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den of indirect taxation in the form of deprivation ; if he succeed in keeping up his income by placing on other articles the profits he would have had from currants , then the purchasers of those other articles pay the tax , although , in fact , the currants are not consumed . In order to avoid so much of those consequences as consists in deprivation of use , accompanied , of course , with diminution of revenue , it has sometimes been attempted to place the tax on articles so necessary that none shall evade the use of them . But it is impossible to know to what degree an article is necessary ; and if this be not known , it is equally impossible to judge how far consumption will be shortened under the
weight of a tax . If a tax were now laid on gas , young men might think that multitudes could not escape its pressure ; but those of us who happen to be old enough to remember the days of tallow candles , know with how little artificial light the world will jog on . We complain of our present supply of water to London , averaging one hundred and sixty-four gallons per house per day , and we might think water such a necessity , that no tax could diminish the use of it : but , down to the reign of James I ., London had not one-fourth of the water in proportion to the population , artificially delivered , which it has at present . We know not how many people are now compelled to walk every day in London , by the absurd taxes on street conveyances .
Two taxes deserve , in this view , especial notice . First , our own tax on corn , —a case which is not invalidated , for our argument , by the protectionist object of its imposition . Eecent facts have shown that five millions of quarters of wheat may be imported annually as an additional consumption , without any addition to the population , —that is , since a quarter of wheat suffices for a year ' s consumption of one person , the tax on
corn deprived the poorest part of our people of the consumption of as much bread every year as would have maintained five millions of persons during the same time . Since this deprivation fell on only part of our twenty-seven millions of people , probably not on nearly so much as half of them , the facts afford a most impressive lesson pn the extent to which the consumption , even of an apparent necessary of life , may be forcibly contracted by a tax .
The other illustrative case is that of the salt-tax of India . This tax was long defended on the express ground that salt being a prime necessary of life , especially in India , the operation of the tax on it could not be escaped , and that no man would use more salt , if it were untaxed , for it is not a luxury . The facts , however , which come out on investigation , all go to an opposite conclusion . The tax is not uniform in Tndia . It is comparatively light in Bombay ; it is very heavy in Calcutta ; it is an oxcise in the former , a monopoly in the latter presidency . Wages , too , are lower in Calcutta , where the salt-tax is higher .
Instead , however , of the consumption being uniform under the presumed pressure of necessity on the one hand , and absence of mere luxurious inducement on the other , it is found that in Bengal the consumption varies from 41 bs . to more than 401 bs . per head per annum , according to the income of different classes of consumers ; and that in Bombay , the poorest classes use 12 , 16 , or 18 lbs . per head per annum , tho consumption of others rising to more than 301 b . s . Tho compressibility of consumption by ii heavy tax , no matter how important the article taxed , cannot bo doubted after so striking an exhibition of it in the case
of this indispensible condiment . Indirect taxation is necessarily subject to this dilemma ;—either , for the sake of stringency of application , it fixes on what in presumed to be an article of urgent necessity , and then it causes cruel ' sulloring to the multitudes of the poor ; or , to avoid that suffering , it iixes on luxuries , and so affords simple opportunity ¦ for evasion by relinquishment of consumption . Hut in any ease , one of its consequences is , either alway . s , as with some taxes , or very frequently , as with others , to limit the consumption . This limitation is variable , diflbring from time to time with seasons , commercial
movemen t * , and all tho other causes which affect the relation between the average of wages and the cost of living . Under one degree of limitation one set of purlieu pays tho tax , or bears its consequences ; mid under another degree , another is burdened with it . Hut it is altogether impossible- to foresee ; , from year to year , who will pay it , for it is impossible to foresee the ' facts ' on which the question depends ; it is , therefore , equally impossible , for this reason if for no other , to seo whether any indirect tax , or any set of indirect taxes will lay on any given class its fair share of the
public expense . If this be true in respect of deprivation of ( tonsumption , and its commercial consequences , it in equally so in respect of tin ) proportion of tax falling on oitoh person through whoso hands the article puauoH ,
