This great increase of taxation, to a considerable extent, ‘assimilated Ireland to Great Britain in finance;’ placed the two countries under nearly the same fiscal system; made the taxes of each not far from equal. This assimilation, however, was still by no means complete—indeed, is not complete to the present day; Ireland has still fiscal privileges under the Treaty of Union; and this should be carefully borne in mind. Mr. Gladstone, moreover, when he made this increase, acknowledged that Ireland remained a distinct country, entitled to immunities of her own; when he made her liable to the income tax, he cancelled a debt of £4,000,000 which he professed she owed; and if this was an illusory pretence, for her liability for this reason was more than doubtful, and the income tax she has since paid has exceeded £23,000,000, still he distinctly admitted the principle—indeed, it has always been admitted by statesmen worthy of the name. The enormous new burdens imposed on Ireland, from 1853 to 1860, provoked widespread and profound discontent; a Parliamentary inquiry was conceded; a Committee of the House of Commons went into the subject in 1863-64. But the representation of Ireland, I have said, was feeble; her complaints were stifled by the arts of the treasury; the arguments of her members were overborne by specious but utterly false sophistry; the inquiry came to nothing as regards her interests. The question remained in abeyance for years; the Irish reforms of Mr. Gladstone, from 1869 to 1873, the troubles caused by the Land and the National Leagues, and the Home Rule agitation that followed, turned public attention away from the subject; but it was not forgotten by well-informed Irishmen; two real economists, Butt and Judge Longfield, insisted that Ireland had here a grievance; and this was the opinion of several independent gentlemen, survivors of the illustrious school of Grattan. At last Mr. Goschen, perhaps moved by remonstrances from Ireland being urged again, appointed a Committee of the House of Commons to examine into, and to report upon, ‘the equity of the financial relations in regard to the resources and the population of the Three Kingdoms;’ Mr. Gladstone, in 1893, recurred to the subject, which, rather unaccountably, had been let drop. He directed a Commission of great authority, composed for the most part of expert Englishmen, and presided over by the late Mr. Childers, a Chancellor of the Exchequer of Mr. Gladstone, to inquire thoroughly into the whole question of the financial relations of Great Britain and Ireland, and fully to set forth the conclusions they should form. The scope of the investigation was to include the history of the subject since the Union; a consideration of the financial resources of Great Britain and Ireland regarded as distinct countries, and the principles to be kept in mind in forming a correct judgment; and, finally, the charge of Ireland with respect to the State, and the contribution which Ireland should make to it.[163]
This inquiry, set on foot by a British statesman who had made himself notorious for ‘assimilating Great Britain and Ireland in finance,’ proceeded, nevertheless, upon an admission that, financially, the two countries were still distinct, and that the resources of each—their ‘taxable capacity,’ in other words, a phrase turned into absurd ridicule—afforded the true and the only test, as to the equity of Irish compared to British taxation. The Commissioners were engaged in their arduous task for months; they explained, with a fulness and clearness never before so complete, the history of the financial relations between Great Britain and Ireland. They brought distinctly out the fiscal position of the two countries before the Union; they set forth at length the financial arrangements made in 1800-01; they described the compromise effected in 1816; they dwelt on the fiscal policy of Peel to Ireland, and placed it in significant contrast with that of Mr. Gladstone; and they conclusively proved that, from the Union to the present time, Great Britain and Ireland had been treated financially as separate countries, despite the ‘assimilation’ of 1853-60, and that the right of Ireland, under the Treaty of Union, to the ‘exemptions and abatements’ secured to her, these being interpreted as the case requires, still give her immunities from taxation especially her own, which must be recognised if she is to obtain justice. Turning, then, to the resources of Great Britain and Ireland, regarded as apart, as being the true criterion of the taxation which Ireland ought to bear, the Commissioners reviewed a great mass of evidence, which, as far as was perhaps possible, made the truth manifest, and arrived at conclusions which appear to be decisive. Comparing