Part II: Chapter V, 5

Second. For all articles taxed in bulk—by the barrel, hogshead, hundredweight, or ton—abolishing the duty cannot be divided finely enough to give full relief to the consumer buying by the pint or pound. The last duty imposed on strong beer and ale was three shillings a barrel; removing it would cut the price by only half a farthing a pint, too little to bring practical relief.

Since a large part of taxation is in this condition, we must look instead for taxes free of this difficulty, whose removal would offer direct, visible, and immediate relief.

First, the poor rates are a direct tax felt by every householder, who knows to the farthing how much he pays. The national total is not known for certain, but can be ascertained. Sir John Sinclair, in his History of the Revenue, gives it as L2,100,587. Much of that sum goes to litigation, which torments the poor instead of relieving them. But the expense to the parish is the same, whatever causes it.

In Birmingham the poor rates amount to fourteen thousand pounds a year. Large though this is, it is moderate in relation to the population. Birmingham is said to have seventy thousand people. At the ratio of seventy thousand people to fourteen thousand pounds in poor rates, the national poor rates, assuming England has seven million people, would be just one million four hundred thousand pounds. Birmingham's population, then, is most likely overstated. If the national total of poor rates is two millions, fourteen thousand pounds would correspond to fifty thousand people.

Whatever the precise figure, the rates are simply a consequence of excessive taxation: when taxes were very low, poor people could support themselves, and poor rates did not exist.*34 As things stand, a laborer with a wife and two or three children pays no less than seven to eight pounds a year in taxes. He does not realize it, for the taxes are concealed in the goods he buys, and he notices only their high prices. But because taxes take at least a fourth of his annual earnings, he cannot support a family, especially when he or one of them is ill.

The first step toward effective relief, then, would be to abolish poor rates altogether and instead remit taxes to the poor amounting to twice the current rates: four millions a year from surplus taxes. This would benefit the poor by two millions and householders by two millions. By itself, it would equal a reduction of one hundred and twenty millions in the National Debt, and thus the whole cost of the American War.

We must then consider the most effective way to distribute this remission of four millions.

It is plain that the poor generally consist of large families with children and elderly people past working age. Provide for these two groups, and the remedy will address nearly the whole problem. What remains will be incidental and largely within the reach of benefit clubs, which, though modest in origin, deserve a place among the finest modern institutions.

Suppose England has seven million people. If one fifth belong to the class of poor who need support, their number will be one million four hundred thousand. Of these, one hundred and forty thousand will be elderly poor, as I shall show later, and I will propose a separate provision for them.

That leaves one million two hundred and sixty thousand people: at five people per family, two hundred and fifty-two thousand families made poor by the cost of raising children and the weight of taxes.

The number of children under fourteen in these families will average about five for every two families. Some have two, others three; some have one, others four; some have none, others five. More than five under fourteen are rare, and after that age children can work as servants or apprentices.

Allowing five children under fourteen for every two families:

The number of children will be 630,000

The number of parents, if all were alive, would be 504,000

Clearly, if the children are provided for, the parents are thereby relieved, because the expense of raising children is the source of their poverty.

Having thus determined the greatest number reasonably supposed to need support because they have young families, I turn to the means of distributing relief:

Pay every poor family four pounds a year for every child under fourteen, as a remission from surplus taxes in place of poor rates; require parents to send those children to school to learn reading, writing, and basic arithmetic; and have the ministers of every denomination in each parish jointly certify to an office established for the purpose that this duty is being fulfilled. The cost will be:

For six hundred and thirty thousand children at four pounds a year each L2,520,000

This method will not only relieve the parents' poverty but banish ignorance from the rising generation. The number of poor will subsequently decline because education will increase their abilities. Many a talented young person apprenticed to a craft—a carpenter, joiner, millwright, shipwright, blacksmith, and so forth—is held back for life by the lack of a little elementary education in childhood.

I now turn to the elderly.

