he not? So the lawyer who may be making 10,000 pounds a
year is to pay nothing. If he takes 5,500L. a year and becomes a judge, he
pays 137 pounds 10 shillings. Yet his interest is still for life.

In all this there seems to me unfairness.

If the tax be imposed as it is proposed, it will be very difficult to
include afterwards the classes now exempted. It will be impossible to take
off the tax, and whenever a tax is unpopular, those upon whom it presses
will say, 'Take it off. It is only adding 1/4 or 1/2 per cent. to the
income tax.'

A real property tax is the fairest of all taxes--but an income tax is the
most unfair even when it affects all income; but when it affects the income
of some who have a life interest, and not the income of others in the same
situation, it is most unfair indeed.

It is quite erroneous to suppose that those who pay an income tax are the
only persons who suffer from it. The reduction of establishments, the
diminished consumption, the increased economy in every article of
expenditure on the part of those affected by it have necessarily the effect
of reducing the wages of labour. The labourer may buy some things cheaper,
but he has less wherewith to buy.

_Sunday, March 14._

Saw Hardinge at two. Told him how we stood as to the question of taxation.
He said he thought the income tax would be popular, but agreed with me in
thinking it should be established on strictly just principles.

Cabinet at three. Goulburn read a new statement showing the surplus this
year, if we reduced beer and leather, and next year too. The surplus this
year is about 2 millions. Next year about 1,500,000L.

The income tax reaches the funds, and the Irish, and the parsimonious, and
the rich--so far it is good, but it likewise reaches the man of 100L a
year. It tends to diminution of establishments, to diminished demand for
labour. To create an alteration in demand generally.

It was proposed to exempt professions and trades. This was unjust, and it
would have led to an entire separation and hostility between the landed
proprietors and the united body of labourers and manufacturers.

These last would have joined on all occasions in urging a further and still
a further increase of income tax, and would never have consented to a tax
on consumption. The income tax would finally absorb all other taxes.

Another great objection to the income tax now is that it would have the
effect of perilling the reduction of