Between £160 and £400 £160
" 400 " 500 150
" 500 " 600 120
" 600 " 700 70
The following table shows how the abatements graduate the Income Tax
when the nominal rate of tax is 1s. in the £.
INCOME TAX. EFFECT OF THE ABATEMENTS ON INCOME TAX AT 1s.
Actual Rate of
Abatement Income after Taxation when
Income. Allowed. Abatement. the Tax is
1s. in the £.
£ £ £ Pence in the £
180 160 20 1.33
240 160 80 4.00
300 160 140 5.60
400 160 240 7.20
440 150 290 7.90
500 150 350 8.40
540 120 420 9.33
600 120 480 9.60
640 70 570 10.68
700 70 630 10.80
740 nil 740 12.00
Thus, when the Income Tax is at 1s., an income of £180 pays less than
1½d. in the £, an income of £300 pays less than 6d. an income of £500
pays less than 8½d., and an income of £700 pays less than 11d.
I now give an explanation of the various Schedules under which the tax
is collected. The abatements, it should be understood, refer to all the
Schedules.
* * * * *
Schedule A, sometimes called Property Tax or Landlords' Tax, is assessed
upon the rents received by the owners of lands, houses, etc. It is
directly assessed upon occupiers, who, if they are tenants, deduct the
tax from their next payment of rent. Thus it is a Land and House Tax
which the landowner or houseowner cannot possibly escape.
It should also be explained that the term "Lands," as used in connexion
with Schedule A, refers to Agricultural lands, and the farm-houses and
farm buildings, etc., thereon. The term "Houses" refers to houses,
business premises, etc., together with the gardens, pleasure grounds or
yards upon which they stand.
Owners of agricultural lands are allowed to deduct for repairs
one-eighth of the rent. Owners of houses and other buildings are allowed
to deduct for repairs one-sixth of the rent.
* * * * *
Schedule B covers profits from the _occupation_ of lands, and taxes the
incomes of farmers, nurserymen, and market gardeners.
Farmers' profits (unless farmers elect to be dealt with under
Schedule D) are assumed to be one-third of the annual rent of their
farms. Thus a farmer paying a rent of £480 or less is not subject to
income tax, as one-third of £480 is £160, and incomes of £160 or less
are not taxable. Nurserymen and market gardeners, however, are taxed on
their profits in the same way as in the case of other business men.
The chief point to which I direct attention is that very few farmers pay
income tax at all.
The arbitrary assessment of farmers at one-third the rent of their farms
is an absurdity. A farmer paying a rental of £480 is usually a
well-to-do man, but he escapes income tax because his income is assessed
as £160. A farmer who pays a rental of £600 and who in an average year
probably makes at least £400 a year, is, on the one-third basis,
assessed at £200. The income tax of farmers is for the most part paid
for them by the industrial classes, who are taxed _pro tanto_ to relieve
agriculture.
* * * * *
Schedule C deals with profits from British, Indian, Colonial and Foreign
Government Securities. So far as possible these profits are taxed "at
the source." Thus the Bank of England, in paying Consols dividend,
deducts income tax, and leaves the fundholder to claim repayment
afterwards if his income should be less than £160 per annum.
* * * * *
We now come to that important branch of the tax known as Schedule D.
The profits included in this Schedule consist of those from trade and
industry, from professions, from all employments or vocations except
public offices, from oversea investments which are not Government
securities, and from interest on loans secured on the Public Rates, etc.
In the case of income from trade, assessments are made upon the average
profits of the past three years. Let us suppose that a merchant in the
period, 1893-1902, made the following profits: 1893, £1,100; 1894, £900;
1895, £1,200; 1896, £1,300; 1897, £1,400; 1898, £1,400; 1899, £1,500;
1900, £1,600; 1901, £1,200; 1902, £1,200; 1903, £1,500; 1904, £1,600.
The table on page 301 shows how the profits are assessed under Schedule D.
Thus, while between 1893 and 1904, the income was in two years above
£1,500, the assessment never rose above £1,500. The result, it will be
seen, is to deprive the State of the advantage of the maximum income.
It follows that the assessments under Schedule D, from this cause alone,
are always something less than the actual income of the persons assessed.
* * * * *
ILLUSTRATION OF THE PRINCIPLE OF AVERAGING UNDER Schedule D
-----------------+------------------------------------------------
Profits. | Assessment.
-------+---------+-------------+-------------+--------------------
| | Year of | Amount of |
Year. | Amount. | Assessment. | Assessment. | Remarks.
-------+---------+-------------+-------------+--------------------
| £ | | £ |
1893 | 1,100 | | |
1894 | 900 | | |
1895 | 1,200 | | |
1896 | 1,300 | 1896 | 1,066 | Average of £1,100,
| | | | £900 and £1,200.
| | | |
1897 | 1,400 | 1897 | 1,133 | Average of £900,
| | | | £1,200 and £1,300.
| | | |
1898 | 1,400 | 1898 | 1,300 | Average of £1,200,
| | | | £1,300 and £1,400.
| | | |
1899 | 1,500 | 1899 | 1,366 | Average of £1,300,
| | | | £1,400 and £1,500.
| | | |
1900 | 1,600 | 1900 | 1,433 | Average of £1,400,
| | | | £1,400 and £1,500.
| | | |
1901 | 1,200 | 1901 | 1,500 | Average of £1,400,
| | | | £1,500 and £1,600.
| | | |
1902 | 1,200 | 1902 | 1,433 | Average of £1,500,
| | | | £1,600, and £1,200.
| | | |
1903 | 1,500 | 1903 | 1,333 | Average of £1,600,
| | | | £1,200 and £1,200.
| | | |
1904 | 1,600 | 1904 | 1,300 | Average of £1,200,
| | | | £1,200 and £1,500.
| | | |
| | 1905 | 1,433 | Average of £1,200,
| | | | £1,500 and £1,600.
We next come to Schedule E, which covers the salaries of all Government
officials, and of the employees of Limited Liability Companies, County
Councils, etc. For obvious reasons this branch of the tax is very easily
assessed.
* * * * *
It is necessary also to remind the reader that a second form of
income-tax is at present levied. I refer to the Inhabited House Duty,
which is payable by all householders (in Great Britain only—not in
Ireland) who live in houses of an annual value of £20 and upwards. The
rates are graduated as follows:—
Above £20. Above £40. Above £60.
Rate in the £. Rate in the £. Rate in the £.
Private dwelling-houses 3d. 6d. 9d.
Business premises used
residentially 2d. 4d. 6d.
Houses used solely for purposes of trade, and in which no occupier
resides, are not subject to the tax.
In the last financial year of which we have record (1907-8) the duty
yielded £1,900,000.
The present Inhabited House Duty dates from 1851 when it was levied, to
replace the stupid window-duty, by Sir Charles Wood. It can only be
described as a clumsy income tax, and it bears very harshly upon poor
Londoners, compelled by their circumstances to pay heavy rents to be
near their work. To the heavy rent the State adds a second most unjust
Income Tax.
* * * * *
In the above words the Income Taxes of 1905 were faithfully described in
their essential details. In the years that have elapsed various reforms
have been made.
In the Finance Act of 1907 the principle of _differentiation as between
earned and unearned incomes_ was introduced. Mr Asquith embodied the
principle in the following words (Finance Act, 1907, clause 19, section
1):
"Any individual who claims and proves, in manner provided by this
section, that his total income from all sources does not exceed two
thousand pounds, and that any part of that income is earned income,
shall be entitled, subject to the provisions of this section, to such
relief from income tax as will reduce the amount payable on the earned
income to the amount which would be payable if the tax were charged on
that income at the rate of ninepence."
As the nominal rate of tax was 1s., earned incomes thus enjoyed a
substantial reduction. The abatement system, described on page 297,
continued to apply to both earned and unearned incomes, so that two very
roughly graduated scales of taxation came into existence, which are
illustrated on page 304.
The number of tax-payers who understood what had been done for them may
be described as negligible. Without working out such a table as that on
p. 304, the income tax payer remained in ignorance of what treatment had
been meted out to him. The moral effect of a considerable reform was
almost completely lost.
In the famous Finance Act of 1909, which did not pass into law, owing to
the action of the House of Lords, until the present year (1910), Mr
Lloyd George, succeeding Mr Asquith as Chancellor of the Exchequer, made
alterations in the Income Tax as excellent in principle and as obscure
in operation as that just described.
He raised the nominal rate of taxation to fourteen pence
in the £, and left the rate for earned incomes at ninepence,
thus increasing the differentiation between earned and
unearned incomes. He also introduced a new step in
differentiation by enacting that earned incomes exceeding
£2,000 a year but not exceeding £3,000 a year should
pay twelve pence instead of fourteen pence in the £.
THE EFFECT OF MR ASQUITH'S DIFFERENTIATION OF THE INCOME TAX, 1907
-------+---------+-----------------------------------
| | Income Tax on Earned Incomes.
Income.|Abatement|-------------+----------+----------
| allowed.| Tax payable.| Nominal | Virtual
| | | Tax. | Tax.
-------+---------+-------------+----------+----------
£ | £ | £ _s._ _d._|Pence in £|Pence in £
160 | 160 | ... | Exempt | ...
200 | 160 | 1 10 0 | 9 | 1.8
300 | 160 | 5 5 0 | 9 | 4.2
400 | 160 | 9 0 0 | 9 | 5.4
500 | 150 | 13 2 6 | 9 | 6.3
700 | 70 | 23 12 6 | 9 | 8.1
800 | Nil | 30 0 0 | 9 | 9.0
1,000 | " | 37 10 0 | 9 | 9.0
2,000 | " | 75 0 0 | 9 | 9.0
-------+---------+-------------+----------+----------
-------+---------+-----------------------------------
| | Income Tax on Unearned Incomes.
Income.|Abatement+-------------+----------+----------
| allowed.| Tax payable.| Nominal | Virtual
| | | Tax. | Tax.
-------+---------+-------------+----------+----------
£ | £ | £ _s._ _d._|Pence in £|Pence in £
160 | 160 | ... | Exempt | ...
200 | 160 | 2 0 0 | 12 | 2.4
300 | 160 | 7 0 0 | 12 | 5.6
400 | 160 | 12 0 0 | 12 | 7.2
500 | 150 | 17 10 0 | 12 | 8.4
700 | 70 | 31 10 0 | 12 | 10.8
800 | Nil | 40 0 0 | 12 | 12.0
1,000 | " | 50 0 0 | 12 | 12.0
2,000 | " |100 0 0 | 12 | 12.0
-------+---------+-------------+----------+----------
In order to give further effect to the principle of graduating the
Income Tax, Mr Lloyd George at the same time imposed a Supplementary
Income Tax, or Super-Tax, upon persons whose incomes exceeded £5,000 a
year.
