Parliamentary History. 39 GEORGE THE THIRD, A. D. 1798. THIRD SESSION OF THE EIGHTEENTH PARLIAMENT OF GREAT BRITAIN. [Continued from Vol. XXXIII.] DEBATE on Mr. Pitt's Proposition for a Tax upon Income.] December 3, 1798. The House having resolved itself into a committee of Ways and Means, Mr. Pitt moved, that the act of the 38th of his present majesty, chap. 16, for granting an aid or contribution to his majesty, might be read, and that it might be an instruction to the committee to consider of the said act; which being agreed to, million will be wanted to discharge that amount issued in exchequer bills. Under the article, then, of army expenditure, there remain the extraordinary services of the year 1799, which I may put at two millions. Thus the total amount, under the head of army will be 8,840,000l. including the one million for the discharge of exchequer bills issued, and two millions for the extraordinary services of 1799. Under the head of ordnance services there has been voted 1,570,000. The above sums, with the addition of the miscellaneous services, swell the total of the supply to 29,272,000l. Towards raising this supply the same resources will be applicable as are applicable at all periods, whether of peace or of war. The land and malt have always been taken at 2,750,000l. There remains the lottery, 200,000l. and the growing produce of the consolidated fund, which I take at 1,500,000l. In ad Mr. Pitt addressed the committee as follows: Before I proceed to submit to the committee the very important mat-dition to this, a tax was laid in the last ters which form the subject of this day's consideration, I conceive it necessary to state the amount of the total services of the present year, and of the ways and means applicable to those services. The total sum voted for the ordinaries and extraordinaries of the navy and transport services amounts to 13,642,000l. being the same sum, within a very small amount, as was granted last session. The next head of expense is the army, the estimates of which amount to $840,000l. The extra ordinaries, to be incurred in 1798, were stated at 3,200,000l. There was also a vote of credit for one million, applicable to unforeseen expenses. This vote of credit will cover all the extraordinary expenses to the end of the year. But with respect to the vote of credit for this year, one [VOL. XXXIV] session upon the exports and imports founded upon the peculiar situation of our trade, as it then stood. That tax has not only yielded to the full amount of what I estimated it at, but has even exceeded it. That duty I estimate at 1,700,000l. The above articles form a total of 6,150,000%. The remainder must be raised either by a tax within the year, in the same manner as the assessed tax bill of last year, or by a loan. The sum to be provided for is upwards of 23 millions. Gentlemen will recollect, that, in the debates upon the subject of the assessed taxes last session, two fundamental principles were established as the rule by which we should be guided in providing for the supplies for the service of the year. These were, first, to reduce the total amount to be at pre[B] sent raised by a loan; and next, as far as it was not reducible, to reduce it to such a limit, that no more loan should be raised than a temporary tax should defray within a limited time. In the first place, the tax acceded to by the House last session was for the purpose of providing for the supplies of the year; and in the next place, for the purpose of extinguishing the loan raised in that year. From the modifications, however, which that measure underwent, the produce was considerably diminished. Other means, indeed, were adopted to remedy the deficiency thus occasioned. The voluntary and cheerful efforts which, so honourably to the country, came in aid of the deficit of the assessed taxes, and the produce of the exports and imports beyond the estimate, brought the amount of the sums raised to that at which they had been calculated. The different articles were estimated at 7 millions, and this sum is fully covered by the actual receipt under the different heads. The produce of the assessed taxes, under all the modifications, and all the tricks and evasions, is yet four millions. I had taken it at four and a half after the modifications were adopted. This deficiency is supplied by the excess on the head of voluntary contributions. Instead of 1,500,000l. the voluntary contributions already exceed two millions; and the sum of 74 millions for which credit was taken, has been effective to the public service. Satisfactory as it must be to review the circumstances to which we owe these advantages, and the benefits which the mode of raising the supplies to a considerable extent adopted last session has produced, it is unnecessary for me to state, that, however the principle may deserve our approbation, it is much to be desired that its effects should be more extensive, and its application more efficient. By the causes to which I have alluded, the full advantage of the principle has not been obtained. The wishes and the interest of individuals, I am sure, must unite in demanding a more comprehensive, a more equal and a more vigorous application of a principle, the rare advantages of which we have been able to ascertain, if we have not yet been so fortunate as to enjoy. Last session those who acknowledged the importance of the principle of raising a considerable part of the supplies within the year, confined their objections to the proportion fixed upon the scale of the assessed taxes, as unequal in its application, and liable to