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This of course, or anything approaching it, is unpractical. But I have suggested above, as a rough plan in accordance with the existing one, eight-pence a week on incomes of L1 a week, twelvepence a week on incomes of L2 a week, sixteen-pence a week on incomes of L3 a week and upwards.
The reply to this is, If this is your estimate of the understanding and morality of the masses, you should not have put the whole political power in their hands. In the Crimean War the nation endured an income tax of sixteen-pence in the pound; it is certain that the nation is richer now, and better able to bear such a rate. But this is not the strength of the argument.
Lastly, It has not been overlooked that there is an income tax now: and if the whole proceeds of the sixteen-pence income tax were used to fill up the deficiency in customs and excise, then we have to make up a deficiency equal to the present proceeds of the income tax.
I therefore reckon that, without remissions, the tax of sixteen-pence in the pound down to L156 a year would produce about L30,000,000, and that the tax down to L52 a year would about produce the rest. The total income that income tax is now levied on is nearly L600,000,000. We need not be surprised at the productiveness of the income tax. A man of L10,000 a year pays tax on that.
Instead therefore of proceeding upwards in our income tax sliding- scale we must proceed downwards. Taking sixteen-pence in the pound as the maximum rate we can impose on the big fish, the problem will be, What is the highest income to which you will allow any remission from the maximum rate?
Whether we believe tobacco to be injurious or not, we have no right to impose on an article so very largely consumed a duty which amounts to taxing the poor out of proportion to the rich. It may be urged against Universal Free Trade that the poor are so ignorant that they would sooner pay sixteen-pence a week in taxes indirectly than eightpence directly.
But the expectation is, that with Universal Free Trade, and the tremendous stimulus thereby given to commerce and manufacture, the National Income would rise with a bound, and that in two or three years a much lower rate than sixteen-pence income tax in the pound would supply the amount of all the indirect taxes abandoned.
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