The Super-Tax is nominally 6d. in the £, but in practice it is always
less. For the Super-Tax of 6d. is payable only upon that part of the
income which exceeds £3,000 a year. That, reflection will show, creates
a _graduated_ Super-Tax, thus:
THE LLOYD GEORGE SUPER-TAX AS IT REALLY IS
---------+-----------+--------+-----------------+------------+------------
| Abatement | Income | | Nominal | Virtual
Income. | on | really | Tax payable. | Rate of | Rate of
| Income. | Taxed. | | Super-Tax. | Super-Tax.
---------+-----------+--------+-----------------+------------+------------
£ | £ | £ | £ _s._ _d._ | Pence in £ | Pence in £
5,000 | Exempt | ... | ... | ... | ...
5,001 | 3,000 | 2,001 | 50 0 6 | 6 | 2.4
10,000 | 3,000 | 7,000 | 175 0 0 | 6 | 4.2
50,000 | 3,000 | 47,000 | 1,175 0 0 | 6 | 5.6
100,000 | 3,000 | 97,000 | 2,425 0 0 | 6 | 5.8
---------+-----------+--------+-----------------+------------+------------
It will be seen that it is a great gain under this system to have £5,000
a year rather than £5,001. The extra £1 of income costs the tax-payer
£50, 0s. 6d. Thus a premium is placed by the State upon false
declarations, for if a Government is so unfair as to tax £1 of income
£50, 0s. 6d, who can blame a tax-payer who retorts in kind?
It will be seen that it is impossible for the alleged 6d. Super-Tax to
reach 6d. It can at the highest reach 5.9 pence.
But while the Super-Tax is so unfortunate in method it is excellent in
principle, and largely carries into effect the suggestions made in
"Riches and Poverty," edition 1905. It effects a rough graduation in the
taxation of incomes over £5,000 a year, and extends the gamut of the
Income Tax scale from zero at £160 a year to 19.8 pence in the £ at
£100,000 a year.
I am now able to show the total effect of all the obscure provisions
which it has been my misfortune to attempt to describe in plain
language. The table on page 307 gives a faithful picture of the Income
Tax, as graduated and differentiated by all the reforms made down to
1910. The table is the expression of the following provisions, existing
in 1910, which I recapitulate for its better elucidation.
_Incomes not exceeding £160 a year pay no tax. Small and moderate
incomes are relieved from taxation by being only taxed in part, i.e.
"abatements" are allowed according to the size of the income. Over £700
a year there are no abatements. Unearned incomes are taxed at the
nominal rate of fourteen pence in the pound. Earned incomes not
exceeding £2,000 a year are taxed ninepence in the pound. Earned incomes
over £2,000 a year, but not over £3,000 a year, are taxed one shilling
in the pound. Finally comes what is called the "Super-Tax." Incomes,
whether earned or unearned, over £5,000 a year are taxed an extra
sixpence in the pound on such part of the income as exceeds £3,000._
EFFECT OF THE INCOME TAX IN 1910
-------+---------+--------------------------------------
| | Earned Incomes.
Income.|Abatement+----------------+----------+----------
|allowed. | Tax payable. | Nominal | Virtual
| | | Rate. | Rate.
-------+---------+----------------+----------+----------
£ | £ | £ _s._ _d._ |Pence in £|Pence in £
160| 160 | | Exempt |
200| 160 | 1 10 0 | 9 | 1.8
300| 160 | 5 5 0 | 9 | 4.2
400| 160 | 9 0 0 | 9 | 5.4
500| 150 | 13 2 6 | 9 | 6.3
700| 70 | 23 12 6 | 9 | 8.1
800| Nil | 30 0 0 | 9 | 9.0
1,000| " | 37 10 0 | 9 | 9.0
2,000| " | 75 0 0 | 9 | 9.0
2,100| " | 105 0 0 | 12 | 12.0
3,000| " | 150 0 0 | 12 | 12.0
3,100| " | 180 16 8 | 14 | 14.0
5,000| " | 291 13 4 | 14 | 14.0
5,100| " | 350 0 0 | 14 + 6 | 16.5
10,000| " | 758 6 8 | 14 + 6 | 18.2
50,000| " |4,091 13 4 | 14 + 6 | 19.6
100,000| " |8,258 6 8 | 14 + 6 | 19.8
-------+---------+----------------+----------+----------
-------+---------+--------------------------------------
| | Unearned Incomes.
Income.|Abatement+----------------+----------+----------
|allowed. | Tax payable. | Nominal | Virtual
| | | Rate. | Rate.
-------+---------+----------------+----------+----------
£ | £ | £ _s._ _d._ |Pence in £|Pence in £
160| 160 | | Exempt |
200| 160 | 2 6 8 | 14 | 2.8
300| 160 | 8 3 4 | 14 | 6.5
400| 160 | 14 0 0 | 14 | 8.4
500| 150 | 19 8 4 | 14 | 9.8
700| 70 | 36 15 0 | 14 | 12.6
800| Nil | 46 13 4 | 14 | 14.0
1,000| " | 58 6 8 | 14 | 14.0
2,000| " | 116 13 4 | 14 | 14.0
2,100| " | 122 10 0 | 14 | 14.0
3,000| " | 175 0 0 | 14 | 14.0
3,100| " | 180 16 8 | 14 | 14.0
5,000| " | 291 13 4 | 14 | 14.0
5,100| " | 350 0 0 | 14 + 6 | 16.5
10,000| " | 758 6 8 | 14 + 6 | 18.2
50,000| " |4,091 13 4 | 14 + 6 | 19.6
100,000| " |8,258 6 8 | 14 + 6 | 19.8
-------+---------+----------------+----------+----------
The table on p. 307 shows, as the mere relation of the complicated
provisions does not show, both the virtues and the faults of Mr Lloyd
George's Income Tax. There is graduation, but it is effected so clumsily
that it positively bristles with anomalies. Consider, for example, the
gross anomaly of making a man with £3,000 a year pay only £150, while a
man with £3,100 a year must pay £180. Or, again, of asking from the
£5,000 man a £291 tax, and demanding £350 from the £5,100 man. Perhaps
the worst feature in the scale, however, is the fact that unearned
incomes from £701 to £5,000 pay the same rate.
* * * * *
Now let us consider the reform of the Income Tax.
In the first place it is suggested that the Inhabited House Duty should
be entirely abolished. As has been already pointed out, it is a clumsy
second Income Tax and its incidence is most unequal. It is not paid in
Ireland, and too much of it falls upon poor clerks and tradesmen in
London and other big towns. It is urged here that if we properly reform
the Income Tax it should not be necessary to levy a second one under
another name.
It must be frankly recognized that, in principle, the Income Tax reforms
urged in "Riches and Poverty," edition 1905, have been largely conceded.
Method is so important in this connexion, however, that it is necessary
to insist that the Income Tax still needs serious revision.
Why is it that so much misplaced ingenuity has been applied to our
Income Tax law by successive Chancellors of the Exchequer? Why these
alleged rates of Income Tax, which on inquiry prove to be nominal, and
the enactment of a clumsy Super-Tax to amend a sufficiently clumsy
Income Tax? Why should it be necessary to arrive at a "sort of"
graduation by a series of provisions, which few men, inside or outside
the legislature, pretend to understand?
The explanation is that we have not a complete Census of Incomes. The
point is of the first importance. The establishment, within the limits
of a very small possible margin of error, of the number of British
Income Tax payers in 1903, which I effected by a careful examination of
so far uncorrelated facts in "Riches and Poverty," edition 1905, brought
to light the then unsuspected fact that about 750,000 out of about
1,000,000 Income Tax payers actually declared their individual aggregate
incomes from all sources for the purposes of Income Tax.
These declarations, as already explained, were made by the smaller
Income Tax payers in order to avail themselves of the abatement system,
the abatements being granted only to those persons with incomes not
exceeding £700 a year _who made declarations_. _In effect, those of this
class who do not declare are heavily fined._
The number of the declarants was further increased in 1907 by Mr
Asquith's differentiation of the Income Tax.
Mr Asquith enacted, as we have seen, that persons who earned their
incomes, and whose incomes did not exceed £2,000 a year, should enjoy a
lower rate of taxation _if they declared their incomes_.
This led to declarations by a fresh batch of Income Tax payers, and it
became possible for Somerset House to collect and publish a new set of
most valuable statistics. Unfortunately, the precise facts of the case
have neither been collected nor published, important as the knowledge of
them is if we are to tax wisely and justly. Nevertheless, there is
little doubt that the new batch of declarations between £700 and £2,000
a year raised, or will soon raise, the proportion of Income Tax payers
making personal declarations to over nine out of eleven of the whole
body.
The question immediately suggests itself: Why should not the balance of
two out of eleven, or thereabouts, be compelled to fall into line with
the majority? This balance consists, of course, of the well-to-do and
rich, chiefly those who derive their incomes from property. These
persons are not taxed directly at all. The State relies upon what is
called "taxing at the source." That is, dividends are taxed at the
company's offices before they are distributed, and rents are taxed
through the occupier, the occupiers being left to recover the Schedule A
tax from the landlords and houselords.
This reliance upon an indirect form of "direct" taxation leads, of
course, to much income escaping tax, for rich people, it will be seen,
have not to make a return of their incomes, but are in the happy
position of letting the State catch them when it can. No other country
levying an Income Tax does this thing; yet we perversely maintain that
there is no system so effective as ours. Happily, the Finance Act of
1909 (passed in 1910) still further increases the number of those who
are to declare.
First, as to earned incomes, as noted above, Mr Lloyd George enacted
that earned incomes over £2,000 but not over £3,000 are to continue to
pay one shilling in the £, and that those over £3,000 are to pay
fourteen pence. It follows that a new batch of declarations will be
forthcoming from those, or most of those, between £2,000 and £3,000, in
order to get the shilling rate.
Again, a Super-Tax is to be levied upon all those whose incomes exceed
£5,000 a year, of whom there are not less than 14,000 or 15,000. This
Super-Tax is to be collected by Special Commissioners. How will these
Special Commissioners know to whom to apply? Obviously they have not a
list of the fortunate 15,000. They will doubtless go to work by sending
a form asking for a return of total income to all people who _appear_ to
be very rich.
All the inhabitants of big houses, and, indeed, all the obviously rich,
will receive a declaration form to fill up. And, of course, in order to
catch the 15,000 the Commissioners will have to send notices to many
times that number of people, for it is really exceedingly difficult to
decide by appearance or reputation whether a man has £2,500 or £5,000 a
year. The Budget provides that every person sent a form must fill it up,
whether or not he has £5,000 a year. Consequently, at the very top of
the scale, the Income Tax Commissioners will come into possession of
personal declarations relating to 50,000 or more of our moneyed
citizens.
And yet we shall not arrive at complete declarations from all Income Tax
payers. Nearly all persons who earn their incomes will declare, but as
to unearned incomes there is a big hiatus.
Small unearned incomes up to £700 a year will be mostly declared in
order to get the abatements.
Very big unearned incomes must be declared, as we have seen, through the
demands for Super-Tax.
