the situation improves or the outgoings fall, his rent rises : if the neighbourhood declines, or the parish rates increase, or fresh taxes are imposed (if you please, upon the tenant), his rent falls.

This view of the case has been frequently denied, and sometimes not without acuteness. Houses, it has been said, are articles of manufacture; the builder must have his fair remuneration upon his outlay, whether houses be taxed or not ; competition amongst builders will prevent him from getting more, self- interest and the law of profits from taking less ; taxes upon _houses, therefore, fall wholly upon the tenant. In this statement there are two fallacies. One of them consists in supposing that houses are a rapidly consumable and h•runspout- able commodity. if the markets are glutted with cotton or cloth, the article can be carried to other places. If the glut still continues, and prices fall below the cost of production, people get tired of working for nothing, or at a loss ; many withdraw from the trade, and, after sane derangement and distress, the supply of the commodity adjusts itself to the demand. But houses cannot be carried to a better situation, our can they be withdrawn, at least under several ages ; and the unfortunate speculator, who indulged himself in dreams of enor- mous rentals, is at last compelled to take just xvliatever the parties who are to dwell in them feel them to be worth, minus the outgoings. Neither are houses, like other manufircturcs, capable of unlimited production ; for no man builds upon a moor or a mountain-top. It is necessary to their eree- tion—at least to their letting—that roads should be made, communications opened, and a vicinity formed. And this leads us to the second fallacy of the argument, which consists in assuming that the cost of building a house is the only element in house-rent, to the total omission of the ground-rent. This last is often a third, sometimes a half, and occasionally equal to the whole building- rent, even after all the various outgoings are deducted from it. This rent is al- ways a monopoly ; and out of this rent, which is created without either care or cost or exertion on the part of the landlord, are all taxes upon houses (as we conceive) finally paid, unless, where the speculation fails altogether, they fall without redemption upon the building-rent. The circumstance of the mono- poly has been often denied in effect, if not in terms ; but how si ands time flirt? An old house in the Strand, or in Fleet Street, will let froni 130/. to 2001. a year. A newer and a better house may be had in the ontshil ts for 601. or 701. ; not because houses can be built cheaper at Walivorth than in Loudon, nor be- cause people are interdicted from building houses, if they please, upon the iden- tical models of those alluded to, but because the great thoroughfares and densely- peopled " backs " of a populous city are found to be better adapted to business than the quiet streets of a suburban neighbourhood ; and the tradesman, calcu- lating his total outgoings and incomings, finds it more profitable to pay 300/. iu one place than 901. in theother. Houses, again, in the leading streets near Gros- venor Square, let at 2001. a year and upwards. In the neighbourhood of Rus- sell Square, 1001. can scarcely be got fur the same description of residence; in vicinities of a still less tonish character, 601., 701., or 801. arc rentals to be taken, not because the first-mentioned houses are better than the rest, or cost more in erecting—for the cheaper are, in many cases, the more convenient—but because Fashion, to the great gain of the Marquis of W'F.sTJIsNSTEo, has set her seal upon his property. If the fact of monopoly be yet doubted, travel—not into the country—but out of town. Why does land, fronting the high-road, fetch a much larger sum per foot than plots with a far greater depth which run from it ? When the buildings are erected, why does a house, bepowdered by the dust of a turnpike-road, let at a much higher