MR. GOSCHEN AND THE TAXES.

IT is not so easy for an able man to talk for an hour on a subject of which his mind is full, and yet say nothing about it. People declare that Mr. Goschen, in his speech of Wednesday to his constituents, performed that feat to perfection ; but we are not quite so confident. He -certainly talked much of his forthcoming Budget—which, recollect, has not yet been before the Cabinet—and he cer- tainly did not tell us what it was to be like ; but still, there was a drift of thought in this part of his speech. Mr. Goschen was evidently annoyed with the charge that he always took taxes off property, and asked his audience to remember that he had taken 4d. a pound off tobacco— essentially the poor man's luxury, though the rich also smoke—and that he had imposed a tax on the real pro- perty of deceased persons, already yielding nearly a million a year, a tax on the transfer of foreign securities, and had proposed a tax on pleasure-horses, both of the latter being luxuries of the rich. One suspects his annoyance at this charge may have been deepened by a reflection that he would be exposed to it again this year, as he did not intend to halve the tax on tea, almost the only tax now paid by the poor who do not drink, but had in his mind a more original destination for the surplus, which again, he carefully assured his audience, had been " bulled" —that is, hoisted above its proper level—by an over- sanguine public. We may, of course, be utterly mistaken ; but that would be our impression of the way in which the Chancellor of the Exchequer's mind was running, and the impression is strengthened by his remarks upon the Income-tax. He had clearly considered the reduction of the Income-tax, for he was full of the weight of its incidence upon the poorer sections of the middle class, the educated or half-educated men with from ,2300 to £500 a year, who can just get along, and who pay the tax out of the minute surplus they have to spend on the amenities of life. The 2d. in the Income-tax which Mr. Goschen managed to take off in 1886 and 1887, as a, surcharge imposed for a special purpose, represents to a chief clerk on £500 a year, a subscription to Mudie's, a daily newspaper, and a nightly pipe,—in other words, the easements of life which are not necessaries, but help to turn a " grind " into a comfortable existence. Mr. Goschen grew eloquent over their fate—uselessly eloquent, for democracy will pile its heaviest burdens upon the middle class, under the idea that it is only mulcting the rich—but still, he was inclined to leave the Income-tax at 6d. He remembered vividly how the Daily News had admitted that 6d. might be borne in time of peace, even quoting the exact words, and thinking, we fancy, that they were comforting words for Chancellors of the Exchequer. Sixpence, if one can only have it regarded as a proper figure, yields such a quantity of cash, being just the heaviest amount which the average taxpayer, who is immensely influenced, and even in a way conciliated, by a demand for "even money," will pay without trying to whittle down his returns unfairly. We should say, if we were inclined to draw deductions from such inadequate premisses, that Mr. Goschen, if, indeed, he must give half his surplus to the poor in the shape of Free Education, intends to leave both the Tea-duty and the Income-tax alone, and to devote the remainder of his spending-money to something much more original.

We heartily hope it may be so, and desire to say a few plain words upon the subject. Chancellors of the Exchequer are going far too much into slavery both to the " classes " and the "masses," or rather, to traditional ideas as to what the classes and the masses desire. We are just at the beginning, as Mr. Goschen fully acknowledged, of what is probably a cycle of prosperity, with business brisk, profits "fair," and wages of all kinds very high. We do not believe that at such a time the immense majority of Income-tax-payers resent a rate of 6d. in the pound. They feel it, no doubt, often acutely ; but they ex- pect it, and know they will not get rid of it except for a very limited period. They have adjusted their expendi- ture to meet it, they have reckoned it in calculating their incomes, they have even allowed for it in selecting among the investments offered for their savings. As far as they are concerned, the tax can be left safely at that figure, and had much better be left, as securing a kind of apparent justice among taxpayers according to English ideas of taxation, which are not based upon scientific propositions at all, but upon a rough notion of what each class ought to contribute to the support of the State. What the Income-tax-payers ask, and would have if only they could organise themselves, is not reduction below 6d., but a little fairer treatment at the hands of collectors, and an easier method of being heard in remonstrance. They cannot waste the time and temper necessary to fight a surcharge unless it is very serious ; and the collectors know that, and raise their demands in a manner which, though seldom ruinous, is con- stantly most provoking. It is of the essence of good taxation that it should include no aggravating circum- stance, and to be surcharged for no reason, and practically with no redress, is an aggravation. Mr. Goschen would be much more thanked if he could abolish this nuisance by devising some form of appeal in writing, than for a reduction of Id., and he will not be able to give away more than that. On the other hand, it is time to consider, as regards working men's taxes, how far we are to go. Are work- men really to be as untaxed as nomads 9—in other words, are they who, as the majority of voters, impose all taxes, to pay themselves none but voluntary imposts, paid also by the rich in much higher proportions We do not believe the public as yet comprehends in the very least how this matter now stands, and it will not till the subject has been matter for full Parliamentary discussion. In two articles on November 16th and 30th, 1889, the _Economist stated facts which, we confess, struck us with amazement. The entire involuntary taxation of an average workman's family is now under 44d. a week. Here are the figures as given by a skilled economist :— " Returns of working-class expenditure collected by the Board of Trade, and recently analysed in these columns, gave details of the outlay of 34 working-class families, comprising 180 persons, and with an aggregate yearly income of 42,493. The total expendi- ture of these families upon dutiable articles other than drink and tobacco is returned at about £107 per annum, and the taxation upon this expenditure amounts, in round figures, to £32. In other words, each of these 34 families, consisting, on an average, of five persons, and with an average income of £73 a year, con- tributes to the Imperial Treasury in the shape of taxes on tea, cocoa, and coffee about 18.5. 6d. a year, or 40. a week."