_But, between £700 a year and £5,000 a year, the unearned scale is
ungraduated, and, save for the people with less than £5,000 a year,
asked in error to declare by the Super-Tax Commissioners, there will be
no personal declarations._
Surely this ought not to be. If the poor are to declare and the very
rich are to declare, why should not the middle incomes be declared? Why
should the State continue to rely, in respect of the considerable amount
of income concerned, upon taxation at the source? The question becomes
the more urgent when we reflect that the fresh batch of declarations
brought in by Mr Asquith's differentiation scheme of 1907, noted above,
brought to light many millions of "new" income (see p. 14). Every new
revelation of existing income, of course, lowers taxation _pro tanto_.
Perhaps the final argument for universal personal declaration of income
is furnished by the following enactment of the Budget of 1907:
Finance Act (1907), Section 21.
"Every employer, when required to do so by notice from an assessor,
shall, within the time limited by the notice, prepare and deliver to the
assessor a return of the names and places of residence of any persons
employed by him."
We thus go behind the backs of small tax-payers to their employers, and
compel the divulgence of incomes which are usually the _total_ incomes
of the employed. Yet the employer who, by our direction, hands his
employee over to the tax-collector, is not compelled by us to declare
his own total income, unless (1) he has no other income than his
Schedule D income, or (2) he is a payer of Super-Tax.
Given a Census of Incomes it would become possible to arrive at a
practical and just Income Tax.
We could set up a plain graduated scale of taxation, differentiated up
to a certain point as between earned and unearned incomes, making it
quite clear to the tax-payer what is demanded from him and revealing to
him the justice or injustice of our methods by enabling him to compare
his rate of taxation with that of those richer or poorer than himself.
We need not abandon taxation "at the source." We could levy on property
incomes at the source a certain rate of tax, say 1s. in the £. Then when
the total income was declared, the tax-payer would point out upon what
items, if any, 1s. in the £ had been deducted at the source and pay the
balance of the tax.
Let us take a hypothetical case—that of a barrister earning £2,000 a
year, and deriving a further £1,000 from rents and a further £300 from
Consols. The total income, £3,300, let us suppose taxed under the
graduation scheme at 14d. in the £. The Income Tax on the £1,000 of
rents would be paid by his tenants and deducted from the rents paid him,
while the Bank of England would deduct 1s. in the £ from the interest on
the Consols. Declaring his total income at £3,300 he would pay the
balance due, thus:—
Total Declared Income. £ _s._ _d._
£3,300 at 14d. 192 10 0
Taxed at the source:—
(1) Schedule A. 1s. in the £ on
£1,000 of rent, deducted by
tenants £50
(2) Schedule C. 1s. in the £ on
£300 of interest deducted
by Bank of England £15
--- 65 0 0
------------
Balance of Tax Payable-- £127 10 0
============
If, upon the introduction of such a system, local assessors were
empowered to ask every householder assessed for local rates at £20 a
year and upwards _to declare his income in the place where he resides_,
there would undoubtedly be a great increase in the Income Tax
assessments. A great part of the evasion of Income Tax results from
persons being taxed at their places of business, where there is often
little evidence of means. In a man's own neighbourhood it is difficult
grossly to understate income.
For several years I put down in the House of Commons the following
suggested amendment to the Finance Bill:
Every person upon whom notice is served in manner prescribed by section
forty-eight of The Income Tax Act, 1842 (which section relates to the
delivery of notices by assessors), requiring him to make a return of his
income chargeable to duty under any and every schedule of the Income
Tax, shall make a return, in the form required by the notice, which
shall show the amount of his aggregate income from all sources, whether
he is or is not chargeable with duty, and upon what part or parts of
such aggregate income, if any, Income Tax has already been paid under
the Income Tax Acts by deduction at the source, and in default shall be
liable to a penalty under section fifty-five of The Income Tax Act,
1842.
On one occasion some twenty Members of Parliament consented to put down
this amendment with me, but every attempt to obtain its enactment has
failed. Until it is obtained there can be no just graduation of the
Income Tax, and tax-payers who declare their incomes under the existing
law will continue to pay too much because others pay too little.
* * * * *
Some smaller matters claim our attention.
A minor but not unimportant reform, for which we have to thank Mr Lloyd
George, is the concession made to small Income Tax payers who have young
children, a concession which the present writer believes he was the
first to urge in the House of Commons. The Finance Bill of 1909 (Sect.
68) provided that Income Tax payers with incomes not exceeding £500
should be entitled to exemption from taxation to the amount of £10 for
each child under the age of 16 years. The effect of this provision is
far-reaching. A clerk with £200 a year and three young children gets the
£160 abatement and £30 abatement in respect of his children. His
_taxable_ income is thus reduced to £10 and his payment of Income Tax to
7s. 6d.
On the same ground, respect for the principle of ability to pay, the
Income Tax law should provide for special abatements in case of the
illness of salary earners, special misfortunes, the support of poor
relatives, etc. It is found possible to work such provisions in Prussia;
it ought to be found possible to do so here.
* * * * *
The importance of a thorough revision of the Income Tax law is growing.
The view urged here is that the citizen's subscription to the National
Club should not only be justly proportioned to his means, but presented
to him intelligibly, and collected without waste or undue interference
with business.
The phenomenon of an annual Budget debate has come to be regarded as a
necessary Parliamentary evil, but is there any justification for it?
When the nation has decided, through its representatives, for good
reasons or for bad reasons, that a certain sum of money must be raised
for public purposes, it is not the function of the Chancellor of the
Exchequer _qua_ Chancellor of the Exchequer to decide whether the
purposes are good or bad, or whether the sum is too large or too small.
As a member of the Government, the Finance Minister has, of course, a
voice in deciding what sums should be spent and upon what purposes, but,
as Chancellor of the Exchequer, his duty is not to reason why but to
find the money. In the finding of the money, ought there to be, year by
year, a long and painful discussion as to how it should be done?
We have also become accustomed to regarding the Budget as a great and
glorious secret, to be carefully guarded until the Chancellor of the
Exchequer makes his annual speech. Does the tradition of secrecy rest
upon necessity? For my part, I call the necessity in question. I affirm
that our annual Budget need present no difficulties; that it is not
inherently a difficult thing to accomplish; and that the conception of a
Budget as a great secret, to be carefully hidden until Budget Day, is an
altogether childish conception. There is some excuse for reserving a
child's Christmas presents until he wakes up and finds the gifts of
Santa Claus in his stocking on the morning of December 25th, but there
is no excuse whatever for the ridiculous secrecy with which tradition
shrouds the annual Budget statement.
I do not deny that secrecy has been necessary in connexion with such
Budgets as have been put on record in the past. Of what have these
Budgets consisted? Year by year, a number of clumsy, inefficient and
indefensible taxes have been tinkered by successive guardians of the
national purse. Tea taxes, coffee taxes, beer taxes, sugar taxes,
alleged income taxes, double inheritance duties, have had bits carved
off them, or bits attached to them, without rhyme or reason. Year after
year, Mincing Lane has been in throes of excitement as to whether there
was to be a penny on tea, or a penny off tea. Cunning gentlemen have
rushed in tea to evade a suspected inclination to tax that article
further, or sugar brokers have been excited at the prospect of making
something, or losing something, over a little less or a little more on
sugar. We are a grave and respectful people, or assuredly we should
laugh at this annual exhibition of mingled greed and incompetency. If as
much intelligence were put into the making of boots, none of us would be
able to walk.
The subject is made additionally interesting by the fact that all along
men have known perfectly well how taxes ought to be levied. It is 130
years since Adam Smith wrote his first maxim of taxation, which I have
already quoted:
"The subjects of every State ought to contribute towards the support of
the government as nearly as possible in proportion to their respective
abilities; that is, in proportion to the revenue which they
respectively enjoy under the protection of the State."
As long ago as 1848 John Stuart Mill wrote ("Principles of Political
Economy," Book V. Chapter 2):
"As, in a case of voluntary subscription for a purpose in which all are
interested, all are thought to have done their part fairly when each has
contributed according to his means, that is, has made an equal sacrifice
for the common object; in like manner should this be the principle of
compulsory contributions: and it is superfluous to look for a more
ingenious or recondite ground to rest the principle upon.... To take a
thousand a year from the possessor of ten thousand would not deprive him
of anything really conducive either to the support or to the comfort of
existence: and if such _would_ be the effect of taking five pounds from
one whose income is fifty, the sacrifice required from the last is not
only greater than, but entirely incommensurable with, that imposed upon
the first. The mode of adjusting these inequalities of pressure, which
seems to be the most equitable, is that recommended by Bentham, of
leaving a certain minimum of income, sufficient to provide the
necessaries of life, untaxed.... The exemption in favour of the smaller
incomes should not, I think, be stretched further than to the amount of
income needful for life, health, and immunity from bodily pain."
In passing, this quotation may be commended to those who regard the
exemption of very small incomes from taxation as a tenet of modern
Socialism. Here we have it propounded in 1848 by John Stuart Mill, who
got it from Jeremy Bentham.
It is in spite of such admired utterances as these that we have still,
in the year 1910, such outrages upon common sense as taxes upon sugar,
taxes upon petrol, taxes upon cocoa, taxes upon business contracts,
taxes upon marriage certificates, and a great party in the State is at
this hour ardently desirous of adding to the number of such stupidities
by thousands or even tens of thousands.
When we inquire for the reason for the existence of such unbusinesslike
and costly stupidities, we find a simple explanation. It has been held
in the past universally, and is held in the present by many, that the
Government has no business to inquire into the incomes of the people it
governs. Lacking knowledge of incomes, it has been obviously impossible
for Governments to tax people according to their ability to bear
taxation. Consequently, Chancellors of the Exchequer have had to devise
all sorts of trumpery and costly expedients to get by indirect means
what should have been got honestly and directly.
In short, the first condition of fair budgeting is a Census of Incomes.
Given that, we are able to throw away all the lumber of indirect
taxation and of inefficient taxation. And it should be observed that
fair budgeting means simple budgeting—budgeting admitting of no annual
argument. The annual budget wrangle is the effect of our devious methods
of taxation.
Given universal declarations of income, and an end could speedily be
made of our present array of taxes. We could decide upon some minimum of
income which should be totally exempt from taxation on the ground that
it represented the smallest sum upon which a family can be sustained in
health and decency. Above that margin, we could arrange a graduated
scale of taxation which should present to each citizen a fair bill for
public expenses. That bill could be made payable in two or even four
instalments, to make the payment an easy matter for the tax-payer. This
arrangement once made, any increase of taxation would simply call for a
proportionate increase from each tax-payer. Argument would not lie in
the province of the Chancellor of the Exchequer, for the matter would be
finally settled. Argument would begin and end with the decision of
Parliament to spend certain moneys; _that would not be a_ _Budget
argument, but an argument upon public policy in expenditure_. And the
plainer the bill for taxes, the more closely expenditure would be
scanned.
