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nity may be classed under the three fol- | might be desirable to impose little or no lowing heads-1st, as it occasions a duty, either on account of the peculiar direct loss to the revenue; 2nd, as it difficulties of producing them, the facility gives rise to an enormous expense in the of smuggling, or from other moral or pomaintenance of a police, and a military litical considerations. It is satisfactory and naval force for the preventive ser- to find, that correct principles on these vice; and, 3d, as it tends to injure the subjects are gradually working their way morals of the people, by familiarizing from the study of the philosopher into the them with the violation of the law-a vio- Cabinet, and the House of Commons. lation which is attended with conside- Not many years have elapsed since such rable profit, without subjecting the offen- principles were mentioned in parliament der to popular odium, The inducement only to be treated with contempt, as the to smuggle depends, of course, upon the visionary speculations of theoretical reaprofit of the smuggler; and it is evident, soners, whereas at present, owing, we that with some slight limitations, this pro- must say, to the efforts of Mr. Rifit amounts to the whole of the duties due cardo (whose irreparable loss we are upon the smuggled goods, deducting the only beginning to deplore), and to the additional expenses occasioned by the pe- liberal opinions of the more enlightened culiar difficulties of the contraband trade part of the Cabinet, there appears to be and the occasional losses from detection. every probability of their forming a perThe duties upon some articles are at this manent basis of our financial system. moment so high, that we have heard it Our prospects are the more encouraging, stated, that if the smuggler can land in as all the liberal measures of the present safety only one cargo out of three, he will Chancellor of the Exchequer have hitherto be amply recompensed for his trouble and been attended with signal success; and, expence, though he lose the other two. instead of the revenue being diminished, In order then to diminish to the utmost it is calculated that at the expiration of the inducement to smuggle, we should this and the two following years, there endeavour to reduce all our duties to the will be a clear surplus to the amount of lowest possible rate; that is, we should upwards of four millions*. It became a make them all, as nearly as possible, equal most important question to determine in ad valorem duties. A very common er- what way this surplus of revenue should ror has prevailed amongst legislators on be disposed of, so as to afford the greatthis subject. It has been thought, that if est relief to the people; a question which an article, from any cause, becomes re- under one shape or other was the subject duced in price, it is the better able to of most of the financial debates during bear taxation and the proposition is the last Session of Parliament. Two difperfectly true, if it be meant that Govern- ferent plans have been proposed for this ment is the less likely to receive com- purpose: the one, to abolish altogether plaints from the contributors. But if the the house and window duty, and the rest prevention of smuggling be a desirable of the assessed taxes; the other, to reduce object, instead of increasing we ought to those duties which press upon our trade diminish the duty with the diminution of and manufactures. The former of these the price of the article; because the temp-measures was certainly the more popular, tation to smuggle is, as we have shown, nearly proportioned to the amount of the ad valorem duty.

and was warmly supported by most of the members for large towns; but the latter was adopted by the Chancellor of In adapting the principle we have just the Exchequer. The assessed taxes are expounded to practice, considerable mo- unpopular because they are paid didifications will be required. In the pre-rectly by the consumer to the tax-gasent state of this country it would be ne-therer; whereas, when the duty is imcessary to proceed to the equalization of posed upon an article in the course of its our various duties with a cautious hand, and with a careful regard to existing interests. It might be also necessary to introduce some permanent modifications of the principles which we have endeavoured to establish. Thus, for instance, there may be some commodities on which it

manufacture, the consumer probably is not aware, or forgets, how large a proportion of the price is caused by the tax. It is, of course, a mere fallacy to suppose that, because the process is less direct, the

See ante, p. 351.

duty is not as certainly paid by the consumer in the latter case as in the former. Instead, therefore, of considering the circumstances which attend the collection of the assessed taxes as a disadvantage, we consider them to be precisely the reverse; because we think it highly desirable that the people should be acquainted with the sums which they really contribute towards the expenses of the state. There is also another advantage attending the assessed taxes, too considerable to be passed over in silence, which is, that they are not easily evaded, and that the expence of their collection is comparatively small, being not more than 51. 15s. 8d. per cent. A variety of objections have, however, been urged against them, the force of which it is our present object to consider.

articles on which they are imposed. In deed, this argument, if it would hold at all, seems to be properly directed not so much against the existence of these duties, as against their amount.