It may be said, quite justly, that to exclude liquor is un- fair, because the workman wants his beer to make up the proper stimulating quality of his food. Very good ; we should concede that at once, though Sir Wilfrid Lawson will not ; and how then does the matter appear ? This is the answer :— " The total expenditure of the 34 families upon dutiable articles other than tobacco is returned as follows :-

Tea

Expenditure for Week.

£111 41

Equal to Annual Expenditure of

£8111 6 Coffee 0 5 61 14 8 2 Cocoa 0 4 2i 10 18 10 Beer 015 21- 39 10 10 Taking the price of tea at Is. 6d. a lb., that of coffee and cocoa at is. a lb., and that of beer at 4d. a quart, this annual expenditure represents a consumption of 1,088 lb. of tea, 288 lb. of coffee, 219 lb. of cocoa, and 593 gallons of beer. Let us now see what the duties chargeable upon this consumption amount to. The statement in- cluding the estimated consumption of tobacco is :—

Quantity

Con.umed. Rate of Duty. Amount of Day Payable.

Tea 1,088 lb. 6d. per lb. £27 4 0 Coffee 288 lb. 2d. per lb. 2 8 0 Cocoa 219 lb. 2d. per lb. 1 16 6 Beer 593 gals. 24d per gall 5 7 0 Tobacco... 270 lb. 3s. 2d. per lb 42 15 0 Total

£79 10 6 To this total some slight addition should be made on account of the expenditure on dried fruits, which are subject to a small duty. With this addition, the total amount of taxation may be set down, in round figures, at 480. And this is the total contribution to the Imperial Treasury out of incomes amounting in the aggregate to £2,493. In other words, the proportion of taxation to income in the recorded cases amounted, on the average, to only 3.2 per cent. This is equal to about 71d. in the X, and the evidence of the returns which the Board of Trade has collected is thus to the effect that the whole taxation of the working classes amouats to not very much more in the than the classes above them pay in Income-tax alone."

Now, how much further are we to go in this direction ? We can understand a Radical thinking that only property ought to be taxed ; but then, let all property be taxed, the workmen's as well as the millionaires'. Or we can under- stand a financier saying that he reserves taxes on the whole community—taxes, for example, like those on sugar, tea, and beer—for times of emergency ; but then, let that policy be avowed and discussed, and the workmen brought clearly to understand it. At present the theory is that all should be taxed, roughly speaking, on the principle of equality ; but recent legislation has carried the facts far beyond that point. The well-to-do now pay in direct taxes nearly as much as the handicraftsmen do in all their taxes, and then pay their indirect taxes over and above. It is time that these facts should be made clear in Budget dis- cussions, and that we should at least know the central idea upon which Parliament is proceeding. If the well-to-do are to pay "ransom," as Mr. Chamberlain once put it, they ought at least to have the credit of paying it in the popular eyes.

As we are upon this subject, we desire once more to remonstrate, however uselessly, against the neglect by successive Chancellors of the Exchequer of the taxes which really fall heavily upon the people, and especially upon those whose lot Mr. Goschen so bewails. Struggling people in the great cities feel rates, not taxes. Mr. Goschen's clerk or small tradesman, with £500 a year, lodges himself in London in a suburban house of .R50 a year—a tenth of his income is a moderate proportion; it is often a sixth—and pays on that £15 a year in rates. These rates are never lowered. On the con- trary, they are increased every five years by arbitrary increases of assessment, made sometimes in the very teeth of facts, as, for instance, in the last assessment, when many houses in one great district of London were raised while rentals were falling. There is no scientific valuation, no easy method of appeal, and practically an inconceivably small amount of popular control. The Local Boards, especially in the suburbs, spend just what they like, and though they are, we believe, fairly honest, they sometimes muddle away money in the most egregious style. The Chancellor of the Exchequer does not care, because he is not responsible ; the President of the Local Government Board is afraid to interfere with local independence; and the Members for London, who could soon force reform, shirk a most irksome task which will bring upon them the hatred of all the local "interests." The Tory Party con- fines its attention to rural taxation, which is consequently getting moderated, and the Liberal Party has an idea that lighter rates only enrich the landlords they detest. The whole subject of the incidence of rating in great cities needs investigation, not by a Committee or a Commission which will elicit nothing and do nothing, but by a financier of the PeeL or Gladstone or Goschen calibre, who, when his mind is once made up, dare ask Parliament to pass a sweeping reform. Even the House of Commons, when it deals with finance, calls in a master of finance to help it ; but the great revenue of London is raised by groups of vestrymen about as competent to manage such a business as any other men in the street. It is too bad, and all the worse because we know from the experience of thirty years that there is not a chance of redress, and that we shall neither have in a London parish the low rates of a village, nor the carefully planned though large expenditure of a city like Birmingham.