My remarks, of course, must not be taken to condemn taxes upon alcohol
or taxes upon inheritances. And beyond lies the question of the
acquisition of monopolies by the State, and the consequent reduction of
taxation by reason of the State carrying on revenue-producing
undertakings.
CHAPTER XXII
THE DEATH DUTIES
In "Riches and Poverty," edition 1905, it was urged that the then
existing Estate Duties, ranging from 1 per cent. to 8 per cent., might
be sensibly increased. The revisions which have been made since 1905 are
clearly shown in the comparative table given on the next page, which
reviews in part the Estate Duties of the Budgets of 1894, 1907 and 1909.
The rates of Death Duty have been thus raised to about the level
suggested in "Riches and Poverty," edition 1905.
The scale does not represent the whole of the Death Duties. Not only is
the corpus of the property taxed under the scale, but the remainder,
after such taxation, is taxed again under separate scales of Legacy and
Succession Duties. I do not enter into the details here, but, generally,
such complications are to be deprecated. Let the State take its
equitable toll, but let it do so on a single progressive scale, and not
tax, and tax again, first taking a percentage from the estate, and next
taking a further percentage from the bit of the estate taken by a
brother or cousin or aunt of the deceased.
As will have been gathered from Chapter 4 the increase of the duties on
estates over £10,000 was more than justified. The great bulk of the
national wealth is held in estates of over £10,000 each. The following
facts (see Chapter 4) relating to the estates which pass in an average
year should never be lost sight of:
THE HARCOURT (1894), ASQUITH (1907), AND LLOYD GEORGE (1909)
DEATH DUTIES
-----------------------+---------+--------------------
| |
Value of Estate. |Harcourt,| Asquith, 1907.
| 1894. |
| |
-----------------------+---------+--------------------
Exceeds But not over |Per cent.| Per cent.
£ £ | |
100 500 | 1 | 1
500 1,000 | 2 | 2
1,000 10,000 | 3 | 3
| |
10,000 25,000 | 4 | 4
25,000 50,000 | 4½ | 4½
50,000 75,000 | 5 | 5
75,000 100,000 | 5½ | 5½
100,000 150,000 | 6 | 6
150,000 250,000 | 6½ | 7
250,000 500,000 | 7 | 8
| |
500,000 750,000 | 7½ | 9
750,000 1,000,000 | 7½ | 10
| |/--------^---------\
| |On First On
| |Million. Remainder.
1,000,000 1,500,000 | 8 | 10 11
1,500,000 2,000,000 | 8 | 10 12
2,000,000 2,500,000 | 8 | 10 13
2,500,000 3,000,000 | 8 | 10 14
3,000,000 | 8 | 10 15
-----------------------+---------+--------------------
-----------------------+-------------+---------------
| | Rates
Value of Estate. |Lloyd George,| suggested in
| 1909. | "Riches and
| |Poverty," 1905.
-----------------------+-------------+---------------
Exceeds But not over| Per cent. | Per cent.
£ £ | |
100 500 | 1 | 1
500 1,000 | 2 | 2
1,000 5,000 | 3 | 3-4
5,000 10,000 | 4 | 5-6
10,000 20,000 | 5 | 7
20,000 40,000 | 6 | 8
40,000 70,000 | 7 | 9
70,000 100,000 | 8 | 10
100,000 150,000 | 9 | 11
150,000 200,000 | 10 | 12
200,000 400,000 | 11 |}
400,000 600,000 | 12 |} 13
600,000 800,000 | 13 | 14
800,000 1,000,000 | 14 | 15
| |
| |
| |
1,000,000 | 15 | 16
| |
| |
| |
| |
-----------------------+-------------+---------------
DEATHS AND ESTATES IN THE UNITED KINGDOM
About 700,000 persons, including children, die every year.
Of these, about 620,000 die almost or quite penniless.
The balance of 80,000 persons leave £300,000,000.
Of these, 4,000 persons leave £200,000,000.
It is only necessary to state these extraordinary facts to show the
justice of Mr Lloyd George's reform of the Death Duties.
It is of interest and importance to show what a small proportion of the
capital passing at death is actually taken by the State. The following
figures show, for the years 1894-5 to 1908-9, the total amount of all
the Death Duties (i.e. not only the principal "Estate Duty," the rates
of which are given on p. 321, but of the Legacy and Succession Duties,
Settlement Estate Duty, etc.), received during the year, the total
estates upon which the duties were paid and the average aggregate rate
per cent. of the whole of the duties:
DEATH DUTIES PAID: 1894-5 TO 1908-9
Average
Fiscal Year. Total Total Estates. Aggregate
Death Duties. Rate of Duty
per cent.
£ £
1894-5 10,894,385 194,465,000 5.61
1895-6 14,088,608 249,942,000 5.63
1896-7 13,878,274 245,883,000 5.64
1897-8 15,449,190 270,326,000 5.71
1898-9 15,732,578 271,901,000 5.78
1899-1900 18,409,293 312,819,000 5.88
1900-1 16,721,129 284,884,000 5.87
1901-2 18,513,714 295,829,000 6.26
1902-3 17,913,177 296,382,000 6.04
1903-4 17,326,137 291,161,000 5.95
1904-5 17,258,431 284,309,000 6.07
1905-6 17,344,925 296,233,000 5.85
1906-7 18,958,763 319,579,000 5.93
1907-8 19,108,256 304,093,000 6.28
1908-9 18,310,280 294,662,000 6.21
These figures were prepared by Somerset House and given to the House of
Commons in September 1909 in answer to a question of Mr Thomas Gibson
Bowles.
In 1908-9, in spite of the increase of rates in 1907, the Death Duties
took but £18,300,000 or a little over 6 per cent. of property worth
£294,600,000.
But this is a partial statement of the facts. There is little doubt that
the estates passing yearly are worth nearer £400,000,000 than the
£300,000,000 which is officially reviewed and taxed. So that the total
burden of the Death Duties in 1908-9 was really about 4½ per cent.
There has been some talk in this connexion of diminishing and wasting
the national capital. The national capital was conservatively estimated
in Chapter 5 as about £13,000,000,000. The Death Duties are now taking
about £20,000,000 a year. £20,000,000 is contained just 650 times in
£13,000,000,000, so that, even if the £20,000,000 a year were wasted,
the national capital would waste away in six and a half centuries. But
the £20,000,000 a year is not lost: it is transferred from private
pockets to the State and used a hundredfold for the better advantage of
the nation than if it were not so transferred. One may go further and
say that if it were not taken and used for the furtherance of reform,
the national capital would cease to make increase. Expenditure upon
Education alone needs to be doubled if British work is to fructify in
the near future.
Some attention was given on page 76 to the question of the avoidance of
Death Duties by gifts _inter vivos_. The Finance Act of 1909 increased
to three years the period before death during which gifts passing _inter
vivos_ should be liable to Death Duties. It will be of interest to see
whether this checks the avoidance of Death Duties which has given us
such remarkable statistics as those recorded on page 76-77.
It is not necessary to dwell at length in this chapter upon
considerations connected with the dangers to Society involved in the
monopolization of wealth by a few people, for they were treated at some
length in earlier pages. I may usefully direct attention, however, to a
speech made by the President of the United States of America, Mr Taft,
in September 1909, in which he said:
"Let the State pass inheritance laws which shall require the division
of great fortunes among the children of descendants, and shall not
permit the multi-millionaire to leave his fortune in a mass. Make more
drastic the rule against perpetuities which obtain at common law, and
then impose a heavy graduated inheritance tax enabling the State to
share largely in the proceeds of such large accumulations of wealth
which would hardly have been brought about save under its protection
and aid. Thus gradually and effectively the concentration of wealth in
one or few hands will be neutralized, and the danger to the Republic
obviated."
These are the words, not of a Socialist, but of the elected of the
Conservatives of the United States. They may fittingly end our
consideration of the revised Death Duties.
The reformed Income Tax and Death Duties of 1909 will furnish, with all
their faults, a handsome revenue, and it may already be claimed that
what was urged in "Riches and Poverty," edition 1905, as to the means of
national regeneration, has been amply verified by accomplished facts.
CHAPTER XXIII
OF REVENUE WITHOUT TAXATION
After dealing at some length with the details of British taxation it is
well to point out why it is necessary for the British Government to
raise so much revenue by taxes.
It appears to be commonly taken for granted that in the matter of
national ways and means a source of revenue is the same thing as a
source of taxation. Perhaps it is not surprising that this idea is
prevalent in Britain, for of a truth we have scarcely any national
revenue save what is derived from the more or less just taxation of
British citizens.
Save in its power to levy taxes, the United Kingdom, as a State, is one
of the poorest in the world.
The British Government, as compared with many other governments, is
singularly lacking in property. It follows that it is singularly lacking
in natural State revenue. As a matter of fact, the only items of British
State property worth mentioning are (1) the Post Office, which brings in
about £5,000,000 a year; (2) a few Crown lands, which bring in about
£500,000 a year; and (3) The Suez Canal shares, bought by Lord
Beaconsfield, which bring in about £1,000,000 a year.
The total British State revenue from property is thus about £6,500,000,
and that is all. If the Government wants any more money it has to tax
the governed, a fact which arouses various emotions.
The consequence is that, as public expenses increase, our taxes
constantly swell. The items of natural State revenue are too small, even
if elastic, to meet the growing bills. This is found out by all parties.
A politician out of office may, and usually does, denounce new taxes,
but we never find the same politician, after taking office, taking off
the taxes he has denounced; he simply cannot do it. The Conservatives,
it will be remembered, were unfriendly to Sir William Harcourt's Death
Duties, but when they came into power they not only did not repeal them,
but it is a fact that they seriously considered increasing them.
I do not think it can be reasonably alleged that taxation has yet
reached an intolerable level, indeed the facts on that head are
sufficiently made plain in these pages. At the same time, I suppose that
none of us desires to increase the burden of taxation more than is
necessary.
Is it not well, then, to ask ourselves whether taxation need be the only
hope of State revenue? Here comes in a rather curious fact. We have
passed through troubled days in which additional taxation has been
denounced as "Socialistic," and the "Observer" newspaper tells its
readers constantly that modern Socialism simply means taxation.
_As a matter of fact, it is because the British Government has been one
of the least Socialistic in the world that it finds itself in 1910
raising so much of its revenue from taxation._
The Germans are heavily taxed, but they are so much poorer than the
British people that the sum they raise in taxes is much smaller than the
sum raised here. It should not be forgotten that, in considering German
taxes, we have to add the taxes raised by the governments of its various
kingdoms and States to the taxes raised by the German Imperial
Government. When that is done it will be found that the total amount so
raised, although considerable, is not nearly enough to meet the Imperial
and national expenditure. What is the explanation? I commend it most
earnestly to the politicians and publicists who fill the air with
clamour about Socialism.
