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The Pamphlet Collection of Sir Robert Stout: Volume 14

Other Loopholes and Defects in the Income Tax

page 181

Other Loopholes and Defects in the Income Tax.

With reference to the table at foot of last page it is pointed out by that valuable work "Burdett's Official Intelligence," that the large decreases shown in the assessments, some of which are undoubtedly due to a bonâ fide diminution in the amount of Foreign Stocks held by residents of this country, are probably due in other cases to evasions of the tax. That authority further remarks that incomes (of over £3 a week) if received weekly, although clearly chargeable under Schedule D, are not attempted to be included by the revenue authorities, so that whilst a clerk at £200 a year is assessed, his fellow-employé at £4 a week or upwards is exempt.

Stocks are exempt if standing in the names of Her Majesty, or any foreign Ambassador here resident, also of Friendly, Industrial, or Provident Societies, Savings' Banks, Charities, and Trusts for the repair of places of worship.

Out of a population exceeding 36 millions, less than a quarter of a million persons now come under Schedule D, as will be seen by a previous table. The serious character of the exemptions below £150, and partial exemptions between that and £400 is evidenced by such a fact, as also by the further statement that only about 1 in 5 of the present payers would come under assessment if incomes below £400 were entirely (instead of partially) made exempt.

According to the Inland Revenue Commissioners some 240,000 persons were relieved by Sir S. North-cote in raising the level in 1876 from £100 to £150 of non-liability. It is fair to assume that in ten years their numbers have reached 300,000. Let us suppose only £100 of net assessment for each (=£30,000,000). Then there is an amount of Revenue thrown away that would have over sufficed to free Coffee, Cocoa, and Dried Fruits from taxation. The latter reform would have affected millions of taxpayers of all classes most favourably; but the Cabinet of 1876 were truthfully caricatured as fishing for the votes of the few.

Similarly a handful of individuals were benefited by the same government's grant of £40 additional abatement in certain cases: and the House Duty has all along been weighted with mischievous and sweeping exemptions (as elsewhere shown).

If instead of playing to the gallery with such grants of exemption, our rulers had possessed sufficient wisdom, courage, and honesty to maintain the old level of £100 Income Tax liability (with £80 abatement up to £300), or to apply the House Duty below £20 rental, they could nave far more really and generally reduced taxation by abolishing the customs duty on tea; as we believe it was Mr. Gladstone's original intention to do. Better trade and more constant employment (to say nothing of improved profits in commerce) would have resulted, and the exchequer would have richly shared this general improvement. But whilst free trade is hated by one of the great parties in the State, and only half understood or believed in by many leaders of the other, everybody loses, and the majority thus far appear content to lose, unnumbered benefits.