Absence of Science in Taxation.

"Few things are of more importance to civilised society than a sound system of taxation, and it seems strange that nations should rise, flourish, and decline without arriving at a perfect mode of collecting national revenue. -"Civilisation, Taxation, and Representation.”—By G. Holloway. London, 1867.

"It would be hard to find in the whole region of Political Economy a subject more generally misunderstood and perverted by false views, and more degraded by a partial study, than taxation. "Die lehre von den Steuern."-Hoffmann. Berlin.

A Free Nation should know what it pays in Taxes.

"Such a Government starts from the principle that the people is the source of power, and is competent to govern itself. It ought not then to act on the opposite principle that the people ought not to know what they pay, or how it ought to pay. The people is the person from whom, specially nothing should be hid of that kind. It ought to know it should contribute

10 source, or on its passage to the pocket, and

thus save the taxpayer unpleasant annoyance, the tax-collector, trouble. "Let the payment of taxes appear to be in a certain sense voluntary, or dependent on some contingency.

"And generally ('Wise as serpents harmless as doves.'),

"Collect the taxes at any source from which they can be most readily obtained."

*"Montesquieu has a chapter on Taxes, headed 'Comment on conserve l'Illusion' -Machiavelli alone could do the subject justice.'

British Local Taxation and Government.

Remarks by the Right Hon. G. J. Goschen, April, 1871, on introducing Bill

thereon.

"The truth is that we have a chaos as regards authorities, a chaos as regards rates, and a worse chaos than all as regards areas. And not only that, but every different form of collection which it is possible to conceive is applied to the various local authorities administering these various rates in these various areas."

THE BRITISH TAXPAYER

AND HIS WRONGS.

equity in taxation.

IN dealing with this subject it will be noticed that I have Importance of attached considerable importance to the matter of equity, or as it is more often termed equality, in taxation.

For it appears obvious that a system of taxation unjust in its main principles cannot possibly be a politic one in the long run, or remain a permanent institution in a free community much advanced in civilisation.

However long the delay in fully realising its injustice, it may be certainly predicted that the time will come when its impolicy as well as its injustice will be made evident to those suffering under its effects.

So paramount an element indeed is equity in the science of taxation, that it seems to dwarf all other considerations, and, indeed, to absorb them.

This can be better understood by attentively examining Adam Smith's "four axioms of taxation," which will be found resolvable into one inclusive principle, "Justice in taxation," to which so much importance is attached by certain British, American, and French economists, and particularly by M. Esquirou De Parieu, perhaps the most distinguished of the many French writers on the subject.

Probably many who have studied this question have remarked what small progress since the days of Adam Smith has been made in developing the science of taxation, in comparison with the advance made in other branches of Political Economy and Sociology.

How few steps forward can be recorded beyond the "four axioms" just noticed!

Nor in the art of taxation can there be observed much improvement if we take a wider outlook, and consider whether

B

Slow development of

science of

taxation.

Evidences of the want of fixed principles in taxation.

there is any general concurrence in the practice of governing bodies. As far as can be judged, direct and indirect taxation seem still in the balance as regards their relative merits and disadvantages.

So far as the practice of State Governments may aid us in forming an opinion, an admixture of both systems would perhaps appear the proper method for adoption.

But it may be argued with some force and fairness, that the practicability of the occasion is the real factor which decides their action in these matters, not conviction from the demonstrations of science, or the indications of theory.

Professor Amasa Walker, in his introductory chapter on "The Science of Wealth," remarks that human legislation is the greatest disturber of the laws of Political Economy, and that it obscures the science. It would certainly seem to have so acted in respect of taxation.

Whatever the cause, the unsatisfactory character of the systems of taxation pursued in various States, with either despotic or free constitutions, may be gauged from the wars and revolutions, the riots and seditions, the overthrowals of ministries and rulers, the frauds and evasions and attendant prosecutions and punishments, which occur with unfailing regularity in the several States, besides all the international disputes and bickerings, the manifest outcome of their tax-laws and tariffs, just as if there were no science whatever on the subject, and history and experience counted for nothing in supplying warnings and guidance for legislation on taxation.*

Constantly do we hear or read of discussions in legislative bodies and amateur parliaments upon the principles of taxation, of disquisitions on the subject in magazines, newspapers, and pamphlets, &c.; and the volume of these discussions and writings shows no sign of shrinkage, making it obvious to ordinary minds that the subject has not yet been thoroughly threshed out. The wide divergence in the views of economic writers, British and foreign, on taxation points to the same conclusion.

* The wasteful expenditure of Governments is no doubt answerable for some of these results, and their application of public moneys to improper objects for others; but, as will be seen, my remarks are directed mainly to the ill-considered methods by which our taxation is raised.