Consider the following extract from the official description of German
Taxation in Blue Book, Cd. 4,750:
To make any profitable comparison of direct taxation in England and
Germany, it is necessary to take into consideration in the case of the
latter not merely the Imperial taxes, but also the taxes levied by the
Federal States. It is also important to remember that a _large portion
of the States' expenditure, in Prussia as much as 47 per cent., is
covered by the profits of railways and other industrial undertakings,
the State being thus enabled_, pro tanto, _to dispense with taxation_.
Varying, but usually considerable, proportions of the State revenues of
the kingdom of Bavaria, the kingdom of Saxony, the kingdom of
Wurtemberg, the six Grand Duchies, the five Duchies, and the seven
Principalities, not to mention the free cities, are derived similarly
from State undertakings, ranging from railways to forests, and from
mines to china factories.
I beg the reader to realize that but for these enormous State natural
revenues the Germany of to-day would not be able to build Dreadnoughts
or to sustain the greatest army in the world. Successful State Socialism
has been the backbone of German finance, and the secret of a big
expenditure and the maintenance of the greatest army in the world and
the second largest navy in the world by a poorer country than ours, in
which (basing ourselves on the official Income Tax Statistics of
Prussia) we are able to affirm that one-half of the people are under the
income line of £45 a year (17s. 3d. per week).
Germany derives from her Customs Duties, believed by ill-informed people
here to be the chief feeder of her revenues, about £30,000,000 a year.
This may be contrasted with a single item of German State Socialist
revenue:
NET PROFITS OF THE PRUSSIAN STATE RAILWAYS
£
1906 33,480,000
1907 34,323,000
1908 31,180,000
Surely it is worth the gravest consideration here that one-half the
State revenue of Prussia, the chief State of the German Empire, is
derived from the ownership of railways, forests, mines, and other
national undertakings. And there can be little doubt that Germany will
soon own and control her Power supply. _In 1910 the State railways of
the entire German Empire will yield a net profit of about £50,000,000,
meeting, in effect, the bill for German armaments._
CHAPTER XXIV
CONCLUSION
Lest there be any lack of perspective in our view of the distribution of
wealth and of the material progress of the working classes, I preface
this concluding chapter with a note upon former investigations of the
national income.
In 1868, Dudley Baxter, in his classical paper on the National Income
read to the Royal Statistical Society, estimated that in 1867, the
population being 30,000,000, the manual workers, then estimated to
number 10,960,000, took £325,000,000 out of a total national income of
£814,000,000. Thus the average wage of the manual workers (men, women
and children) was estimated at nearly £30 per head per annum.
Professor Leone Levi estimated the amount of wages taken by the manual
labourers in 1866 at £418,000,000, but he allowed for "play" only four
weeks in the year, whereas Baxter, for very excellent reasons which he
stated in his paper, allowed for 20 per cent. of lost time. Thus a great
part of the difference in the two estimates is accounted for.
In the "Economic Journal" for Sept. 1904, Professor A. L. Bowley, basing
his calculations of the total amount paid in wages largely upon the
figures of the Board of Trade Wages Census of 1886, making allowance for
enforced leisure, and also for the army of casuals and incompetents,
arrived at £350,000,000 as the sum paid in wages in 1867. This is a
striking confirmation of Dudley Baxter's estimate, for it is arrived at
by an entirely different route.
If, then, we adopt the estimate of Baxter we shall probably be as near
the truth as is now possible. Accepting it, we find that the manual
workers in 1867 took about 40 per cent. of the national income.
The manual workers in our present population of 44,000,000 maybe
estimated at 15,000,000 and they take, as we have seen, about
£700,000,000 out of a total estimated income of £1,840,000,000, or less
than 40 per cent. of the whole.
Thus the position of the manual workers, in relation to the general
wealth of the country, has not improved. They formed, with those
dependent upon them, the greater part of the nation of 1867,—forty-three
years ago,—and they enjoyed but about 40 per cent. of the national
income according to the careful estimate of Dudley Baxter. To-day, with
their army of dependents, they still form the greater part of the
nation, although not quite so great a part, and, according to the best
information available, they take less than 40 per cent. of the entire
income of the nation.
But, as will be seen from the figures given, the actual income of the
manual workers has increased. In 1867 it amounted to about £30 per head.
At the present time it amounts to about £46, 15s. per head.
And not only have money wages thus risen, but the purchasing power of
money has considerably increased in the last generation. The retail cost
of food, clothing, and furniture has fallen; but, on the other hand,
coal and rents have risen.
Between the increase in money wages and the increase in the purchasing
power of money there can be no question that the actual position of the
wage-earner has considerably improved in the last forty years. Amongst
other results, the death-rate has fallen, paupers have decreased, and
criminals have decreased. These and other important facts are shown in
the table on page 332.
SOME ITEMS IN MATERIAL PROGRESS 1867-1908
------------------------------+-----------------+------------
| 1867. | 1908.
------------------------------+-----------------+------------
Population | 30,500,000 | 44,500,000
| |
Average earnings of manual | |
workers (men, women and | |
children) | £30 | £46, 15s.
| |
Consumption of imported | |
food per head: | |
(_a_) Wheat per head, lbs.| 140 | 272
(_b_) Sugar " " lbs.| 44 | 76
(_c_) Rice " " lbs.| 6 | 18
(_d_) Tea " " lbs.| 3¾ | 6
| |
Consumption of Beer | |
(Gallons per head) | 27.78 26.62 |
| (1881 earliest |
|figure available)|
| |
Deaths | 634,008 | 676,634
| |
Death-rate (per 1,000) | 20.8 | 15.2
| |
Criminals convicted | 19,450 | 15,500
| |
Paupers (England and Wales) | |
Jan. 1st | 958,824 | 911,588
| |
Deposits in Post Office and | |
Trustee Savings Banks | £46,283,132 |£245,600,000
| |
Price of bread per 4 lb. loaf | 8d. | 5.8d.
| |
Board of Trade consumption | |
Index number (prices of | |
45 commodities expressed | |
as percentages of those of | |
1900) | 136.0 | 102.8
| (1871) |
------------------------------+-----------------+------------
With our knowledge of the conditions of the present, these facts are
only relatively satisfactory, and serve but to fill us with horror of
the past. We see that more bread is consumed to-day than in 1867, but
remember that 40 persons perish from exposure and starvation in the
streets of London year by year.[62] We see that the death-rate has
declined from 20.8 per 1,000 to 15.2 per 1,000 between 1867 and 1908,
but remember that in the latter year as many as 113,000 children
perished in England and Wales under the age of twelve months. We see
that the average wage has risen, but also that it now amounts to but
£46, 15s. per annum on a liberal estimate. We see that prices have
fallen, but remember that, in 1908, one-third of our population, in
spite of lower prices, have not sufficient means to command a proper
supply of the common necessaries of existence, no matter how severe
their thrift.
Writing in 1868, in the paper already referred to, Baxter wrote, in
dealing with the question of real earnings as distinguished from nominal
rates of wages, a passage which strikingly illustrates the conditions of
labour in his day:[63]
"Another point is the age at which a manual labourer ceases to be an
effective. I am afraid that 60 years is about the average; six or seven
years earlier than the Middle Classes. After that age a man becomes
unfit for hard work; and if he loses his old master, cannot find a new
one. In some trades, a man is disabled at 55 or 50. A coal-backer is
considered past work at 40. I have endeavoured to be on the safe side
by taking 65 as the termination of their working life, and have
excluded all above that age from my calculation of wages.
"But the most important point of all is the allowance which must be
made for what workmen call 'playing'; that is to say, being 'out of
work,' from whatever cause, whether forced or voluntary. It is here
that I am at issue with Professor Levi. He estimates the lost time at
no higher average than 4 weeks out of the 52, and thinks it
sufficiently covered by omitting from the wage-computation all workmen
above 60 years old, i.e. the non-effectives. If this were the real
state of things, England would be a perfect Paradise for working men!
If every man, woman, and child returned as a worker in the census had
full employment, at full wages, for 48 weeks out of the 52, there would
be no poverty at all. We should be in the Millennium! Far other is the
real state of affairs; and a very different tale would be told by
scores and even hundreds of thousands, congregated in our large cities,
and seeking in vain for sufficient work.
"I will take a good average instance (and a very large one) of the way
in which wages are earned in the building trades. These trades form a
whole, and include carpenters, bricklayers, masons, plasterers,
painters, and plumbers, and number in England and Wales, about 387,000
men above 20 years of age. In London their full time wages average 36s.
a week. In the country they are lower, 30s. to 28s. or 26s.; growing
less the farther we go northward. The full-work average may be taken at
30s. But it is only the best men, working for the best masters, that
are always sure of full time. These trades work on the hour system,
introduced at the instance of the men themselves, but a system of great
precariousness of employment. The large masters give regular wages to
their good workmen, but the smaller masters, especially at the East End
of London, engage a large proportion of their hands only for the job,
and then at once pay them off. All masters, when work grows slack,
immediately discharge the inferior hands, and the unsteady men, of whom
there are but too many even among clever workmen, and do not take them
on again till work revives. In bad times there are always a large
number out of employment. In prosperity much time is lost by keeping
Saint Monday, and by occasional strikes. There are also 40,000 men
between 55 and 65 years of age, who, in the building trade, are
considered as past hard work, and who suffer severely by want of
employment....
"Let us turn to another great branch of industry, the Agricultural
Labourers: whose numbers are, men, 650,000; boys, 190,000; women,
126,000; and girls, 36,000. Continuous employment has largely increased
since the New Poor Law of 1834, and good farmers now employ their men
regularly. But in many places such is not the custom. Near Broadstairs,
in Kent, I was told that, on an average, labourers are only employed 40
weeks in the year.... Turn next to the cotton manufacture, including
143,000 men, 82,000 boys, 150,000 women, and 121,000 girls; altogether,
496,000. We all know their periodical distresses. It may be said that
these were accidents. They are not mere accidents, but incidents,
natural incidents, of our manufacturing economy. They are sure to recur
under different forms; either from gluts, or strikes, or war; and they
must be allowed for in computations of earnings.
"I come lastly to instances from trades at the East End of London,
where I have lately had a great deal of experience. It is there that
the struggle for existence is most intense, from London being the
resort and refuge of the surplus population of other parts of the
country. The London Dock Labourers earn, when on full time, 15s. a
week; but so great is the competition that even in ordinary years they
are employed little more than half their time. During the past year 5s.
a week has been considered tolerably lucky....
"Cabinet-makers stand well in the lists of trades, their nominal wages
for the Kingdom being set down at 30s. a week. But the cabinet-makers
at the East End, a very numerous body, are in what is called the 'slop
trade,' and are ground down by the dealers, who own what are called
'slaughter-houses,' in which they take advantage of the necessities of
the small manufacturers (expressively called 'garret masters') and
compel them to sell their upholstery at little above the cost of
materials. Between dealers and want of work, I am told that numbers of
the 'slop' cabinet-makers are not earning 7s. 6d. a week.