tuipposing it still to be consumed in undiminished quantities . As a component part of the price , the tax is subject to all the commercial vicissitudes of price . Everything which affects profits affects tax also ; and the uncertainty of commercial profit ( not , indeed , on the whole , but as to particular times and persons ) applies just as much to indirect taxation . The party which is commercially the weakest at the moment pays the tax , either in money or deprivation ; but which that party may be in any given future year , or in any remaining part of the present year , nobody can tell . It aggravates the difficulty to remark , that if it is uncertain who will pay the tax at any given time , or in what proportion it will be shared , it is equally uncertain whether the tax will or will not reach the consumer with a
large accompanying profit . For tax having become part of price , is liable to just the same augmentation as any other component part of first cost , if circumstances favourable to the seller permit such an augmentation to be realized . This uncertainty of operation we hold to be fatal to any scheme of indirect taxation . Whatever may be the advantage of government of which any individual may have to pay in his due proportion of its costs , it is utterly impossible to say that any particular impost
will reach him in that proportion ; and if we cannot say that of any one impost , it is obviously impossible to say it of any number of them , and therefore equally impossible to say that one of them compensates another and the result is correct on the whole . Moreover , if a set of indirect imposts could be so adjusted this year as to give , by its complex operation , a true fiscal result , the same set of imposts must fail of the same result next , year , from the ever-varying influence of commercial circumstances , foreign to its nature and objects , to which taxation is most needlessly subjected .
If , then , taxation is not to be the exaction of the strong hand , but a just proportionate contribution to common purposes , indirect taxation is wholly inadmissible , as a device whose uncertainty of effect is incompatible with the conservation of that fundamental principle . We can conceive but two modes in which it can be proposed that indirect taxation should be adjusted in conformity with the principle of just proportionate distribution . The first of these is , that the tax be placed where it will naturally find its way to each person in due proportion . Tins indispensible effect we have discussed above , and we see that its realization is impossible . The second , assuming that every direct tftx
would have some indirect operation , would lay the actual tax , not where the work of govprnment is really done and where the payment for it has properly become due , but where that payment would ultimately place itself by the natural forces of . society . That is—a man who bus paid a tax endeavours to repay himself by means of his labour , his business , or his source of income of any kind ; and it may bo proposed to take the tax where he would take it , and not from the man himself . But here , again , we are met with the fluctuating uncertainties of the times . In no two cases does the ultimate incidence fall alike ; in scarcely any case is it possible to tell Where it really does fall . The principle nttcrly fails in application .
Many errors on this subject arise from supposing that there is something peculiar in this one source of expense—taxation . Hence complications and abstrusities which are never thought of in other matters exactly similar in nature and effect . To giiin some idea of the extent to which this mode of treating the subject misleads us , let us suppose any other source of constant expense , as rent or insurance ; , to bo assessed or paid indirectly . Suppose insurance on a house to be paid by a charge on the couls consumed in it , and we Hhould have a case at least as fair as that of any part
of our existing taxation ; for the quantity of coals consumed in a house is quite as true an indication of the value of the house as either tea , sou ]) , or even rent , is of income , or ius income is of property . The first question would be—Why not go to the properly to be insured at once ? -why take ( his circuitous and unsafe method of using an artificial ratio for the value of that properly , when you may have the value itself ? The next would be— Who really pays this tax ?—tin * consumer of the couls , tho dealer , or the original coalowner ? and in no two years could tho same answer be
given to the question . Another considerable source of error is the putting of averages in tho place of facts . JI may be perfectly true that on tho average the consumor pays tlio tax ; but it is quite consistent with that average that many dealers arc ruined by it H extreme occasional pressure on them . It may l > o true that consumers pay the tax , but it may at tho samo time bo true that some consumers pay through it much more than they ought , and others much less . Ju truth , tho uso of averages in this argurnont requires it to bo proved that tho average of tho
consumption , and consequently ' of the payment of the tax , always ( not merely commonly ) coincides with the average of the payments justly due from the individual to the state . We believe not only that such a concurrence of the averages cannot be shown to exist , but that it scarcely ever does exist . The only justification attempted when we come to this view of the subject is , that we have not the administrative means of carrying out any other system . But here the difficulty is created by failing to ask , first of all , what is the matter for which the tax is to pay ?
