29 Albemarle St <1>
Dear Lord L.
I cannot help thinking, and expressing my humble opinion, that considering the very great disappointment which prevails throughout the country on the subject of the house & window tax <2>, and the malt tax: and considering also the great importance of making people satisfied with their Reformed Parliament, and of showing them that their great exertions to obtain Reform have not been absolutely fruitless, but that the performance of the new machine is in some degree correspondent to its promise, on these grounds I wish the Government would be prevailed upon to reconsider their financial measures – Those measures may be quite correct, financially speaking: but the moral effect of them upon a country already dissatisfied is too important not to deserve to be taken into consideration – And besides, this dissatisfaction, and partial alarm has of itself a tendency to diminish the revenue, while tranquillity and contentment has an undoubted tendency to increase it
For these reasons I cannot help thinking it would be true policy in the Government to consent to the repeal of the taxes in question, and to meet the deficiency for the present year, by a loan, since money could never be borrowed so cheaply as at present. This proceeding may appear at first sight to be contrary to maxims of Political Economy, but I do not think so, under our circumstances. I think the addition to our debt might be estimated as follows.
|Year||Sum required to be borrowed|
Annual interest on which at 3 per Cent would be £540,000
I think my estimate very moderate in supposing that of the 7 millions of money saved to the country by repealing these taxes only 2 millions would find its way into the Exchequer in other ways, by the increased consumption of taxable articles, leaving 5 millions deficient to be raised by loan the second year, & so on. The point upon which my argument reposes is that we have within us all the elements of prosperity, but are suffering under a temporary distress or embarrassment which may be likened to a disease in the human frame, requiring a temporary alleviation of the burdens on the sufferer, who may be well enough able to bear them again when his health returns.
The permanent addition to the Interest of the Debt would be about ½ a million, 28½ millions, perhaps, instead of 28 at present. But I contend that the 28½ would be less felt then, than the 28 are now, because if the principles I have stated are correct, they would be raised upon a more prosperous community in consequence of the greater consumption of taxable articles by them, and it is clear that the purpose of taxation is merely relative. If the country is really declining in wealth & general prosperity then my argument falls to the ground – But I think that 28½ millions, raised by taxes of which these obnoxious direct taxes form no part would be far less burdensome than the lesser sum of 28 as at present imposed.
Excuse for trespassing at such length upon your time & believe me
Yours most truly
H. Fox Talbot
1. WHFT lived at this London address, just down the street from the Royal Institution, for half of April and the whole of May, 1833.
2. The Window Tax was replaced in 1851 with a tax called House Duty.