rent than a similar residence in a "cross" street ? And why, as the dust increases, does the rent rise? Not be- cause the cost of producing the house is greater in one place than in the other, but because the bustle and life of a leading thoroughfare are amusing, the readi- ness of conveyances to and from your own door is convenient, and finally be- cause the omnipotent decision of the vox populi has pronounced the resident in a high-road to be a more respectable character than the man who lives in a cross street. Again, in what circumstance does the House-tax differ from the Land- tax, except that the Act of Parliament declares the latter shall be paid by the landlord, unless the tenant undertakes to defray it by a specific agreement. Yet with this verbal discrepancy, the most sagacious people in the world are satisfied, and are tricked into acquiescence with this distinction without a difference. Poor-rates again are admitted to fall upon the landlord ; rentals, other things being equal, differing with the difference in the rates. Can Lord ALTHORP, or the deputations who weekly tease and perplex him, unfold the respective ele- ments of difference between the House-tax, the Land-tax, and the Poor-rates? The impoliey of the Window-tax cannot, indeed, be defended. It depsfvestas of light ; it restricts our internal comforts ; it interferes- with our architesturar arrangements ; and it is an unfair tax,—not because it presses unduly upon she tenant, who always counts the windows and makes their number a plea for riv- ducing the rent, but because it falls unequally upon landlords. An old house, in an exploded neighbourhood, is subjected to a much heavier duty than a new one in a modish situation, built purposely to evade the tax : yet while the pres- sure is much greater upon the old house, its rental is not half, perhaps not a third, that of the new. This inequality should long since have been got rid of, by abolishing the Window-duty and increasing the House-tax. We have observed that the pressure of these taxes settles upon the landlord; such, however, is the mischief of heavy taxation, that its effects reach beyond the class of persons on which it may be traced finally to fall A duty on commo- dities ispaid by the consumer, who pays, moreover, the producer's profit upon the tax. 'Vet duties upon consumption react snore or less remotely upon traders, by their tendency to lower profits generally, by the check which they give to consumption, by the general derangement which industry suffers from their operation, and by the smugglers they call into being. It is therefore probable that these taxes, as well as all other charges upon rent, by preventing the erec- tion of houses until the ground-rent rises high enough to pay the outgoings, both Parliamentary and parochial, may—like tithes with regard to produce—have a tendency to keep up the value of all houses. If houses, like corn or vegetables, could be raised in any situation, this pressure would be considerable. But as they require a road to be made, communications to be opened up, a neighbour• hood to be formed, and even then can only be erected on a frontage (for it is useless building in a field), its operation seems to be very slight. In practice at the present time it is just nothing. The high profits autl great value of money during the war kept up house-rent. It rose disproportionately high with the return of so many persons to England after the peace, and the ensuing increase of population. This circumstance, in a short period, induced capital to flow into building speculations; and the natural tendency was artificially increased by the prosperity times of 1824-5. The result is seen in all the environs of Lon- don, where streets are frequently half-untenauted, where the ground-rents are sometimes not very flit short of the whole demanded rental, and where one third or one half of the origival cost for building is the purchase-money for houses subjected to a heavy rent charge to the freeholder.

