led to the
adoption of the device of a sinking fund, and in this case Pitt's usual
sagacity seems to have failed him. The influence of R. Price's theory
induced the policy of assigning special sums for debt reduction, without
regard to the fundamental condition of maintaining a real surplus.
The revolutionary and Napoleonic wars mark an important stage in English
finance. The national resources were strained to the utmost, and the
"whip and spur" of taxation was used on all classes of the community. In
the earlier years of the struggle the expedient of borrowing enabled the
government to avoid the more oppressive forms of charge; but as time
went on every possible expedient was brought into play. One class of
taxes had been organized during peace--the "assessed taxes" on houses,
carriages, servants; horses, plate, &c. These duties were raised by
several steps of 10% each until, in 1798, their total charge was
increased threefold (for richer persons four- or fivefold) under the
plan of a "triple assessment." The comparative failure of this scheme
(which did not bring in the estimated yield of L4,500,000) prepared the
way for the most important development of the tax system--the
introduction of the income-tax in 1798. Though a development of the
triple assessment, the income-tax was also connected with the permanent
settlement of the land tax as a redeemable charge. It is possible to
trace the progress of direct taxation from the scutage of Norman days
through "the tenth and fifteenth," the Tudor "subsidies," the
Commonwealth "monthly assessments," and the 18th century land tax, to
the income-tax as applied by Pitt, and, after an interval of disuse,
revived by Peel (1842). The immediate yield of the income-tax was rather
less than was expected (L6,000,000 out of L7,500,000); but by alteration
of the mode of assessment from that of a general declaration to returns
under the several schedules, the tax became, first at 5%, afterwards at
10%, the most valuable part of the revenue. In 1815 it contributed 22%
of the total receipts (i.e. L14,600,000 out of L67,000,000). If employed
at the beginning of the war, it would probably have obviated most of the
financial difficulties of the government. The window tax, which
continued all through the 18th century, had been supplemented in the
American War by a tax on inhabited houses (one of Adam Smith's many
suggestions), a group to which the assessment taxes were naturally
joined. Du
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