It has been stated by many members, that they fall oppressively upon the poor. Now, without examining the question, whether those taxes which are charged upon the poorer classes are really paid by them in the end, and without inquiring whether the principle be correct-that is, the principle of taxing the incomes of the rich in a greater proportion than those of the poor;--it may be sufficient to observe, that the fact is in this case mis-stated: since all houses, of which the annual rent does not exceed 101., are now exempt from the house-tax, and all, in which the number of windows does not exceed 7, are exempt from the window-tax; so that, in fact, the labouring classes, and the very small capitalists, are no longer called upon for any direct contribution towards the assessed taxes*.

Another argument has been urged in favour of the repeal of these duties, by Mr. Leycester, who is reported to have given it as his opinion, that if "these "taxes were taken off, the revenue would "lose nothing, as the country would "be richer, and the consumption on all "hands would be greater+." Now

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There is an important subject, with regard to the house and window duties, which does not appear to have been touched upon by any speaker in the House of Commons, in the course of the debates; we mean the question, On what classes of the community they ultimately fall? It seems to have been assumed by all parties, as a matter of course, that they are in all cases really paid by the persons on whom they are nominally charged; an opinion which we shall easily discover to be far from correct. The house-tax is an annual per centage on the estimated rent. Now in ordinary cases, where a house possesses no peculiar advantages of situation, its rent amounts to little more than the usual profits of stock upon the capital which has been expended in its construction. It is evident, therefore, that in this case no part of the tax can fall upon the owner, because, if it were so to do, the profits derived from this particular employment of capital would be reduced below the usual rate. Since then the tax will not be paid out of the rent of the owner, it must fall upon the consumer, and will operate exactly in the same manner as an increased expence in the annual repairs. When the house is occupied merely as a residence, and not for the purposes of trade, it will fall entirely upon the tenant; exactly in the same manner as duties upon carriages and horses. But whea the house is occupied either wholly or in part as a shop or manufactory, the tax will be paid either wholly or in part by the consumers of the goods which are sold or manufactured on the premises; since it must operate in raising the prices of the commodities, exactly in the same manner as a tax upon the machinery by which they are manufac tured f.

Precisely the same argument will hold with regard to the window-tax, which, it may be shewn in the same manner, will fall in the one case on the tenant, in the other upon the consumer,

We of course suppose the trade or marufture to be of such a nature as to require the redence of some person on the premises, and m sequently to subject the building to the hes duty.


at strictly so

house-tax which falls upon rent called, as it is paid solely by the owner, and has no tendency either to diminish profits or to increase the price of any commodity. Even by the owner this

but never upon the owner. Yet we find Mr. Hobhouse, in his speech, on moving for the repeal of the windowtax, declaring that no benefit had "resulted to the poorer classes from "the repeal of the window duties on "houses having not more than seven windows, because the tax was paid "not by the tenants, but by the landlords." We may just observe, that if this statement had been true, it would have furnished an excellent argument for his opponents; but we think we have already said enough to prove that it is incorrect.

We come next to consider the case of those houses, of which the rent does not consist wholly of the profits of the capital expended in their construction, but for which an additional sum is paid by the tenant on account of peculiar advantages of situation. This additional sum is all which would come under the denomination of rent in the strict sense of the term. Now, since the utmost which the tenant is willing to pay for these peculiar advantages, is, of course, obtained by the owner; and since there is no reason why the imposition of this duty should make him willing to pay more; it follows that the tax, so far as it falls upon this portion of the rent, is paid not by the tenant, but by the owner. We see, therefore, how unfounded are the complaints of some of the inhabitants of London and other large towns, who imagine that the house-tax presses with peculiar severity upon them. It is perfectly true that their houses are charged at a higher rate than houses of a similar kind in the country, because they pay a greater rent; but if this additional charge were to be abolished, the tenant would receive no relief, as it would enable the owner to raise his rent just so much the higher. Indeed, we are of opinion, that amongst all the taxes which at present exist in this country, there is none which is altogether so unexceptionable as this part of the

*Ante, p. 360. We have used the term owner, in preference to that of landlord (as we should gladly, when speaking of houses, have substituted another word for rent), in order to avoid confounding the landlords and rents of houses, with the landlords and rents of land; between which persons and things the difference is essential. The landlord of a house is, for the most

part, in the situation of a capitalist, and his rent is the profit of stock.

tax can now scarcely be considered as oppressive, because he has, probably, in most cases purchased the property subject to the tax; and because the duty increases progressively with the increase of his income an increase which is the effect, not of his own exertions, but of circumstances over which he has no control.