the death duties of Ireland and of Great Britain, the proportion is about 1 to 18; comparing the income tax, it is about 1 to 22; taking a great variety of other tests, receipts of railways, savings banks deposits, money and postal orders, and letters and telegrams, it varies from 1 to 24 and 16; and an estimate of the income of the two countries, an estimate certainly not fair to Ireland, gives a proportion of about 1 to 18. There are many reasons that these figures exaggerate the true resources of Ireland, but, assuming them to be approximately correct, the Commission has reported that Great Britain exceeds Ireland in resources by 20 to 1; in other words, that the ‘taxable capacity of Ireland, as contrasted with that of Great Britain, cannot now be more than as 1 to 20.’[164] Applying this inference to the taxation of the two countries, the conclusions formed by this tribunal can hardly admit of question. The revenue and taxation of Ireland compared with that of Great Britain from 1889 to 1894 has been £7,300,000 and £7,800,000 against from £85,000,000 to £89,000,000, that is, Ireland contributed from 8 to 9 per cent. of the sum total. But if the resources of Ireland are only one-twentieth of those of Great Britain, her taxation ought to be one-twentieth only, that is, it ought not to be from £7,300,000 to £7,800,000; it ought to be less than £5,000,000; not 8 or 9 per cent., but less than 5 per cent. It follows from this that Ireland has been overtaxed at the rate of between two and three millions a year, and that for a very considerable space of time.[165]
Enormous against Ireland as is this excess of taxation, it may amount to a very much larger sum, if the national account be taken on another, perhaps a sounder, basis. There is the highest authority to show that taxation ought only to fall, in the instance of any given country, on the surplus remaining over and above the cost of the necessaries of life; and as regards the populations of Great Britain and Ireland, this cost may be assumed to be £12 a head. But if we take the income of Great Britain to be 1400 millions sterling, the cost of the necessaries of life at the above rate would for Great Britain be a sum of 324 millions; and the surplus available for taxation would be 1076 millions. On the other hand, if we turn to Ireland, the poor country, and suppose her income to be 76 millions sterling, the cost of the necessaries of life for Ireland would be a sum of 46 millions; and the surplus available for taxation would be 30 millions only. On this hypothesis, the resources of Ireland which might be fairly taxed—her taxable capacity, in a word—would, compared with the resources of Great Britain, be, not as 1 to 20, but as 1 to 36 only; and her taxation ought to be less than £3,000,000, not, as before mentioned, less than £5,000,000. The Childers Commission, no doubt, with the exception of one of its members, did not give its sanction to this conclusion; but it was that formed by Sir Robert Giffen, a master of the subject on all its bearings, and it cannot, in common fairness, be left out of sight. Sir Robert Giffen’s view is expressed in these words; it will be observed that his figures do not correspond with those just cited; but the only point to consider is the principle on which he takes his stand: ‘If you deduct a minimum sum, so much per head from each of the community, as a sort of minimum sum, though you would not wish to take anything from a man who had no more than that, then the taxable income would be the whole income in each country above that sum. That was the sort of general idea. If you apply that to Ireland, and take a minimum sum of, say, £12 a head, you would get upon the basis of an Irish income of £76,000,000 a taxable surplus, I think, now of about £22,000,000, and in Great Britain your taxable surplus would come to over £900,000,000.’[166]
Setting, however, these last considerations aside, the Childers Commission has conclusively shown that Ireland is very largely overtaxed, and has been so for a long series of years; and the figures that represent this great overcharge by no means represent the real difference of the burdens imposed on the two countries. It does not require the authority of Pitt to tell us that even equal taxation, equally applied, is felt much more acutely by a poor community than by one that is rich and prosperous; let us assume, what is by no means the fact, that this equality exists as between Great Britain and Ireland, still Ireland suffers much more than Great Britain. As Mill remarked a long time ago, ‘It is not the same thing to take £2 from a man who has £40 a year, as to take £4 from a man who has £80, or £40 from a man who has £800; the sacrifice imposed on the taxpayer is greater upon the man from whom you take £2 out of £40 than it is on the man from whom you take £40 out of £800, although the proportion is the same.’ A few examples, taken from the case of Great Britain and Ireland, will make the truth of this proposition perfectly clear. The wages of an agricultural labourer in Great Britain are, say, £40 a year; the wages of an agricultural labourer in Ireland are, say, £26; the first pays £3 taxes on his tea and tobacco; the second pays only £2; but the £2 are obviously much the heavier charge. Or suppose that a British artisan has £100 a year, and an Irish artisan no more than £80; is not the first more lightly taxed than the second, if he contributes £5 to the revenue against £4? And the same thing happens if we ascend the social scale; the £150 income tax paid by a British landlord of £3000 a year is not felt by him to be such a charge as the £50 paid by an Irish landlord of £1000 a year; the same principle would extend to the profits of trade were there small sums in Ireland and large sums in Great Britain. Make taxes, therefore, as equal as possible, and make their incidence completely equal, still, in the case of a poor compared to a wealthy country, the real burden on the taxpayer will be very different; it was for this reason that the late Mr. Nassau Senior, an economist of no ordinary parts, pointedly remarked, as regards British and Irish taxation, ‘England is the most lightly taxed and Ireland the most heavily taxed country in Europe, although both are nominally liable to equal taxation: I do not believe that Ireland is a poor country because she is overtaxed, but I think she is overtaxed because she is poor.’[167]
Ireland, therefore, on a full review of the argument, has been overtaxed at least between two and three millions sterling a year for certainly more than forty years; and this excess, as she is a very poor country, is, in her case especially severe. The trend of taxation, if the phrase may be employed, as we follow its course, during a long period, clearly indicates that she has suffered from grave financial wrong. In 1819-20, we have seen, the taxation of Great Britain was at the rate of £3 13s. a head, that of Ireland being 15s. 5d.; the proportion was £2 13s. 1d. and £1 6s. 7d. in 1859-60; in 1893 it was £2 4s. and £1 8s.; in other words, the imposts of the wealthy country were progressively decreased, while the imposts of the poor country were progressively raised. This distinction, no doubt, has been partly due to the fact that the population of Great Britain has been largely augmented, and the population of Ireland has been enormously reduced in numbers; the charge in Great Britain has been distributed among ever growing millions, the charge in Ireland has been concentrated upon ever lessening thousands; but this will not nearly account for the difference; ‘the wealthier country’ it has been caustically said, ‘was taxed less and less as it became more wealthy; the poorer country was burdened more and more as its poverty increased.’[168] And the overcharge on Ireland is all the more grievous because it owed its origin to the policy of free trade; and this policy has been a questionable boon to Ireland, while to Great Britain it has been an immense benefit. No doubt the cheapening of the price of the necessaries and of some of the conveniences of life, which has been one of the results of free trade, has been a great advantage to the Irish labourer, artisan, and mere cottar peasant; but free trade has been injurious to the real Irish farmer and the Irish landlord, and to most of the classes connected with the land; and the land is the main source of the scanty wealth of Ireland. Free trade, on the other hand, has been a principal cause of the extraordinary development of the material welfare of England which has been witnessed during the last fifty years; it has doubled and trebled her gigantic manufactures and trade, if her agriculture is by no means flourishing. This striking contrast gives pain to right-minded Irishmen; they feel, as Grattan predicted would be the case, that their country’s interests have been sacrificed to British commerce; and the following observations are essentially true and just: ‘The change’ (from protection to free trade) ‘has not been so advantageous to Ireland, a country in which there is but little trade or manufacturing industry, as it has been to England; although, as consumers, the Irish population may have gained in some cases by the abolition of the duties on foodstuffs, yet, on the other hand, as producers, chiefly dependent on agriculture, they have lost in a far greater degree by the cheap prices in the British markets, produced, in part at least, by the free and untaxed supply of foreign corn, live stock, dead meat, butter, cheese, eggs, and other articles of food.... It may even perhaps be said that just as Ireland suffered in the last century from the protective and exclusive commercial policy of Great Britain, so she has been at a disadvantage in this century from the adoption of an almost unqualified free trade policy for the United Kingdom.’[169]