great evasion in practice. Though not insensible of the weight of the objection, I then felt it my duty, convinced as I was of the immense advantages of the system to adopt some visible criterion by which to estimate and to regulate the extent of contribution, if it was not possible to devise means of embracing fully every class of property, and every source of contribution. I felt it materially important to follow some durable, some apparent and sensible criterion, by which to apportion the burthen. At the same time I felt, that although the assessed taxes furnished the most comprehensive and efficient scale of contribution, there necessarily must be much income, much wealth, great means, which were not included in its application. It now appears that not by any error in the calculation of our resources, not by any exaggertion of our wealth, but by the general facility of modification, by the anxiety to render the measure as little oppressive as possible, a defalcation has arisen which ought not to have taken place. Yet, under the disadvantage and imperfections of an unequal and inadequate scale of application, the effects of the measure have tended to confirm our estimates of its benefits, and to encourage us to persevere in its principle. Every circumstance in our situation, every event in the retrospect of our affairs, demonstrates the advantages of the system of raising a considerable part of the supplies within the year, and ought to induce us to enforce it more effectually to prevent those frauds, which an imper. fect criterion and a loose facility of modi fication have introduced; to repress those evasions so disgraceful to the country, so injurious to those who honourably dis charge their equal contribution, and, above all, so detrimental to the great ob. ject of national advantage which it is intended to promote. In these sentiments, our leading principle should be to guard against all evasion, to endeavour by a fair and strict application, to realize that full tenth, which it was the original purpose of the measure of the assessed taxes to obtain, and to extend this as far as possible in every direction, till it may be ne, cessary clearly to mark the modification, or to renounce, in certain instances, the application of it altogether. If, then, the committee assent to this principle, they must feel the necessity of following it up, by more efficient provisions. They will perceive the necessity of obtaining a more specific statement of income than the loose scale of modification, which, under the former measure, permitted such fraud and evasion. If such a provision be requisite to correct the abuses of collection, to obviate the artifices of dishonesty, to extend the utility of the whole system, it will be found that many of the regulations of the old measure will be adapted to a more comprehensive and efficient application of the principle. If regulations can be devised to prevent an undue abatement, and to proportion the burthen to the real ability, means must be employed to reach those resources which it is impossible under the present system of the assessed taxes to touch. Experience proves that we must correct and remedy, in order to secure the advantages which the measure is calculated to afford. It is in our power to make them our own. I think I can show that whatever benefit the principle upon which we have begun to act, is fitted to bestow, may by a liberal, fair, and efficient application, be carried to an extent far greater than has yet been obtained, an extent equal to every object of great and magnanimous effort, to every purpose of national safety and glory, to every advantage of permanent credit and of increased prosperity. operate in the desirable purpose of obtaining by an efficient and comprehensive tax upon real ability, every advantage which flourishing and invigorated resources can confer upon national efforts. The details of a measure which attempts an end so great and important, must necessarily require mature deliberation. At present all that I can pretend to do is, to lay before the committee an outline of a plan which endeavours to combine every thing at which such a measure ought to aim. This outline I shall now proceed to develope to the committee as clearly and distinctly as I am able. It will occur to every one to inquire what species of commissioners shall be vested with the power of fixing the rate of assessment under a measure which must leave a considerable discretionary power, In such commissioners several qualifications are in a particular manner desirable. They ought to be persons of a respectable situation in life; as far as possible removed from any suspicion of partiality, or any kind of undue influence; men of integrity and independence. From the experience we have had of the benefits derived from the voluntary exertions of such a body of commissioners, we may be able to ascertain in what classes to look for men qualified for the important functions which the office would impose. Still, however, I should consider it necessary to vary somewhat from the mode pursued in forming the commissioners of the land tax. After much consideration, it occurs to me that, out of the commissioners appointed under the act for assessing the land-tax, a certain proportion should be taken with given qualifications; and that no man should be admitted to act as commissioner for the purposes to be afterwards specified, who does not possess 300l. per annum. these, other persons of similar qualifications should be added, and the list so framed should be referred to the grand jury, or those who