Before we take leave of the subject of the assessed taxes, it will be right to notice an objection to the window-tax on which Mr. Hobhouse has laid great stress in the speech we have already alluded to; that is, its inquisitorial nature. In an inquiry of this kind, too much care cannot be used to avoid being misled by words. Inquisitorial, as applied to a tax, is a term which at present is in bad odour amongst the people of this country, from the circumstance of its having been applied to the income-tax; a tax, which, though on some accounts desirable, was on others deservedly unpopular. slightest reflection will be sufficient to convince us of the enormous difference between these two imposts, as regards their inquisitorial nature. So long as the income-tax was in existence, every individual was compelled annually to make a disclosure of the amount of his income to certain agents of government; a disclosure which might, in some cases, be productive of bankruptcy or other evil consequences; and, in case of surcharge, his only appeal lay to certain commissioners, appointed by government, who generally resided in his immediate neighbourhood, and who might, therefore, in many cases, be influenced by personal hostility, or by local or political prejudices. The only circumstance of an inquisitorial nature about the window-tax, is that an inspector, appointed by government, has the power of entering all houses twice in the year, at reasonable hours, for the purpose of ascertaining the number of windows; a power, which as far as we can learn, has never been abused, and which we cannot imagine to be productive of much inconvenience. Much less can we agree with Mr. Hobhouse, when he asserts, that "he was not exaggerating, "when he said, that a gentleman received

" from the tax-gatherer the paper of assess❝ment with the same dread, that a Pacha "received the firman of the Sultan." Now, if Mr. Hobhouse were really in earnest when he made this declaration, we must conclude, that he attributes the greatest possible degree of mental imbecility, either to the gentlemen of this kingdom, or to the audience which he was then addressing. We would much rather suppose, that he was indulging in a piece of unmeaning parliamentary declamation.

Having thus attempted to shew, that no peculiarly great advantages are likely to result from the repeal of the assessed taxes, we come now to consider the other plan which has been proposed for the employment of our surplus revenue; we mean, a reduction of those duties which are imposed upon our manufactures and commerce. We have already anticipated a great part of what we had to say upon this subject, in our remarks upon equality of taxation. We have there attempted to prove, that it is desirable, that all taxes upon commodities should be reduced, as nearly as circumstances will allow, to an equal ad valorem duty. It is unnecessary for us to enter into details, to shew how far the present system of taxation is removed from this desirable state, as the fact is generally acknowledged. It is obvious, that we cannot arrive at our object, except by a long course of progressive improvement; but we may, nevertheless, make an immediate and important advance towards its attainment, by appropriating the surplus of our revenue, to the reduction of those duties which are most high, and consequently most injurious. We shall thus, according to the principles which we have already laid down, confer a considerable benefit upon the consumer at a small expense, and we shall also diminish as far as possible the temptation to smuggling and adulteration. We shall also, by removing restrictions on our commerce, promote an advantageous intercourse with other countries, an intercourse which is highly desirable from its tendency to diminish national antipathies, and to prevent wars; and we shall at the same time be setting a good example to other nations, which it is to be hoped, they will in time be induced to follow.

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We shall not, however, enlarge on this important subject, as it belongs more properly to the department of trade.

There remains to be considered an objection against the reduction of duties on commodities, which we have not yet noticed; which is, that the reduction would be beneficial only to the merchant and manufacturer, and not to the consumer. This argument appears upon the face of it so preposterous, that we should not have hesitated to pass it over without notice, had it not been seriously advenced by Mr. Brougham. That gentleman is reported to have said, that

"He thought that it would be much better at once to remove the assessed taxes, than to take

away those which pressed indirectly upon the public. ... Of what use was it to take off a portion of the tax on any article, when the reduction was met, by a nearly correspondent rise on the part of the vendert?"