If this long disquisition on a popular fallacy lets been tedious, the importance of the subject must plead our excuse. Taking leave of what may be termed the theory, let us consider the PRACTICAL OPERATION OF THE HOUSE AND WINDOW TAXES. And first of Leases.

Of course, if every farthing of these taxes fell upon the landlord, the tenant during the currency of the lease would reap the benefit of their unqualified re-

peal ; and so far householders with leases would be greatly benefited. But it is a benefit they never calculated upon when making their bargain with the land- lord ; it would be a temporary benefit ; and it would be a benefit to them in their

character of capitalists, or rather, to use Mr. HET II ERINGTou's phrase, of "pro-

perty men." It would make them, in fact, a sort of quasi landlords, by giving them pro tanto a beneficial interest in the lease. It is however alleged, that

property has depreciated. Very true ; but it has depreciated more in the private streets and the outskirts than in the leading thoroughfares of London. In some places, too, it has risen in value, not from the doings of the tenants, but of the public. The one iustance is a case for diminution in the assessment ; the other fur all increase. But the fall in the value of a house can be no reason per se for the abolition of a tax, though it is a very valid reason why the assessment should be lowered ad valorem. A tenant takes a lease, not to please the landlord or the public, but to benefit himself. He dislikes moving, he intends expending money on the premises, or he hopes to establish a property in the house by forming a connexion of business ; perhaps he has an eye to an improving neighbourhood. If he succeeds, neither the landlord nor the public are called upon to participate in his success; if he fails, the public, at all events, are not to be called upon un- fairly to bear his losses. A leaseholder is in some sense a speculator, and may be likened to a merchant buying tip a commodity, who enters into the transaction solely with a view to his ow•u profit, thinking nothing of producer or consumer : if markets rise, well; if they fall, he Must bear his loss without asking the State, for this reason only, to abolish the custom-duty in order to stimulate con- sumption. It may lie said, that the house-rent would not rise if these taxes were repealed. It might probably fall. We have already alluded to one cause of depreciation,— a state of rents artificially high, and then brought down by the consequent reac- tion aggravated by the blessings of a "full currency." The alterations com- menced or contemplated in the centre of London will act iu the same way, though not perhaps to the same extent, as the "glut" in the outskirts. The improvements in the neighbourhood of Charing Cross will reduce the value of houses iu the Strand, &c. The contemplated line of street from Waterloo Bridge to the Loudon University, will be kit in the rents of Holborn, Oxford Street, &c. If Farringdon Street be continued to Holloway, all high-rented property in its vicinity will decline in value, w:lilst that which is now nearly worthless may rise. And the result will be, that ground-rents throughout the centre of London will be more nearly equalized. These circumstances are valid reasons for a tenant refusing to take a lease upon the old scale of value, when there were but two leading thoroughfares in the metropolis. They are no grounds what- ever for stopping the improvements, or for repealing these taxes (unless it be shown that they- are time most proper to be repealed) to remedy a temporary pres- sure upon an unfortunate or improvident tenant. An outcry has been raised against the amount which is levied on London. The true question is not the amount which London pays, but whether the pro- perty of London is charged with more than its fair proportion. The Bills of .Mortality reach over an area of ground less than many tracts of moorland in Scotland. The rental of the former is about five millions ; of the latter, not five thousand, perhaps not five hundred pounds. Is this difference a cogent reason why the landlords of the Highlands should call for an equalization of rents? In London there are many men of large capitals, and the aggregate of profits is very considerable. What would be thought if the provincial towns, in a small way of trade, proposed an equal distribution of capital and profits ? In the metropolis a letter can be sent six miles for twopence six times a day ; a man may ride three miles through the leading streets for sixpence. He is in the centre of arts, science, and civilization; every comfort, every luxury, every amusement, can be commanded immediately, and at the cheapest rate. Are these circumstances a ground for establishing, at the public expense, a penny post-office in every vil- lage, and plying an omnibus in every lane for the accommodation of rustics? The average amount of taxation, per head, in England, is three pounds. In Ireland it is about ten shillings. Would it smack of the sciolist or the statesman. to propose an equalization by a poll-tax throughout the United Kingdoms ? The attention which this very silly fallacy has received is astonishing.

The course of our examination has brought us to THE ABUSES CONNECTED WITH THE HOUSE AND WINDOW TAXES ; Which seem finally to resolve themselves into an inequality in the assessment. The very rich are frequently charged much less, the middling classes snuck more, than they ought to be. This inequality is partly attributable to the law, partly to the Surveyors of Taxes,—a set of otficials the most incompetent, un- civil, and rigid, in the employ of Government. Their appointment is generally a job ; they have rarely been trained to their business, and are frequently alto- gether unacquainted with it ; their remuneration greatly depends upon the in- creases they make in the present rate of assessments; and they occupy that equivocal position in society which disposes them to be insolent or servile as the case may be. From the decision of such a class of functionaries there is virtually

