Page:Popular Science Monthly Volume 53.djvu/393

Rh the idea of assessing an income derived from multiple sources as a whole to one taxpayer, and in place divides an assessable income into schedules according to its source; and, in fact, has given to such a system the popular designation of "the stoppage at source plan." Thus at present the sources of income in Great Britain are classified as pertaining to one or more of five schedules—designated as A, B, C, D, and E. For example, the profits or income derived from agricultural industry are classified as under schedule A, and those from manufactures, mines, gas works, and water supplies under schedule D, and the like; and it is only in schedules A and D that the income receiver must make a return of agricultural, mercantile, or manufacturing gains or profits.A recent number of the London Times reports the following additional illustration of the ingenuity of the people of every country subject to an income tax to evade the payment of the same.

"There is an argument in favor of the separation of the incomes of married couples for the purpose of income tax which has not yet been advanced. It is the immoral state of the law as it stands at present. John and Mary, each possessing incomes of less than £500, but in the aggregate exceeding that sum, agree to live together as a certain 'advanced' couple did who made themselves notorious only a short time since. They are both entitled to relief under the act Should they, however, legalize their union, neither is entitled to any rebate, and they are actually taxed for rendering themselves respectable members of society. And this is in moral England."

In the earliest of Mr. Gladstone's budget speeches, that of 1853, he distinctly refused, while admitting that a great deal might be said in favor of taxing incomes at different rates, according as they proceed from property or from skill, to break up the income tax into classes, and to make a difference in the assessment according to the source from which the income was derived. Mr. Gladstone's argument, in this instance, applied to the difficulty of discriminating between the various degrees of the durability of incomes; but his definite refusal to "vary the rate of the tax according to the source of the income"—on the ground, to use his own words, that "I think that I should be guilty of a high political offense if I attempted it"—may suffice as a sufficient expression of his opinion in favor of a proportional system. In a recent number of the Nineteenth Century Mr. Gladstone referred to his budget of 1853, in which he continued his income tax, and to his proposal, in 1874, to carry on the national finance without its assistance. He refers to the preparations made, through successive reductions of the tax, for its ultimate abolition, and observes that "in 1874, for the first time since 1845, the opportunity arrived. The nation had its opportunity and took its choice. It may have been wise or unwise; but it was made by competent authority. The result is told in our present expenditure."

In general discussions on the income tax, especially those which have characterized the financial debates in the British Parliament, the proposition has been often advanced that it is a hardship that incomes arising from the exertions of a man's brain should be charged at as high a rate as those resulting from invested capital; and during the present Parliament (1896) a motion was made by a leading member that the financial committee of the House may have permission to amend the assessment in such cases. In a debate which followed (instituted by Sir John Lubbock) it was stated that "while there was an immense difference, no doubt, between the two classes of incomes. If extreme cases were considered, they nevertheless passed the one into the other by imperceptible gradations. Nor had any satisfactory treatment of investments ever been suggested. Let them take one class—the securities of foreign nations. Some were excellent, others,