The moment a clear sight is obtained of the true relations of the parties , the administrative difficulty vanishes just as in all other cases , ( but for reasons we cannot now stay to discuss ) the working out of a true principle always leads to simplicity of detail and facility of execution , while the original assumption of a false principle involves complexity and obscurity , even where the end can be accomplished at all . There is no practical difficulty ( save the difficulty which is assumed without showing it ) when once a fair definition is established of the object for which taxation is instituted .
Lord Aberdeen , in stating the policy of the Government just installed , said , " I am not going to enter into a discussion of the respective merits of direct and indirect taxation ; it is obvious that in a revenue suchas ours the union of both is indispensable ; and it is to the application of that principle that we look for the prosperity of the country . " To us the direct contrary of this opinion is obvious ; and if the foregoing remarks have any truth in them , they show that indirect taxation is altogether wrong , and not merely a mode of taxation which is open to preference or rejection , or which may or may not be associated with other modes . It radically contravenes the principle on which all justice in taxation rests , and
it only needs that its nature be fairly exposed to ensure it that universal condemnation which has already fallen on political and economical principles , which in their day had as much of plausibility and even of a certain sort of logic in their favour , and as much of the support of Cabinets and Parliaments to guarantee their acceptance . Gradually , but surely , we believe that the principles we have been advocating will find their way to the convictions of honest men in office , and , still more important , to the plain apprehensions of the unpledged multitude . The consequent change in our financial policy we trust will be gradual and cautious , but at the same time firm , ever advancing , and ultimately complete .
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TRIAL BY JURT . Some dozen gentlemen having fayoureel us with letters this week , which all happened to be on the same subject and that not a very new one , we must exercise an impartial severity , and , to avoid offence to any , shut out , as courteously as may be , all these correspondents together . We will , however , take tho subject into our own hands , and say half-a-dozen words upon it , more especially as some of our readers seem to have arrived at the conclusion that becauso wo did not agceo with tho jury that tried
Kirwan , and thought Mr . Dennis , tho foreman thereof , had , to uso lialph Osborne ' s phrase , " the pen of a ready but migramrnntical writer , " we had objections to tho institution altogether , and were inclined to think it might advantageously bo dispensed with . Wow , tho fact is , that what excites our indignation or ridicule in tho conduct of jurymoTi when they do wrong , is proeisoly tho consciousness that such absurdities as they aro committing aro calculated to bring discredit and disdain down upon what wo value as , and Mr . Dennis calls , a " sacred institution . " Wo know Mint no noonor have twelve men resigned themselves into
tho hands of a judge , or given a verdict according to prejudice and not , according to evidence , than they , if told that they are guilty of folly or knavery in ho doing , raise a shout that wo are damaging the character of trial by jury , and endangering a " sacred institution , " and wo cannot but perceive that unless thero is a proper exposure of thia practice , as often as may be required , the repeated offencen of individuals , always willing to confound themselves with , and cloak themselves under , the institution , will at last really damago its character , and so perhaps doprivo u « of what , next perhaps to the press , is the greatest and most ( irmly established safeguard of our liberties . An esteemed correspondent ' s words will admirably express our opinion . Mr . Isaac Ironside , of Sheffield , writes
thus ¦ " I know and regret that the institution has not tho pristine vigour , and efficiency about it which it formerly had but that does not ariso from tho institution itself . For ' years it has boon the fashion of contralizors to sneer at it and write it down . Judges too have liabituolly OTerstepped their jurisdiction , and have directed juries what to do . When men liuvo a propor sense of tho doop rouponnibilitios of a juryman , they will effectually put down thi » innovation , and declare what their opinion is without dictation or direction from uny one . "
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January 22 , 1853 , ] THE LEADER . 87
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Citation
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Leader (1850-1860), Jan. 22, 1853, page 87, in the Nineteenth-Century Serials Edition (2008; 2018) ncse.ac.uk/periodicals/l/issues/vm2-ncseproduct1970/page/15/
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