Many attempts, I have said, have been made to answer the conclusive Report of the Childers Commission, to carp at its proceedings, to challenge its statements, to deny that Ireland has been largely overtaxed; but, with scarcely an exception, they have been grotesque failures. I need hardly notice an audacious sally, which has been turned to account in the House of Commons, and has split the ears of the groundlings in different parts of England. England, the argument runs, has been too kind to Ireland; Ireland pays no land tax and sundry other duties; in other respects she is equally taxed with Great Britain; she has not even a semblance of a real complaint; and—exactly in the manner of Swift’s satire—‘let her hold her tongue, or it may be the worse for her.’ Ireland, no doubt, ‘assimilated as she has been in finance,’ is free from some charges imposed on England; she has still ‘exemptions and abatements’ which, to some extent, preserve her rights under the Treaty of Union, and show that she is still financially a distinct country, as has been recognised by every leading British statesman, from the day of Pitt to the day of Mr. Gladstone. But the English land tax, properly speaking, is not a tax at all; it is a rent-charge for centuries payable by the land; at all events, the Irish Crown and quit rents may be set off against it; and, as to the other taxes referred to, the cost of collection in Ireland would exceed the returns; it would be a case of in Thesauro nihil, as in Plantagenet times. Another argument, of which the late Mr. Lowe was the author, is more plausible, and has done better service; but it is not the less shallow and false sophistry, when brought to the test. Taxation, it is said, falls on populations only; it is sheer nonsense to say that it falls on countries; it is not levied from Great Britain and Ireland; it is levied from the inhabitants within their borders. But the Englishman, the Scotsman, and the Irishman are equally taxed; the Irishman, indeed, has a small advantage; equality of taxation is the rule in this matter; and obviously equality is the same thing as equity. An English landlord in Kent, a Scotch landlord in Perthshire, an Irish landlord in Kildare, pay the same income tax on the same rentals; so does a merchant in London, a merchant in Edinburgh, a merchant in Belfast, on the same profits; and the same principle extends to all other classes. A farmer in Surrey, a crofter in Argyleshire, a shopkeeper in Galway, pay exactly the same tax on a gallon of rum, a gallon of whiskey, a hogshead of beer; the charge is the same for each commodity in the three households. This Irish grievance, therefore, is a mere delusion; it is a sickly phantom that vanishes in the light of the day.
That taxation falls on populations and not on areas of land is a truism really never disputed; the use of the word ‘countries,’ in this sense, is a mere popular phrase. This argument keeps out of sight the fact that equal taxes, however equally imposed, are much heavier in the case of a poor than of a rich community; but, waiving this objection, it is a sheer fallacy. If two populations had exactly the same tastes, used the same commodities in the same proportions, and were in the possession of the same resources; equality of taxation, if equally applied, would probably be essentially just. But if two populations have different tastes, if they differ in the use of even the same commodities, and if their resources are very different, and especially if equal taxation be not equally applied, this apparent equality, far from being equity, may become plain, nay, very grave iniquity. This may be made intelligible, at a glance, by the consideration of a few instances easily conceived. Impose an equal tax on coals in England and Ireland: would the charge fall equally on Englishmen in a land of coal and on Irishmen in a land of peat mosses? Tax Londoners and Parisians at the same rate on coffee: would the Londoner, who drinks comparatively little coffee, be as heavily mulcted as the Parisian, who drinks a great deal? Or suppose that light taxes were laid on articles that suit Englishmen, and enter into the consumption of the millions of England, and that heavy taxes were laid on articles that suit Irishmen, and are consumed by the Irish millions: would not this system favour Englishmen, and injure Irishmen, though the taxes on all these articles were the