"None but those who have examined the facts can have any idea of the
precariousness of employment in our large cities, and the large
proportion of time out of work, and also, I am bound to add, the loss
of time in many well paid trades from drinking habits. Taking all these
facts into account, I come to the conclusion, that for loss of work
from every cause, and for the non-effectives up to 65 years of age, who
are included in the census, _we ought to deduct fully 20 per cent. from
the nominal full time wages_.
"I will cite one more fact in confirmation. The average number of
paupers at one time in receipt of relief in 1866 was 916,000, being
less than for any of the four preceding years. The total number
relieved during 1866 may, on the authority of a Return of 1857, be
calculated at 3½ times that number, or 3,000,000.[64] All these may be
considered as belonging to the 16,000,000 of the Manual Labour Classes,
being as nearly as possible 20 per cent. on their numbers. But the
actual cases of relief give a very imperfect idea of the loss of work
and wages. A large proportion of the poor submit to great hardships,
and are many weeks, and even months, out of work before they will apply
to the Guardians. They exhaust their savings, they try to the utmost
their trade unions or benefit societies; they pawn little by little all
their furniture; and at last are driven to ask for relief. I am not
astonished at their reluctance, for what do they get? After waiting in
a crowd and in the most humiliating publicity, they get an order for
the stoneyard, with 6d. a day, and a loaf per week of bread for each of
their family. Sometimes, rather than accept the relief, they die of
starvation."
These words were written over forty years ago, but it would need little
emendation to give them application to-day. The growing strenuousness of
modern industry makes it more and not less difficult for the ageing to
earn a living. The increased use of machinery and the greater division
of labour have made experience of less value than of yore. The ageing
man resorts to hair dye to conceal the honourable age which is to rob
him of his livelihood. Baxter's remarks about the building trades are
absolutely true of to-day, but they now apply not to 400,000 men, but to
1,000,000. "All masters, when work grows slack, immediately discharge
the inferior hands.... In bad times there are always a large number out
of employment." The position of agricultural labourers has improved, but
chiefly because their rapidly decreasing numbers have placed a premium
upon their services. Even so, in parts of the country removed from
coal-mines, the most pitiable conditions prevail. Kettle broth is still
part of the menu of the Wiltshire labourer.
In the East End of London the economic position of the dock and
riverside labourers is much the same as Baxter described it, while in
the furniture trade the "garret masters" are still with us. True—most
honourably true—it is also that still the workers endure great hardships
before they will apply to the Guardians. "They exhaust their savings,
they try to the utmost their trade unions or benefit societies; they
pawn little by little all their furniture; and at last they are driven
to ask for relief."
The Board of Trade, after a careful examination of the question of
unemployment in 1904, arrived at the general conclusion that "The
average level of employment during the past four years has been almost
exactly the same as the average of the preceding forty years" (Cd.
2,337). The conditions of employment, the want of security of tenure,
are very much what they were in 1867.
As for pauperism, it is difficult to congratulate ourselves upon
improvement since 1867 when we remember that in England and Wales alone
1,500,000 to 2,000,000 persons are in receipt of relief in the course of
a single year. This statement rests upon ascertained facts, as will be
found by reference to the statistics given in our examination of the
question of Old Age Pensions. The population of England and Wales being
about 36,000,000 (1910) this means that _one person in every twenty_ has
recourse to the Poor Law Guardians during a single year.
If our national income had but increased at the same rate as our
population since 1867 it would, in 1908, have amounted to but about
£1,200,000,000. As we have seen, it is now about £1,840,000,000. Yet the
Error of Distribution remains so great that while the total population
in 1867 amounted to 30,000,000, we have to-day a nation of 30,000,000
poor people in our rich country, and many millions of these are living
under conditions of degrading poverty. Of those above the line of
primary poverty, millions are tied down by the conditions of their
labour to live in surroundings which preclude the proper enjoyment of
life or the rearing of healthy children. The comparatively high wages of
London are accompanied by rents high in proportion and frequently by
waste of income and time upon travelling expenses. In so far as the
manual labourers have been reduced in proportion to population it has
been to swell the ranks of black-coated working men, clerks, agents,
travellers, canvassers, and others, whose tenure of employment is
precarious, whose earnings are very low, and whose labour as we have
already noted is largely waste.
We have won through the horrors of the birth and establishment of the
factory system at the cost of physical deterioration. We have purchased
a great commerce at the price of crowding our population into the cities
and of robbing millions of strength and beauty. We have given our people
what we grimly call elementary education and robbed them of the elements
of a natural life. All this has been done that a few of us may enjoy a
superfluity of goods and services. Out of the travail of millions we
have added to a landed gentry an aristocracy of wealth. These, striding
over the bodies of the fallen, proclaim in accents of conviction the
prosperity of their country.
There leaps to the mind the mordant lines in which Ruskin, thirty years
ago, wrote a "modern version" of the Beatitudes[65]:—
Blessed are the Rich in Flesh, for theirs is the Kingdom of Earth.
Blessed are the Proud, in that they _have_ inherited the Earth.
Blessed are the Merciless, for they shall obtain Money.
There is no whit of exaggeration in these lines. The passage of thirty
years has but added to their sting. Thirty years of accumulation of the
results of toil in hands other than those of the toilers have had for
consummation the accusing series of facts which are examined in the
early chapters of this book. Deprivation for the many and luxury for the
few have degraded our national life at both ends of the scale. At the
one end, "thirteen millions on the verge of hunger," physically and
morally deteriorated through poverty and unloveliness. At the other, the
inheritors of the earth, "senseless conduits through which the strength
and riches of their native land are poured into the cup of the
fornication of its capital."
Blessed indeed are the Rich, for theirs is the governance of the realm,
theirs is the Kingdom. Theirs is a power above the throne, for it has
been a maxim of British politics that our government should be a poor
government, and a poor government cannot contend in the direction of
affairs with the imperium of wealth. This may be illustrated by our
attempts to "educate" the mass of the people. For a few brief years the
government, with small funds raised with timorous hands, does a little
to form the mind and character of the child. Even in these early years
it consents that the future proud citizen of Empire shall be improperly
fed and badly housed. These early moments passed, the mockery of
"education" ceases, and the child, taught by the State to read, to
write, and to cipher, becomes a unit of industry. At this point begins
the serious training of the citizen. Forthwith he is inducted into some
more or less worthy employment, that employment, as we have seen,
resulting from the great expenditure of the few and the poor expenditure
of the many. Careers are thus chiefly shaped by the wealthy, for theirs
is the greatest call. The demand for luxuries is too great; the demand
for necessaries is too small; the unit of industry is fortunate,
therefore, if he is inducted into useful service. The State washes its
hands of his development. The educational sham over, the real education
of life begins. So far as the State calls for privates of industry it is
chiefly to make them soldiers, sailors, makers of guns, builders of
battleships. The development of all things useful, of railways, of
canals, of roads, of cities, of houses, is resigned to the blind call
for commodities and the intelligence of individuals who, in search of
private gain, seek, without regard to the national well-being, to profit
by that blind call.
Yet the manner in which its people are employed matters everything to a
nation. It is not sufficient to give the child a smattering of
knowledge. We need to take a collective interest in the general
education of our citizens, and that education is the result of
expenditure. The consumer gives the order. Given a fairly equable
distribution of income, the call will be as to the greater part for
worthy things, as to the smaller part for luxuries. Given a grossly
unequal distribution, and the call for luxuries will be so great as to
divert a considerable part of the national labour into channels of waste
and degradation.
To keep a government poor is to keep it weak. The poor government may
resolve to educate, but it will have no means to carry out its resolve;
its teachers will be underpaid; its schools inefficient. The poor
government may pass Housing Acts; it will but call for better houses
that will not come when it does call for them. The poor government may
piously resolve to create small holdings; there will be no means to
carry out the pious resolve. The poor government may, at periodic
intervals, look the question of Unemployment in the face; its
legislation will but reflect its poverty, and be in its provisions an
acknowledgment that the power to employ, the power to govern, is in
other hands.
Even those who have striven to hold fast the curious faith that
civilization comes, not through collective service, but through
individual strife, are constrained to admit that much waste is going on.
It is noteworthy that Sir Robert Giffen, in one of his last essays on
Taxation, said:[66]
"When the proportion (of income appropriated by the state) becomes
one-tenth or less it is doubtful whether the state can do best for its
subjects by making the proportion still lower, that is, by abandoning
one tax after another, or whether equal or greater advantage would not
be gained by using the revenue for wise purposes under the direction of
the state, such as great works of sanitation, or water supply or public
defence. In other words, when taxes are very moderate and the revenue
appropriated by the state is a small part only of the aggregate of
individual incomes, it seems possible that individuals in a rich country
may waste individually resources which the state could apply to very
profitable purposes. The state, for instance, could perhaps more
usefully engage in some great works, such as establishing reservoirs of
water for the use of town populations on a systematic plan, or making a
tunnel under one of the channels between Ireland and Great Britain, or a
sea-canal across Scotland between the Clyde and the Forth, or purchasing
land from Irish landlords and transferring it to tenants, than allow
money to fructify or not fructify, as the case may be, in the pockets of
individuals. Probably there are no works more beneficial to a community
in the long run than those like a tunnel between Ireland and Great
Britain, which open an entirely new means of communication of
strategical as well as commercial value, but are not likely to pay the
individual _entrepreneur_ within a short period of time."
Here we have a reflection of the uneasy feeling that all is not well in
the disposition of the income of the community. Very true it is that
"individuals in a rich country may waste individually resources which
the State could apply to very profitable purposes." Even were the means
by which "Captain Roland fills his purse" moral, we should need to look
to Captain Roland's expenditure. The effects of the robbery do not end
with the impoverishment of the despoiled. The despoiler proceeds to
spend the contents of his fat purse, and in spending he buys bodies and
souls, and builds up vested interests in degrading occupations.
In the foregoing pages I have pointed both to mere palliatives of
existing evils and to real remedies which go to the root of things. Our
attempts to reform, our strivings towards organization, must in practice
have regard both to palliatives and to remedies. We have to keep in mind
both the impoverished and sometimes degraded creatures which are effects
of past and existing causes, while dealing drastically and radically
with the causes themselves. At present the greater part of the labours
of social reformers are directed to dealing with a succession of
distressful effects. Here are slums; how shall we rehouse their inmates?
Here are paupers; what shall we do with them? Here are unemployed; how
shall we keep them going until they find employers? Here are aged poor;
can we, should we, give them pensions? We owe a present duty in all
these and many other matters. The effects must be dealt with and
ameliorated. It is beyond question that there is a clear call to succour
the aged, to care for the weak, to aid poor women in their time of
trouble. The sufferer, the affected individual, the disease, must be
dealt with. But ever we must keep before us the causes which bring into
being the raw material of our social problems; ever we must have clear
vision of the crime of poverty in a wealthy country; ever we must seek
to come to grips with the original sin.