We should have thought, that a superficial knowledge of the principles of political economy would have been sufficient to have prevented any person's venturing to assert so untenable a proposition as the one contained in this passage. If it be true, as it was laid down in the Wealth of Nations, and as it has been agreed by all political economists for the last half century, that profits are maintained at the same rate in all employments by competition, it must necessarily follow, that when a tax is reduced, the competition of the merchants, or manufacturers, will cause a corresponding reduction in the price of the commodity, since they would otherwise be enabled to pocket more than the ordinary profits of stock. Indeed, on the same principle, Mr. Brougham ought to maintain, that the tax has in all cases been paid by the producer, and not by the consumer, and that consequently its reduction, instead of being a boon to the former, is nothing more than a tardy and bare act of justice, by which his profits are raised to the same level as those of other trades. It may, indeed, be perfectly true, that duties may on some occasions have been reduced, without any corresponding reduction in the price of the commodity; because other circumstances, with which we are unacquainted, may have operated at the same time, to cause a rise of price: it will, of course, be very easy to find instances of this

Ante, p. 357.

kind, if we pick out cases in which the reduction has been but small, and where the commodity is subject to considerable fluctuations in price, but it is manifest, that such instances can do nothing to invalidate the general principle. We can also conceive a possible case-though we believe it to be a very rare one, in which the trade might be confined to so small a number of persons, that they might, by combining together, prevent an immediate reduction of price. Such a combination, were it ever practicable, would be necessarily of very short duration; and even this temporary combination might be entirely prevented by a refusal on the part of government, to allow the drawback on the stocks on hand. Having concluded this part of our subject, it will be seen, that we are disposed to agree with the Chancellor of the Exchequer, as to the propriety of applying the surplus of our revenue to the reduction of our indirect, rather than of our direct taxation; because, on the one hand, we see scarcely any advantage likely to arise from the abolition of the assessed taxes, beyond the mere relief from so much taxation: whilst on the other, we think, that the reduction of some of our enormously high duties will be productive of considerable benefit to the consumer, at small expense to the revenue; will tend to put an end to all the various evils arising from smuggling and adulteration; will promote an advantageous intercourse with other nations, and may be the means of inducing them to follow in our steps. We are glad, therefore, that the Chancellor of the Exchequer has had sufficient firmness to resist the temptation of sacrificing a sound principle to the acquisition of temporary popularity. At the same time, we think he has acted with discretion in abolishing such of the assessed taxes as were productive of a comparatively trifling profit to the revenue, whilst at the same time, they were inconvenient, or vexatious in their operation, difficult, or expensive in collection, or inexpedient from other considerations not necessary to be here enumerated. Such were the house-tax on houses of a rent not exceeding 101. per annum; the window-tax on houses containing not more than seven windows, and the duties on interior windows, taxed carts, poney-carriages, and various other articles, upon which the total loss to the revenue is estimated at 276,000l.

Having thus expressed our concurrence in the general principles which have guided the Chancellor of the Exchequer, we must next consider in detail the cases which it has been thought proper to select for a reduction of duty. We shall first consider the arguments which may be urged, for or against a reduction of duty in these particular instances; and we shall then proceed to notice the case of other highly taxed articles, on which the duty remains undiminished. We shall thus be enabled to determine, as far as is in our power, whether the selection of the Chancellor of the Exchequer has, or has not been judicious.


We shall begin with coffee. duties upon this article were previously to the reduction, as follows:-Upon West India coffee, 1s. per lb.; East India, 1s. 6d.; foreign, 2s. 6d. They have all been reduced one half, by which it is calculated, that the revenue will be diminished to the amount of 150,0001. The principal argument in favour of this reduction, has been deduced from the fact that, since the imposition of the last duty, in 1819, the consumption of coffee has not increased in the same proportion as that of other commodities. This argument derives additional force from the fact, that a cheap, wholesome, and not unpalatable substitute for coffee has been lately introduced; the sanction of the legislature having been obtained for the sale of roasted corn, the use of which was, till lately, prohibited by the construction given by the courts to an act of parliament. There was reason, therefore, to apprehend, that unless the price of coffee could be reduced, its use, amongst a large portion of the community, would be entirely superseded by the introduction of this article. The reduction of the duties on coffee has been further recommended on the ground, that it would be particularly desirable at the present moment, as a boon to the West India interest, who are stated to be labouring under great depression. There is also another advantage attending this measure, which we ought not to pass by unnoticed; which is, that it will tend, in some degree, to place our own possessions in the East and West Indies, as well as foreign countries, on a more equal footing in the production of this commodity. West India coffee previously possessed an advantage of 6d. per lb. over East India, and of 1s. 6d. per lb. over foreign coffee: whereas this

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