Note 6 — POLITICAL ECONOMY, BY J. S. MILL.[4]

The discussions upon the income tax reveal a lamentable state of public feeling on this subject. That this tax might have been more equitably adjusted, every one but a Chancellor of the Exchequer will admit. Those who have to insure their lives, or otherwise save a fund out of their income for survivors, ought not to pay the same tax as those who can enjoy the whole of their income. But no such modification as this would have pacified discontent. One often heard it said that the tax should fall exclusively on realised property. The prosperous tradesman, with his income of some thousands a-year, was to pay nothing; the poor widow, who draws her sixty pounds per annum from her property in the funds, she was to pay the tax. Mr Mill, in noticing this very equitable proposition, says—"Except the proposal of applying a sponge to the national debt, no such palpable violation of common honesty has found sufficient support in this country during the present generation to be regarded within the domain of discussion. It has not the palliation of a graduated property-tax, that of laying the burthen on those best able to bear it; for 'realised property' includes almost every provision made for those who are unable to work, and consists, in great part, of extremely small fractions. I can hardly conceive a more shameless pretension than that the major part of the property of the country, that of merchants, manufacturers, farmers, and shopkeepers, should be exempted from its share of taxation; that these classes should only begin to pay their proportion after retiring from business, and if they never retire, should be excused from it altogether."—(Vol. ii. p. 355.)