have served on the two last grand juries to form the commissioners. In case the party is dissatisfied with the decision of these commissioners, another body of commissioners should be formed, to whom an appeal may be carried. In commercial towns some special provisions will be necessary, adapted to the nature of circumstances. Το Impressed, then, with the importance of the subject, convinced that we ought, as far as possible, to prevent all evasion and fraud, it remains for us to consider, by what means these defects may be redressed, by what means a more equal scale of contribution can be applied, and a more extensive effect obtained. For this purpose it is my intention to propose, that the presumption founded upon the assessed taxes shall be laid aside, and that a general tax shall be imposed upon all the leading branches of income. No scale of income indeed which can be devised will be perfectly free from the objection of inequality, or entirely cut off the possibility of evasion. All that can be attempted is, to approach as near as circumstances will permit to a fair and equal contribution. I trust that the opinion of the country will concur with the disposition of parliament to give that energy to our exertions, to give that stability to our resources, which our present situation The next point for consideration, is the and our future prosperity demand. I mode of contribution which shall be adopttrust that all who value the national ed. On this head it is my intention to honour and the national safety, will co-propose, that no income under 60: a year shall be called upon to contribute, and that the scale of modification up to 2001. a year, as in the assessed taxes, shall be introduced with restriction. The quota which will then be called for ought to amount to a full tenth of the contributor's income. The mode proposed of obtaining this contribution differs from that pursued in the assessed taxes, as instead of trebling their amount, the statement of income is to proceed from the party himself. In doing this it is not proposed that income shall be distinctly laid open, but it shall only be declared that the assessment is beyond the proportion of a tenth of the income of the person on whom it is imposed. In this way, the disclosure at which many may revolt will be avoided, and at the same time every man will be under the necessity of contributing his fair and equal proportion. How then it will be asked, is evasion and fraud to be checked? Knowing the difficulty of guessing what a man's real ability is, I do not think that the charge of fixing what is to be the rate, ought to be left to the commissioners. It would, I am persuaded, be most acceptable to the general feeling, to make it the duty of a particular officer, as surveyor, to lay before the commissioners such grounds of doubt, as may occur to him on the fairness of the rate at which a party may have assessed himself. These doubts, and the reasons on which they are founded, are then to be transmitted by the surveyor to the commissioners, in order that they may call for farther explanation from the person concerned. When in the case of the assessed taxes we have had so much experience of the evasions which have taken place; when we see the consequences which have resulted from a vague rule of exemption, and an indefinite principle of deduction: when we see that, by the different modes by which exemptions were regulated, persons, who probably would have shrunk from a direct fraud, have been able by different pretences to disguise the fair and adequate proportion which they ought to have contributed, becomes more than ever necessary to render every case of exemption precise, and to guard every title to deduction from the danger of being abused. At the same time, under every disadvantage of the unrestricted application of deduction, and the easy commission of fraud, we have yet ample proof of our national wealth and general honesty. To prevent the country from suffering by dishonesty, to prevent the willing contributor from being taxed to the utmost proportion of his means, while his wealthy neighbour owes his exemption to meanness, it is necessary to guard with greater strictness against every chance of evasion. When doubts are entertained that a false statement has been given, it shall be compe tent for the commissioners to call for a specification of income. It will be necessary to simplify and to state with precision the different proportions of income arising from land, from trade, annuity, or profession, which shall entitle to deduction. The commissioners are then to say whether they are satisfied with the statement which has been given. The officer or survey or is to be allowed to examine and to report whether there appears reason to believe that the assessment is adequate. When the day of examination arrives, the commissioners shall hear what the surveyor and the party have to allege in support of the objection and the assessment, and examine other individuals. The schedule, which shall be drawn up in such a manner as accurately to define every case of exemption or deduction, shall be presented by the party, with his claim clearly specified. To the truth of the schedule he shall make oath. party, however, shall not be compelled to answer; his books shall not be called for, nor his confidential clerks or agents examined. If, however, he declines to submit to the investigation of his books, and the examination of his clerks, and other means of ascertaining the truth, it shall be competent for the commissioners to fix the assessment, and their decision shall