no appeal. If the tenant feels himself aggrieved by .their valuation, he must apply in person to the Commissioners; who can enter into no inquiry, who can hear no evidence touching the value of the property,—whether that evidence would be an opinion from competent persons as to the worth of the premises, or a question of fact as to the rate at which the houses in the immediate vicinity are actually let,—but the judges are obliged by law to confine themselves to the simple inquiry of what rent is actually paid, at which unionist they are com- pelled to fix the assessment. By this means, a man who has from any circum- stances an advantageous lease, pays less than in strictness he ought, whilst the tenant whose house has depreciated in value, is compelled to pay inure. Various plans have been proposed to remedy this evil ; the most specious of which is, to charge houses above a certain rent at a fixed sum for every foot of frontage, or, multiplying the front by the depth, for every square foot of ground .which the house covered. If the actual cost of building were at all times the only element in rent, this would scarcely he a fair criterion, as a rambling, ill- constructed country house of one or two stories, would pay a great deal more than a valuable town mansion with four or five floors. But since a variety of circumstances sometimes raise the value of rent much above, and sometimes sink it below the mere cost of the house, its result would he either to fall most oppressively upon houses of low value, or scarcely to affect the rent of the higher class of houses at all. It would also have a tendency, we think, to fall more upon the tenant than the present duties; and it would certainly be as in- quisitorial as the Window-tax, and interfere as much with our architectural arrangements. Houses would in future shoot upwards like maypoles. The fairest criterion is the actual value. This could at all times fairly and satisfactorily be obtained if the existing law and practice were altered. The Finance Accounts do not enable us to perceive the sum paid to the present Sur- veyors ; but it is probable that if the districts were extended, the same amount would provide competent and independent men who would devote themselves properly tmthe business. A power should also be given to the Commissioners of hearing evidence touching rolue, and deciding upon it without any reference to the contract between landlord and tenant. If the King's Surveyor should be dissatisfied with the decision (an improbable circumstance, after the facts had been thoroughly sifted in his presence), he might carry the case before a Ma- gistrate, or even before the Commissioners of a neighbouring district, whose Ward Should be final.

We have mentioned the inequality in the assessment of the House-duty. This chiefly takes place in the country; and though unjust, and in many instances grossly unequal, is not perhapsso great as it sometimes appears. To fix the value of an isolated country mansion, is not always an easy matter,. especially a value which shall appear proper to those who are assessed upon a London rack-rent. The house is generally inhabited by its owner ; there is, therefore, no rental to afford a real or an approximate idea of its value. If this lie fixed either at time actual cost of the mansion, or at what it would cost to build it at present, the assess- ment would be frequently most oppressive to decayed or embarrassed families. It would always be unjust; for an injudicious expenditure or an outlay adapted to the habits of olden times, so far from adding value toa house, is often a cause of depreciation. If the rent it might fetch in the market were taken as a cri- terion, it would—from the situation of the property, the limited extent of the market, and other peculiar circumstances—be sometimes as low as it is at pre- sent, and always much under what the inhabitant of such a mansion ought to pay. If we attempt to get at what should be the true criterion—the real ability of the occupant to contribute to taxation—the number of servants, carriages, &c. is but a clumsy test, and not always a true one. We mention this, not to pal- liate the too often shameless partiality of the Surveyors; not to justify a low rate of assessment on our aristocratical palaces ; but to suggest, that the diffi- culties in the way of compelling the property of the rich to contribute indi- rectly, are strong arguments in favour of a direct Properttstax.

PROPRIETY OF COMMUTING TIIE HOUSE AND WINDOW TAXES.