To deal with causes we must strike at the Error of Distribution by
gradually substituting public ownership for private ownership of the
means of production. In no other way can we secure for each worker in
the hive the full reward of his labour. So long as between the worker
and his just wage stands the private landlord and the private
capitalist, so long will poverty remain, and not poverty alone, but the
moral degradations which inevitably arise from the devotion of labour to
the service of waste. So long as the masses of the people are denied the
fruit of their own labour, so long will our civilization be a false
veneer, and our every noble thoroughfare be flanked by purlieus of
shame.
There is already a beginning made. A few hundred millions have been
applied as public capital in the ownership by many municipalities of
such services as tramways, gasworks, and waterworks. As we saw in our
examination of the national wealth, such capital is yet but a tiny
fraction of the whole, and it still bears a great mortgage and pays
interest to private hands. That interest, in process of time, will
disappear through the operation of sinking funds, and then, as to
certain services, the community will enter into its own with no tribute
to pay to private usurers. From the small beginnings made we must seek
to advance, nor need we be deterred by those who implore us to hasten
slowly. If Rome was not built in a day, Washington was built in not many
days, and the factory system itself is little more than a century old.
The lapse of a single generation might see well advanced the building of
our new city.
It would be a great pity if anyone were to imagine that the changes
necessary to secure the just reward of all forms of labour are either
difficult to effect or likely to cause dislocation in the making. As has
been pointed out, the greater number of our industrial concerns are
already shaped in the form of limited liability companies, the
shareholders in which are dumb, while the management is in the hands of
paid officials. In 1902-3, while private firms were assessed to Income
Tax on £193,000,000, public companies were assessed on £239,000,000. In
1907-8 the respective figures were £183,000,000 and £259,000,000. The
re-shaping proceeds apace. The reform which needs to be effected is to
substitute the community at large for the dumb shareholders. Management,
ability, invention, would be properly rewarded, as they are now rewarded
in some cases, and as they are not now rewarded in many cases. The only
change would be the gradual substitution of the community for the
shareholders, and the consequent disappearance of unearned incomes. Such
portions of the product as were necessary for application as new capital
would be so applied by the community. For the rest, the whole of the
product would go to labour. Saving, the necessary saving, without which
labour would go without tools, would be simply and automatically
effected, and capital would take its true and rightful place as the
handmaiden of labour.
Let us not go further without a vision and a hope. That vision, that
hope, is not of a regimented society, but of a community relieved from
nine-tenths of its present irksome routine and carking care. If the
individual is to be set free it can only be in a society so organized as
to reduce the labour employed in the production of common necessaries to
a minimum. That minimum cannot be secured without the organization of
each of the great branches of production and distribution. Common needs
can be satisfied with little labour if labour be properly applied. The
work of a few will feed a hundred or supply exquisite cloth for the
clothing of fifty. The work for a few hours per day of every adult
member of the community will be ample to supply every comfort in each
season to all. Thus set free, the lives of men will turn to the
uplifting, individual work which is the pride of the craftsman. The
dwellings of men will contain not only the socialized products within
common reach, but the proud individual achievements of their inmates.
The simple and beautiful clothing of the community will chiefly be made
of fabrics woven in the socialized factories, but it will often be
worked by the loving hands of women. A happy union of labour economized
in routine work and labour lavished upon individual work will uplift the
crafts of the future and the character of those who follow them. The
abominations of machine-made ornament will disappear, and art be wedded
to everyday life. Each new invention to save labour in mining, or
tilling, or building, or spinning, will be hailed with joy as a release
from toil and a gift of more time in which to do individual work. The
inventor, the originator, now unhappily compelled to hunt for a
capitalist and bow low his genius before some individual distinguished
only for that gift of acquisitiveness, that business ability, which is
the lowest attribute of mankind, will see his idea put to the test and
reap not unholy gains, but the honour of his fellows if it is not found
wanting. The painter, no longer compelled to paint the portraits of the
rich and not necessarily beautiful, will ally his gifts with the common
life of men and be carried in triumph before the enduring monuments of
his genius. The organizer, the man of arrangement, will be invited to
exercise his talent, not in over-reaching and despoiling his fellows,
but in planning their welfare in a thousand new schemes of development.
No host of wasteful workers will be found in the industrial camp.
Accounts will be simple and clerks few. No travellers, agents or touts
will be needed to push doubtful commodities. The sham and the substitute
will be found only in museums. It will be obviously ridiculous to employ
any but good materials, for labour can only be economized by producing
the things which are the best of their kind. Policies of insurance,
those typical documents of a community of prey, will be read in the
public archives with much the same feelings as we now read a warrant for
the burning of a Bruno. The young men who now waste their time in ruling
up books in banks and insurance offices or in serving writs will find
manly and useful work. The production of commodities will be
commensurate with the labour put forth, unemployment will be one of the
few crimes known to the statute-book, and last, but not least, the
economic dependence of woman will cease.
The attainment of such ends will only be difficult as long as we refuse
to apply scientific methods to the ordering of common affairs. It is in
the domain of politics alone that men refuse to apply first principles
to the solution of problems. The mental daring which has accomplished so
much in engineering, in astronomy, in surgery, in every department of
science, is replaced in the sphere of politics by a timorous tinkering
with admitted evils. With things the scientist has worked marvels in a
single century. With those marvels the politician has done little. The
scientist has applied his skill to locomotion; the politician has
refused to avail himself of that skill in order to distribute the
population healthily. The scientist has stated the conditions of health;
the politician has refused to create those conditions. The scientist has
supplied the tools; the politician has neglected to take them up.
The problem of riches and poverty is of the simplest. It presents none
of the difficulties which attach to the measurement of the mass of the
sun, or the treatment of such a disease as cancer. Science has presented
us with such instruments that we can easily create a tremendous
superfluity of commodities if we choose to do so. We know how to
produce; we know how to transport the results of our production. The
appliances at our command, wielded by the labour of 44,000,000 people,
could furnish many more foot-tons of work than are needed to give proper
housing, suitable clothing and good food to every unit of the community.
There is here no impenetrable secret; we have read enough in the book of
Nature to control her forces to effect; our power of production is not
too small, but already greater than our need. As I have pointed out in
an earlier page, if invention went no further if science now came to a
standstill, we should have tools more than adequate to abolish poverty.
Unfortunately the politicians and the economists have never discussed
the question of poverty from this point of view. They have found men
buying and selling, and as buyers and sellers hunting for profits they
have discussed them. Volumes have been written on such subjects as
"rent," "interest," or "value," but nothing has been done to inquire how
much work is needed to feed, clothe and house a community, and how best
that work may be accomplished. In designing an engine, the man of
science considers the work to be done and the known means to do it. Is
it too much to ask that in ordering the affairs of a nation, statesmen
should consider the quantity of commodities needed to give material
happiness and the known means to produce and distribute them? To make
the best use of our energies, to profit fully by the discoveries and
inventions of the living and the dead, we must come to a common
agreement as to the work which needs to be done and determine that that
work shall be accomplished. For want of that agreement and
determination, for want, that is, of a wise collectivism, the greater
number of our people are poor.
It is probable that the earliest readers of this book will be of those
who, like myself, are amongst the favoured few whose work brings them
pleasure and the means of happiness. To these the first appeal. Is it a
good thing, is it an honourable thing, to be one of the few whose bark
is borne upon the waters of wretchedness, whose fortunes float upon a
sea of unfathomable depths of despair? Look downwards and you shall see
monsters that once were human, frailties that once were women, devils
that once were children. These are the product of the individual strife
in which it is not always the noblest thing to succeed, but in which it
is ever a terrible thing to fail. Is success worth having which is
purchased at such a price?
The last appeal shall be to the poor. It is no escape from labour which
the thinking man offers the people. There are no honourable avenues to
ease and luxury in the organization which would abolish poverty. It is a
world of service which a civilization would substitute for a world of
serfdom and pain. But if, realizing that the world has no room for the
idle, the people would rise to a freedom only bounded by the knowledge
of, and necessity for, collective decision, then there is the broadest
avenue for hope and the clearest call to action. The achievements of
those who are gone, these are the inheritance of the people. The only
true riches of the nation, men and women, these are the people
themselves. The people have but to will it, and we set our faces towards
a civilization.
[Footnote 62: "Deaths from Starvation or Accelerated by Privation
(London)." Issued Sept. 14th, 1904.]
[Footnote 63: Quoted from Dudley Baxter's "The National Income," by kind
permission of the publishers, Messrs Macmillan & Co.]
[Footnote 64: In saying this Dudley Baxter committed one of the few
errors which can properly be laid to his charge. See Chapter 19.]
[Footnote 65: "Usury," a preface re-published in "On the Old Road."]
[Footnote 66: "Encyclopædia Britannica," Volume 33, page 200.]
