The Evening Star FRIDAY, AUGUST 1, 1873.

Evening Star, Issue 3260, 1 August 1873, Page 2

The Evening Star FRIDAY, AUGUST 1, 1873.

No scheme that can he devised for collecting Customs Revenue can be satisfactory to all classes. No matter how it is arranged, its incidence is unequal. If the revenue is collected in one form it favors one class of the community ; if it be changed, another : in all cases a tax upon articles of consumption lies most heavily upon those whose incomes are the smallest. Nor do we know any means of avoiding this evil, for men can more easily afford to contribute to the revenue out of their abundance than from their necessities. In order to meet this well-known evil, wherever taxation has been direct instead of indirect, various schemes have been proposed. At Home, when the Income-tax was adopted by Sir Robert Peel, no contribution was expected from those whose yearly income was below a stated value; as it was considered they were already paying more than their full proportion of indirect taxation; and many attempts were afterwards made to introduce a graduated scale by which men might be compelled to bear their fair proportion of the national burden. The rules of taxation laid down by leading political economists are, that the tax that each subject of a State is bound to pay ought to be certain, not arbitrary ; that it should be payable at the time and in the manner most convenient to him; and that it “ought to be so contrived as both to take out and to keep out of the pockets of the people as little as possible over and above what it brings into the public Treasury.” It is on the second of these principles that Customs duties are defended. Strictly analysed, it will be found that they do not fulfil the first condition, because the contribution towards the revenue is dependent upon individual consumption of specific articles, and of two men of equal incomes one may not consume the same amount of duty - paying goods as another. As a rule he pays most who has the greatest number of mouths to provide for. This is a strong objection to indirect taxation, and, ultimately, when men learn to reason correctly, and to act towards each other upon principle, the vicious practice of collecting revenue from Customs duties will be done away with. But its evils are not merely confined to inequality of incidence on the taxpayers. They operate detrimentally upon commerce itself; they interfere with its freedom, and introduce disproportionate prices compared with the intrinsic value of specific articles. sfet, as a rule, when once a rate of duty has been determined upon, it is unwise to meddle with it, without good reason. Although trade accommodates itself to inequalities witli wonderful facility, any sudden change is sure to be immediately attended with wide-spread inconvenience and individual loss. On this ground it seems a doubtful policy to abolish the system of collecting duties on certain classes of goods by measurement, and of substituting an ad valorem system. Abstractedly considered it is the more equitable plan. The measurement system is essentially one which tends to create a disproportionate price between low and highpriced goods ; for the former as a rule are of greater bulk than the latter, and consequently are chai’ged with more than their fair amount of duty. Assuming, therefore, that the coarser and lower priced goods are consumed chiefly by the less wealthy, they are more heavily taxed thaxr their wealthier fellow-colonists. But there are some objections to the ad valorem plan that ought not to be overlooked. It is one that holds out peculiar temptations to fraud. Some years ago it was discovered in South Australia, that even reputable merchants in both Great Britain and that Colony conspired to defraud the revenue. Tbey contrived between them a system ,of “ salting invoices.” Our non-commercial readers will scarcely comprehend this bit of slang, and we hope will have too good an opinion of our merchant princes to believe our statement—-which, nevertheless, is true. Two sets of invoices were prepared —one for presentation to the Custom-house, on wlueii to make a declaration of value ; and the other representing the sale prices at which the goods were to be paid for, Wo maul hardly tell our readers that the revenue invoice was very much less in amount than the sale price, and on discovery of the system of fraud —which was not confined to one or two linns merely—there was a strong feeling in favor of resorting to measurement duties. If an ad valorem system is ,honestly carried out, it is the fairest to all classes ; the chief inconvenience lies in the change from one plan to another. Even objectionable systems are preferable to frequentciianges in a tariff, for certainty is the soul of trade.