same in both countries? Examples by the hundred might be brought forward; these suffice to prove that equality of taxation, as between communities, differing from each other in the conditions and circumstances of life, and notably if the incidence of this taxation is not the same, may be made to effect the grossest injustice. And this financial wrong has been done, to a very great extent, if we compare the taxation of Great Britain and Ireland. The consumption of tea and tobacco by the head is nearly the same in both countries; the taxes on these commodities are the same; admit that this is equitable in a certain sense, though the impost is relatively more burdensome on the poor community. The consumption of spirits by the head, also, is much the same for the Three Kingdoms; the taxation is precisely the same; this, for the sake of argument, I will call justice. But the consumption of beer by the head in Great Britain is about double what it is in Ireland; probably ten Englishmen drink beer compared to one Irishman; whiskey is the ordinary spirituous drink of Irishmen. Now, the taxes on beer and on whiskey are the same in Great Britain and Ireland; but the tax on beer, measured by the alcoholic standard, is about six times lower than the tax on whiskey;[170] beer, therefore, compared with whiskey is greatly undertaxed; whiskey compared with beer is greatly overtaxed; the ordinary drink of Englishmen is treated differently from the ordinary drink of Irishmen, one being encouraged, the other discouraged; though the taxes on each commodity may be everywhere the same, the equality of taxation manifestly results in wrong. The difference amounts to a very large sum; it is one of the causes that Ireland is overtaxed.[171]
Equality of taxation may, therefore, be not equity; it may, as I have said, be sheer iniquity; and this is emphatically the case with respect to Ireland. This system is productive of gross injustice as regards what may be deemed the popular Irish drink; but arguments to support it have not been wanting; they have been complacently gulped down at several public meetings, it is unnecessary to add within the borders of England. The ‘mere Irish,’ it is said, have shocking bad tastes; let them take beer instead of whiskey and they can have no grievance; besides, whiskey is a nasty and unwholesome thing; it is in mercy to them that it is excessively taxed. Is it possible that people who utter this stuff do not see that sumptuary legislation of extreme harshness, nay, persecution of the worst kind, may be justified on the same class of premises? Suppose that Napoleon, in the plenitude of his power, had declared that the Parisians did not know what was good for them, and had heavily taxed their coffee to make them drink tea, even Austerlitz would not have saved the Empire. Marie Antoinette actually made an attempt to banish from her Court the velvets and silks of Lyons, and to make it adopt the cambrics and muslins of Belgium; she would have been too glad to see the first taxed and the second duty free, for she thought the French taste for heavy and gorgeous apparel bad; she only aroused the indignation of Versailles. Or say that the priests of the Jove of the Capitol had argued in this way: ‘Really these detestable Christians are fools for worshipping a crucified Jew; they have only to bow down to Cæsar to escape the lions; otherwise they have themselves alone to blame.’ Nay, coming nearer home, might not a holy prelate of the Irish Established Church in the eighteenth century have reconciled the penal code to his conscience, by whispering to himself that the deluded Papists had but to give up their vain superstitions, and to conform to the pure well of faith that had its source in the Castle, and that then they would be no longer outlaws; but let them take the consequences if they were blind to their best interests on earth and in heaven. In fact, any act of despotism on the part of the State might be vindicated on these very laudable principles; but on this matter of the taxation of Irish whiskey I shall confine myself to a single remark. Reverse the cases of England and Ireland with respect to the imposts on beer and on whiskey; tax beer very heavily and whiskey very lightly; and what would Englishmen say of an argument that has been thought good enough for Irishmen; how long would a Government exist that would try to carry out such a policy? In truth, this reasoning, if it can be so called, is the worst kind of sophistry: the frank brutality of the Roman proconsul, who told the population of a subject province that they must endure their burdens as they would endure the rain and the tempest, is less censurable, to my mind at least, than this compound of absurd and offensive insolence.