The arguments we have brought forward apply to the unconditional re- peal; the commutation of these and some other taxes for a Property-tax would be a most judicious measure. Though ground-rent is one of the properest funds to he subjected to taxation, it seems unjust to select ground-rents as the only kind of property on which an inmost shall be imposed ; not to mention that in an unsuccessful speculaticn it falls upon the building-rent, which is in fairness no more obnoxious to taxation than the Funds, Dock. shares, &c. To the substitution of a Property-tax any practical objections as to the difficulties of col- lection do not apply, for the collectors of the existing " Taxes " would collect the new. It may indeed be alleged, that the House and Window-duties have already fallen upon the landlord, and that by subjecting him to a property.-tax he is saddled with a double burden, to relieve the tenant, who calculated their operation when be made his bargain. To this it may be answered, that engagements for yearly periods will quickly adjust themselves to the change ; and that the depreciation of property has in many eases reduced the value of the house, so that if the term were at an end, the rent might be diminished to nearly its present amount, even though the House and Window-taxes were repealed. If, therefore, the commutation is ever to take place, the present is perhaps the most favourable period. And, as a whole, the measure, so far from being injurious, would be highly beneficial to the landlords of houses. The amount of the present House- duty varies from 7i to 14 per cent. ; the Window-tax may be on the average some- thing lower ; but the two together cannot be taken at less than from 15 to 20 per cent. ; and the graduated Property-tax would not average, perhaps, more than a third, and not reach, iu the highest classes, to more than 10 or 12 per cent. This circumstance, indeed, seems to afford the grounds of a specious objection— that the measure would be a breach of faith with Fundholder. To a general Property-tax, the Fundholders do not, we believe, object; but it might be said, that as far as house property was concerned, this would be a mere substitute of one tax for another of the same nature, though of a different name, in order to reach the Funds by the transformation. The objection, however, would scarcely be solid. The new impost would extend to Church incomes, to rent derived from land, and to the interest of money in permanent investments.

PROBABLE EFFECTS or THE UNCONDITIONAL REPEAL OF THE ASSESSED TAXES.

Unless some commutation of the kind suggested takes place, it seems that the repeal of these taxes is scarcely desirable ; though the consolidation of the House and Window-duties, an alteration in the present inequality of the assess- ment, and a better graduation in the scale of duty, together with their extension to Ireland, would be very much so. We have seen that it is clear, at least that it is highly probable, that the bulk of these taxes fall upon property, i. e. upon the rent of the landlord—that their remission would only benefit the leaseholder (in his character, too, of capitalist), and that only fora short period; whenever the lease expired, the landlord would, ceeteris paribus, raise his rent by the amount of the tax, and from rent there is seldom any relief, till the end of the term ; whereas, under a proper mode of assessment, the tenant might, as far as the tax was in question, be relieved in _proportion to the amount of the deprecia- tion. Lastly, if their naked remission takes place, no other relief can be granted to the people. The surplus revenue and the reductions Ministers intend spontaneously to make its the Expenditure do not together amount to a million and a half. The ether sources of revenue we have pointed out, though certain in the long run, are not—except the Legacy and Probate duty on real property—immedi ately certain ; and, like the Supplies and some of the savings, they cannot be raised but by the repeal and modification of other taxes, which, iu turn, cannot be accom- plished without a fund in band. If, therefore, the unconditional repeal be carried, the general improvement of our fiscal system must be postponed to an indefinite period. The merchant must give up all present hope of a simplification of the Customs, and a rentissiou or reduction of the duties in many articles of foreign commerce—the manufacturer must still submit to taxes on his raw materials and on his manufacture itself, and compete with foreigners as best he may—the " unwashed artificer" must go without his soap—the labourer be taxed one thousand per cent. on his tobacco—the middle classes four hundred per cent. on their brandy— above half a million must still be expended on the Preventive Ser- vice., and the mischiefs and miseries resulting from the contraband trade must still he endured—the agriculturists must expect no modification of the Malt-tax.

unable to effect any change in the duties on Brandy and Tobacco, the nation must sacrifice its well-grounded prospects of opening up an unrestricted trade with France and America.

The following exhibits a

CLASSIFIED ‘YEW OF TIIE LAND AND ASSESSED TAXES.

TAXES ON RENT.

Land-tax

1,161,312 House-tax X1,357,041

Window-tax 1,175,343

2,535,334 £

3,696,696.

TAXES ON EXPENSE OR LITX7;RY.

Servants

295.111 Carriages

392.946 Horses fur Riding

356,355 Dogs

181,002 Game Duties

125.431 Armorial Bearings

54,58:) Hair l'owder

14,3;7

1,420,111 TAXIS ox TRADE.

Other Horses and Mules

41:21

Dorse-dealers

13,542 75,025

05,909

Composition-duty

£5,217,741