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.