Another argument, really of no greater value, has had many supporters in the House of Commons. True it is, it is admitted, that, compared with Great Britain, Ireland has been hardly treated in finance; but this is because she is a poor country, and a poor country must suffer from taxation, fair as it may be, more than a wealthy country. But the same inequality is seen in England: Dorset and Wiltshire are more heavily burdened than Yorkshire and Lancashire, yet Dorset and Wiltshire make no complaints as Ireland does. This argument, however, ignores history, and sets the Treaty of Union at nought; Dorset and Wiltshire are mere fractions of England; Ireland has always been financially a distinct country, entitled to separate financial rights; and this has been recognised by the ablest British statesmen, notably, of late years, by Mr. Goschen, and by Mr. Gladstone. This reasoning, in a word, assumes that Ireland is merely an aggregate of British counties; but this has never been her true financial position; it is easy to sneer at the phrase ‘separate entity’ by which she has been called, that is, a land, financially, apart from Great Britain, but sneers cannot get the better of facts. These statements of distinguished English experts are unquestionable in view of the record of history. Lord Farrer has remarked: ‘It is abundantly clear that of the two conflicting theories—viz. the one which regards Great Britain and Ireland as one country for the purpose of taxation and expenditure, and the other which regards Great Britain and Ireland as separate partners—the second is the one upon which our instructions are founded; the one which has the greatest support in history, and the one upon which all parties in Parliament have recently acted.’[172] And Mr. Childers completely concurs: ‘If apart from the reference, it is asked why a distinction should be taken between Great Britain and Ireland any more than between Kent and Yorkshire, the answer is that Ireland entered into a partnership with Great Britain under a formal Treaty of Union, which did, to a certain extent, by the recognition of the claim of Ireland to abatements and exemptions, if circumstances should require, maintain the position of Ireland as entitled to separate treatment as a whole, so far as relates to taxation. It must also be recollected that, as a matter of fact, Ireland has, at all times since the Union, in various degrees received such separate treatment. Ireland, therefore, cannot be regarded as merely a group of counties of the United Kingdom.’[173]
Two other arguments may be ascribed to the ingenuity, if this is the true word, of the Treasury; but the first rests on a gross misrepresentation of fact, the other upon a false theory; both, with a slight reservation, may be dismissed as hopeless. Ireland, it is said, may possibly be overtaxed—admit this for the sake of argument—but she has had more than her fair share of loans from the State; a considerable part of these has been freely remitted; this has not been the case in England and Scotland; a large counterclaim, therefore, may be made against her. ‘Out of a total sum of about one hundred and nineteen millions and a half advanced in the United Kingdom, a little over fifty-two millions, or 43.7 per cent., has been advanced to Ireland, and of this, so large a proportion as one-fifth, or over ten millions, had to be remitted, or treated as a free grant, whilst only one fifty-eighth part of the advances made to Great Britain were so treated.’[174] So far as these loans have been advances for the real good of Ireland, for example, for the promotion of reproductive works-these may fairly be taken into account; but millions have been misapplied and wasted or spent in the unproductive relief of distress;[175] these sums probably are greater than the excess made out by the Treasury. As regards the remission of the £10,000,000, the assertion relied on is simply deceptive. Not less than £4,000,000 of this sum represent the fund the extinction of which was the consideration of putting the income tax on Ireland by Mr. Gladstone; and, as the charge of that tax has been since more than £23,000,000, it savours of impudence to call this a remission; it was writing off a doubtful debt to justify a new and portentous burden. The residue of the £10,000,000 is composed of advances that have been misspent or spent on purposes really not Irish; these were not remitted in the proper acceptation of the word. ‘The remaining portion of the ten millions of alleged remissions of loans consists mainly of remissions of the repayment of expenditure by the Board of Works, where it was shown that such expenditure had been wasteful, and of advances to the clergy and laity of the Established Church of Ireland, which advances Parliament, by legislation, deprived them of the ability of repaying. Altogether it would appear, from Sir Edward Hamilton’s evidence, that in reality only about one million out of the ten corresponded in their character to the advances made to Great Britain, and that consequently the proportion of real remissions of loans to Ireland did not differ very materially from that of the proportion of the remission in Great Britain.’