be final, unless he appeals to the higher commissioner. No disclosure is compulsory; but if the party is unwilling to disclose, he must acquiesce in the decision of the commissioners, who shall not be authorized to relieve without a full disclosure. The I This, I am perfectly ready to admit, gives to the commissioners considerable power; but I think I have stated enough to show to the committee, that, unless some such powers be afforded under this act, the real and substantial effect of the measure will be entirely defeated. think, too, I have proved, that commissioners, selected in the manner I have described, are as likely to be as free from all undue influence, and to act with as much integrity and honour, as any other set of men whatever. If, however, a better mode should be suggested, so far from opposing it, I shall consider it as a melioration and improvement of my plan. With respect to the information which may be communicated to the commissioners, I should propose that they shall be strictly sworn not to disclose such information, nor to avail themselves of it for any other purpose separate from the execution of the act. If any statement, however, should be made upon oath, which the commissioners shall think to be false, and which they may wish to bring to a trial, it must be obvious to the committee that then there ought to be afforded the means of carrying on a prosecution for perjury. But on no other ground should there be any disclosure of facts by the commissioners, or any of the other officers appointed to carry the act into execution. and injury to them, perhaps, than to a higher description of mercantile traders. I wish, therefore, the committee to consider whether it may not be as well to leave that class to pay on the mitigated rate of assessment to which they are liable under the assessed tax bill, as to subject them to the general rate of the present bill. It will also naturally enter into the consider. ation of the committee, what allowances or exemptions ought to be extended to other descriptions of persons. In the last act, certain allowances and abatements were granted to persons with large families. That principle it will certainly be proper to extend to this measure; and the only doubt which I entertain upon the subject is, whether it was carried far enough in the bill of last year. If this suggestion be admitted, it will naturally be a matter of doubt, whether the principle in the last bill, with respect to persons having no families, ought not to be extended. It will also very reasonably occur to the minds of the committee, that it is of the utmost importance to the due execution of the act, that, as far as the general principles can be laid down for establishing a rate of landed property, or what may be the proper average of incomes which are subject to average, the rates in the last act should be subject to correction and improvement. By the operation of these powers, and by the influence of these rules, we may expect to arrive more nearly at that fair proportion which each man ought to contribute towards the exigencies of the country. Having laid down these general principles and outlines, I cannot feel, that if commissioners of the description I have alluded to can be found, bound to execute their duty fairly and impartially, and sworn to secrecy-I say, if such men can be selected, I cannot feel, however strong the objections may be against the disclosure of circumstances, that any statement made to such commissioners is liable to the general objection against public disclosures of the incomes and circumstances of individuals in a commercial country; at least, I am sure there is every disposition in the plan to guard against it. There is little danger, I conceive, that such commissioners will act partially, or conduct themselves vexatiously; and, in my opinion, there does not remain any fair ground for jealousy in individuals, that a disclosure to such men will give to persons in the same line of life any advantages over them. Perhaps, however, Sir, there is once class of men to whom it may be for the committee to determine whether they ought not to remain exceptions to the act. Among the descriptions of persons to whom it may remain for the committee to consider whether a disclosure would not be detrimental, is the class which includes the poorest persons engaged in mercan-grounds upon which I proceed. And tile concerns; a class whose gains are most precarious, whose credit may be most doubtful, and most injured by a disclosure-I speak of the persons engaged in retail trades, to whom the assessed tax bill of last session gave great indulgencies, considering that the relief of abatement was one of which they could not avail themselves, without greater inconvenience The next consideration is one liable to more difficulty and doubt, upon which gentlemen will be aware that every thing must be conjectural, but in which we are still not without lights to guide us-I mean as to the probable amount of a tax of this kind. The committee must be convinced, that what I shall state will be with doubt and uncertainty. I shall, however, submit to the view of the House the information I have collected, the authorities with which I am fortified, and the first, Sir, I shall proceed to state what is the first great object of income. I mean the property derived from land. Upon this point I have consulted the best opinions, and authors of the most acknowledged merit. Upon the subject of the rent of the land of this country, sir William Petty is the earliest author I have consulted. At the time he wrote, the |