GREAT BRITAIN. 178 GREAT BRITAIN. The greatest per cent, of increase in any single expenditure item was that incurred for elemen- tary education. After the item of the army and that of the navj-, the service of the national debt (see table) is at present (1903) the largest item of the annual expenditure. As a result of the change in the taritl' policy of the country, the customs duties are relatively of much less im- portance than they were in the middle of the ninetecntli century, although they have almost held their own absolutely. The collections from the excise duties, on the other hand, have about doubled during the same period. The death du- ties and the income tax have latterly become very important sources of revenue. The British budget is characterized by sim- plicity, and by its attempt to adjust the burden imposed in such a manner as will make it least felt, i.e. in accordance with the ability of peoj)le to pay. The income tax was first resorted to in 1798 as a special means of raising revenue for war purposes. From 1815 to 1842 it was abolished, but was revived at the latter date in consequence of the reduction of the corn taxes. This tax now meets with general approval, and has become a permanent feature in the national budget. Incomes under £100 are exempt from the operation of the tax. and the moderate in- comes, or those below £TOO, are favored by abate- ments. The income tax is made to fluctuate more or less as the annual exigencies of the budget may demand. The income-tax rate has gradually increased from 2d. per pound in 1874, until in 1901-02 it stood at Is. 2d. per pound. Like the income tax, the death rates operate to favor the masses. The most important fiscal change made in the last quarter of the nineteenth century was the readjustment of the death rates in 1894 so as to increase the rates and the assessment of an export duty on coal. Tobacco and tea are the chief customs revenue producers, yielding respectively in 1901 £12,838,- 578 and £6,264,515, other ta.xed articles being nun, brandy, and other spirits, wine, coffee, cur- rants, raisins, and cocoa. The principle of pro- tection is generally considered to have been wliolly abandoned in the Britisli revenue policy, but in fact the tariff is still in a limited w.ay highly protective, and is shaped expressly to aid British manufacturers. Thus a distinction is made between raw cocoa and the manufactured cocoa, roasted and unroasted coffee, manufactured and unmanufactured tobacco; and the distinction is sufficiently large to guarantee the importa- tion of the raw products, and render possible the prosperity of the home industries based upon them. In 1901 the import duty on un- manufactured tobacco was from 3.v. to 3s. 4d. per pound and on manufactured tobacco from 3s. lOrf. to 5s. Off. per pound. Raw coffee was taxed at 14.s. per hundredweight, while kiln- dried was taxed at 2d. per pound. The minimum tax on tea was 3s. ~d. and the maximum 4s. id. The British fiscal system applies uniformly to England and Wales, Scotland and Ireland, with the exception that Ireland is exempt from the land tax and the inhabited-house tax. It is inter- esting to note the different results realized from the application of a uniform policy to kingdoms so differently conditioned. It has been shown by Mr. J. W. Root that, omitting licenses (which scarcely benefit the Imperial exchequer), the proportion of the direct to the indirect taxes for the United Kingdom is as 46 to 54, whereas the proportion of direct to indirect taxes (1899) in the different kingdoms are as shown in the following table, together with the per capita value of the taxes: Direct tases Proportion direct to indirect Ind. taxes Dir. per head Ind. per head Total taxes Total per head £ 37..'i85,00O 4.050.000 1,950,000 48 to 52 39 to 61 27 to 63 £ 40.460.000 IU30;000 5,250.000 s. </. 19 8 IG 6 5 s. d. 25 6 30 IVa 2 f 78.045,000 10.480.000 7,200,000 S s. d. 2 5 2 Scotland 2 6 1V4 19 7 The Irish^ortion of the license duties is included in the direct taxation. and to extend their application to include all the estates probated, thus adding greatly to the returns w-hich this tax yields. The most impor- tant of this class of taxes are the estate duties and the legacy duties, which in 1901 were re- spectively £8,498.872 and £3,092.380. Since 1851 there has been a house tax taking the place of the old window tax assessed prior to that date. This tax is not levied upon property rented for less than £20 per year, thus exempting the houses of the working classes. In 1840, before the introduction of the free- trade policy (the swce])ing corn laws were passed in 1846. and the policy became fully operative about 1860). 1046 articles were taxed. In 1901 the number had been reduced to 23 articles. The articles now taxed are those not produced in the United Kingdom, or such as are considered as luxuries, the latest article in the categorj' of necessary products, sugar, having been placed upon the free list in 1874. The exigencies of the South African War, however, led to the re- imposition of a duty upon sugar, the raising of the duty upon tea, tobacco, spirits, and beer. It will be observed that the burden of the indirect taxes is relatively much heavier in Scot- land and Ireland than in England, Presuming that the direct tax is the better measure of the wealth of the country, the per capita wealth of England is mucli greater than that of the other two kingdoms, particularly Ireland, the contrast becoming prominent when shown as based upon returns of the income tax: Income tax Income tax per head £ 15,284,000 1,809,000 704,000 s, d. 9 g 8 6 3 2 The inference is, therefore, that the actual ap- plication of a uniform scheme of taxation in- flicts a severer burden upon Scotland, and espe- cially upon Ireland, than upon England. The local taxes are annually supplemented by appropriations from the Imperial revenues. The le'ying and collecting of the local rates are in