INDEX
Abatements, Income Tax, 36, 297
Accidents, Industrial:
Engineering Works, 137
Factories and Workshops, 127, 128
Mines, 133
Railways, 136
Ships, 137
Total, all Trades, 138
Advertising, 253
Afforestation, 248
Aged Poor, 272
Agricultural Labourers' Wages, 109, 155
Agricultural Land, Value of, 62, 68
Agriculture, as Field for Employment, 240
Anderson, Miss A. M., on Maternity Funds, 180
Andrew, George, Report on German Schools, 192
Anthrax, 130
Area, Control of, 242
Area, Distinguishing Attribute of Land, 81
Area of United Kingdom, 81
Army Material, Value of, 66
Ashby, Dr Hy., on Poor Mothers, 174
Asquith, H. H., Death Duties, 321
Differentiates Income Tax, 303
Old Age Pensions Act, 284
Average Wage, 29
Back-to-Back Houses, 214
"Back to the Land," 242
Bateman, John, on Landowners, 82
Bathing in Schools, 193
Baxter, Dudley, on Conditions of Labour in 1868, 333
On Income Tax Evasion, 13
On Loss of Wages, 26
On National Income in 1867, 330
Beaulieu, M. Leroy, on Eliminating Middlemen, 254
Beer Consumption, 332
Belgian State Railways, Success of, 265
Bentham, Jeremy, Suggested Exemption of Small Incomes from Taxation, 317
Births, in United Kingdom, 173
Board of Trade, Estimate of Wages, 30
Wage Census, 21
Boot Trade, 147, 156
Bournville Garden City, 223
Bowley, A. L., Estimate of Wages, 30
On Loss of Wages, 26
On Wages in 1867, 330
Boy Labour in Mines, 136
Bradford School Children, Condition of, 194
Bread, Fall in Price of, 332
Bricklayers' Wages, 108
British Association, Committee on Small Incomes, 21
British Government, Poverty of, 326
Budget, Is an Annual Debate Necessary?, 315
Tradition of Secrecy Unnecessary, 315
Building Societies' Funds, 56
Burns, John, Housing Act, 221
Campbell-Bannerman, Sir H., on Poverty, 5
Canals, Value of, 64
Capital, In Few Hands, 79
In Relation to Housing, 229
Of United Kingdom, 62
Of Working Classes, 57, 80
Waste of, 158
Capitalization of Usury, 101
Carpenters' Wages, 108
Casual Workers, Earnings, 27
Census, Inadequacy of, 123
Of Incomes, Importance of, 308, 312, 315
Of Wages, 21
Charity Organization Society, Thought Old Age Pensions Too Costly, 283
Children, National Responsibility for, 173
Should be the Chief Care of the Reformer, 173
Underfed, 196
Clerks, 18
Number of, 253
Coal Distribution, should be Municipal, 269
Miners, Number of, 268
Production, 267
Collectivism, Assisted by Joint-Stock Principle, 344
By Economizing Labour Creates Individual Freedom, 345
Necessity of, 343
And Revenue, 326
Combination Accentuating Error of Distribution, 269
"Comfortable" Persons, Number of, 48
Commercial Travellers, 19
Number of, 252
Commons, Value of, 66
Company Promotion, 166
Competition Disappearing, 269
Waste through, 255
Compositors' Wages, 109
Consumption of Food, Growth of, 332
Continuation Schools Advocated, 204
Co-operative Societies' Funds, 56
Cost of Living, 115
Cotton Trade, 143
Criminals, Decline of, 332
Crowley, Dr R. H., on Bradford School Children, 193
Cunningham, Professor D. J., on Physical Deterioration, 173
Customs Duties, 3
Death Duties:
And Length of Life, 73
Assessments, Stationariness of, 76
Avoidance of, 53, 54, 77
Described, 320
Do they Waste Capital?, 323
Still Low, 323
Death-rate, Fall of, 332
Deaths from Mining Accidents, 132
Deaths in United Kingdom, 54
Declaring Incomes, Importance of, 308
Differentiation of Income Tax, 303
Diseases of Occupations, 129
Distribution, Combination in, 256
Of Capital, 79
Of Income, 32, 47, 48
Of Land, 82, 83
Of Wealth in Practice Illustrated, 94
Doctor, in the School, 193
Dressmaking, 151
Dundee, Physical Deterioration, 139
Education, 181, 190
Children should be Trained in Expression, 201
Continuation Schools Necessary, 204
Importance of Training in Observation, 199
Science Teaching, 202
Education (Provision of Meals) Act, 198
Eichholz, Dr A., on Poor Children, 174
Electricity Should be Publicly Controlled, 257
Employers Compelled to Disclose Employees' Incomes, 311
Engineers, Unemployment amongst, 28
Wages, 109
Estate Duties. See Death Duties
Estates, 1904-1908, 52
Classified by Nature, 78
Classified by Size, 52, 74
Passing Per Annum, 52, 55
Of Rich and Poor, 51
Expectation of Life, 211
Expenditure Directs Labour, 141
Factories, Accidents in, 127
Factory and Workshop Act, 125
And Maternity, 178
Factory Inspection, 126
Farmers' Capital, 63, 69
Profits, 19
Finance Act, 1907, 14, 302
Fiscal Policy, 3
Food, Consumption, Growth of, 332
Duties for Revenue, 289
Expenditure on, 154
Price of, 115
Foreign Competition and Education, 202, 204
Foreign Investments, 14
Fox, Arthur Wilson, on Agricultural Wages, 155
Friendly Societies' Funds, 56
Furniture, Value of, 64, 70
Gas Companies' Profits, 105
Gas Works, Value of, 64
Genius not a Class Possession, 191
George, Henry, on Necessary Monopolies, 255
Germany, Large Revenue from Socialism, 328
Giffen, Sir Robert, Estimate of Aggregate Wages, 1886, 25
On Wages, 22
On Waste of Capital, 341
Government by the Rich, 270
Growth of National Income, 17
Hackney, Unemployed in, 119
Harcourt, Sir Wm., Death Duties, 321
Horsfall, T. C., on Town Planning, 221
Houses, Clue to Income Tax Payers, 42
In Great Britain, 40, 43
Value of, 62, 68
Housing, 88, 209
Loans Proposed, 231
Hunter, Robert, on American Poverty, 5
Hygiene Should be Taught in Schools, 181
Income, Average in 1908, 32
Income Tax, Abatements, 36, 297
As it is, Illustrated, 307
Assessments, 12, 33
Assessments, 1893-1908, 10
Chapter on, 291
Differentiation, 14, 303
Evasion, 13
Graduation Advocated, 312
History of, 291
Origin of Schedules, 292
Payers, Growth of, 37, 112
Payers Measured by House Rent, 42
Payers, Number of, 44
Payers over £700, 44
Provisions Summarized, 306
Reaches Unearned Increment, 296
Reforms Advocated, 308
Schedule A Described, 298
Schedule B Described, 299
Schedule C Described, 300
Schedule D Described, 300
Schedule E Described, 302
Successor of "Land Tax," 291
Incomes, between £160 and £700, 39
Of Lower Middle Classes, 20
Of Middle Classes, 36
Revealed by Employers, 311
Individual Freedom through Collectivism, 345
Industrial Accidents, 125
Infant Mortality, 177
Inhabited House Duty, 40, 89
Described, 302
_Inter Vivos_ Avoidance of Death Duties, 77
Interest and Distribution, 93
Invalidity Insurance, 286
Inventions, Foreign Progress, 202
Iron Works, Value of, 64
Ironfounders' Wages, 109
Jews and Maternity, 185
Labour Exchanges, 124
Labour Party and Unemployment, 124
Land, and Town Planning, 218
Nationalization, 242
Of United Kingdom, 81
Recovery in Agricultural Values, 246
Land-Tax, was an Income Tax, 292
Land Values, 86
Landowners, 82, 83
Lead Poisoning, 130
Legal Profession, Persons Employed, 254
Levi, Leone, on Manual Labourers' Earnings in 1866, 330
On Unemployment, 25
Living, Cost of, 115
Lloyd George, D., Death Duties, 321
Grants Special Abatement in Respect of Children, 314
Income Tax Reforms, 303
Local Loans, 62, 67
London, Area of, 92
Lower Middle Classes, Incomes of, 17
Luxuries, Expenditure on, 160
McCleary, Dr G. F., on Milk Supply, 260
Mackenzie, Dr Leslie, on Milk Supply, 260
Malins, Dr E., on Poor Children, 174
Manual Workers, Number of, 21
Marshall, Professor A., on Waste, 158
Maternity amongst Poor, 178
Maternity Fund, Suggestion for a National, 184, 185
Medical Officers of Health, 183
Middle Classes, Small Incomes of, 36
Middlemen, Waste through, 253
Milk Distribution, Waste in, 259
Milk Supply, Should be Publicly Owned, 261
Mill, John Stuart, on Principle of Graduation, 317
Miners' Wages, 108
Mines, Value of, 64
Mining, Accidents, 130
Employment, 268
Royalties, 85
Misdirection of Labour, 150
Monopoly, Economy of, 256
Monopoly of Capital, 72
Monopoly of Wealth a Danger to the State, 141, 158, 324
Multiple Shops, 19, 254
Municipal Trading, Case for, 264
Success of, 262
National Capital, 61
National Debt, 62, 63, 67
National Dividend, how Distributed, 47, 48
National Housing Loans Proposed, 231
National Income, Growth of, 50
How Distributed, 47, 48
In 1908, 31
What it is, 8
National Medical Service, 183
National Property, 62, 65
Nationalization of Land, 219, 242
Navy, Value of, 66
Notification of Births, 184
Occupations Influenced by Wealth Distribution, 141
Old Age Pensioners, Number of, 285
Old Age Pensions, 272
Cost of Not "Expenditure," 286
Old Age Pensions Act, 284
Organization of Industry, 124, 250
Overcrowding, 212
Oversea Investments, 14, 65, 160
Paupers, Day Counts of, 274
Decline of, 332
Relieved in a Year, 275, 276
Physical Deterioration, 139
Physical Training, 192
Poor, Property of, 57
Population, Growth of, 332
Poverty, Campbell-Bannerman quoted, 5
In Old Age, 272
Line, 153
Measured, 49, 50
Now Unnecessary, 347
Of British Government, 340
Shortens Life, 211
Power Supply, Should be National, 256
Prices, Fall of, 332
Index Number, 332
Production, Combination in, 256
Production and Waste, 251
Profits Examined, 94
Growth of, 111, 112
Progress since 1867, 332
Prosperity and Fiscal Policy, 3
Prussian State Railways, 329
Public Ownership, the only Path to Equitable Distribution, 262
Public Works and Unemployment, 124
Railway Capital, Watering of, 102
Fares under Nationalization, 266
Servants, Accidents, 136
Railways, Value of, 63
Rates, in Nature of Rent-charge, 90
Rent, and Profit, 97
Estimate of Aggregate, 84, 85, 86
Why Small Relatively to Profits, 86
Revenue without Taxation, 326
Rich, Estates of, 58
Number of, 48, 50
Right to Work Bill, 123
Roads, Value of, 66
Rowntree, Poverty Line, 153
Rural Depopulation, 234
Ruskin, John, His modern version of the Beatitudes, 339
Savings, 55, 56, 80
Growth of, 332
Savings Banks' Funds, 56
Science, Important to Teach, 202
Seamen, Accidents, 137
Segregation of Unfit, 187
Shop Assistants, 18
Shopkeepers, 18, 254
Site Value, 87
Smith, Adam, on Taxation, 287
Socialism, Reduces Taxation, 328
Super-Tax, 305
Taft, President, on Inheritance Duties, 324
Taxation and Distribution, 289
Direct, Advocated, 318
Doctrine of Ability, 288
Indirect, Deprecated, 317
Not the Only Means of Revenue, 326
Should be Simplified, 318
Teachers, 18
Thrift Institutions, 56
Town Planning, 217, 221
Trade Capital, Value of, 63, 69
Trade Unions, Expenditure on Unemployment, 121
Funds, 56
Superannuation, 280
Unemployment, 116
Tradesmen, 254
Transport should be a National Function, 256
Trust Rule, 269
Unemployed, Probable Number of, 122
Unemployment, 28, 107
Amongst Trade Unionists, 116
Cost of, 121
During 40 Years, 337
In America, 5
In Middle Classes, 122
Insurance, 123
Only to be Remedied by Public Ownership, 270
"Remedies" for, 123, 124
Unfit, Segregation of, 187
United Kingdom, Area, 81
United States, Industrial Fatalities, 6
Poverty of, 5
Usury, 101
Wage Census, 21
Wage Earners, Number of, 21
Wage, Average, 29, 331
Growth of, 332
Wages, 115
Aggregate in 1908, 29
Average in 1908, 27
In 1886, 23
Movement of, 27, 108, 111, 112
Not Raised by High Profits, 101
Stationariness of, 50
Waste of Labour, 251
Waterworks, Value of, 64
Wheat, Imports of, 245
Wheat Prices, 247
Whitehaven Colliery Explosion, 131
Woollen Trade, 145
Women Health Inspectors, 182
Women Workers in America, 6
Workhouse Inmates Classified, 281
Working Class "Capital," 80
Working Classes, Material Progress of, 330