I divide age into two stages: first, approaching old age, beginning at fifty; second, old age itself, beginning at sixty.

At fifty, though a person's mind is at full strength and judgment better than ever before, the bodily powers needed for hard labor are declining. He cannot endure as much fatigue as in earlier years. He begins to earn less and can stand wind and weather less well; in more sheltered occupations requiring sharp eyesight, his vision rapidly fails, and he sees himself, like an old horse, beginning to be turned out.

At sixty, he should no longer have to work, at least from sheer necessity. It is painful to see people in old age work themselves to death for daily bread in countries called civilized.

To estimate how many people are over fifty, I have several times counted those I met in London's streets—men, women, and children—and generally found the average to be about one in sixteen or seventeen. If it is said that older people do not venture into the streets much, neither do infants; and many older children are in school or apprenticed in workshops. Using sixteen as the divisor, the total number in England aged fifty or above, both sexes, rich and poor, will be four hundred and twenty thousand.

From this total, those who will need provision include farmers, ordinary laborers, journeymen of every trade and their wives, sailors and discharged soldiers, worn-out servants of both sexes, and poor widows.

There will also be a considerable number of tradespeople of middling means who lived respectably earlier in life but lose business as age approaches and eventually fall into poverty.

Besides these, the revolutions of a wheel that no one can stop or control continually cast off people from every class connected with commerce and enterprise.

To allow for all such accidents and whatever else may befall, I estimate that one third of all older people—one hundred and forty thousand, as stated earlier, for whom I proposed separate provision—may at some time after fifty need or find it a comfort to receive more support than they can provide themselves. They should receive it not as a favor or an act of charity but as a right. If the number is larger, then despite all the show and pomp of government, society in England is in a deplorable state.

I take half of these one hundred and forty thousand—seventy thousand—to be aged fifty to under sixty, and the other half aged sixty and above. Having estimated the probable numbers of older people, I turn to the means of making their condition comfortable:

Pay each such person, from surplus taxes, six pounds a year from age fifty until age sixty, and ten pounds a year for life after sixty. The cost will be:

Seventy thousand persons at L6 a year L 420,000

Seventy thousand persons at L10 a year 700,000

L1,120,000

As I have said, this support is a right, not charity. Every person in England, male or female, pays an average of two pounds eight shillings and sixpence a year in taxes from the day of his (or her) birth; including collection costs, two pounds eleven shillings and sixpence. At fifty, then, that person has paid one hundred and twenty-eight pounds fifteen shillings, and at sixty, one hundred and fifty-four pounds ten shillings. Treating his (or her) personal taxes as a tontine, the money received after fifty is only a little more than the legal interest on the net amount paid. The balance comes from those whose circumstances do not require them to claim such support, while the capital in both cases pays for government. On this basis I have extended the probable claims to one third of the nation's older people.—Is it better that one hundred and forty thousand elderly people should live in comfort, or that a million a year of public money should be spent on a single individual, often someone utterly worthless or insignificant? Let reason and justice, honor and humanity, even hypocrisy, sycophancy, and Mr. Burke—let George, Louis, Leopold, Frederic, Catherine, Cornwallis, or Tippoo Saib—answer the question.*35

The sums thus remitted to the poor will be:

To two hundred and fifty-two thousand poor families, containing six hundred and thirty thousand children L2,520,000

To one hundred and forty thousand elderly persons 1,120,000

L3,640,000

Of the four millions, three hundred and sixty thousand pounds will remain; part may be applied as follows:

After providing for all the foregoing, there will still be families who, though not properly classed as poor, struggle to educate their children. In such circumstances, these children would fare worse than if their parents were actually poor. A nation under a well-ordered government should allow no one to remain uneducated. Only monarchical and aristocratic government needs ignorance to sustain it.

Suppose four hundred thousand children are in this position—a greater number than we ought to expect after the provisions already made. The method will be:

Allow ten shillings a year for schooling each of those children for six years, giving each six months of schooling per year, and half a crown a year for paper and spelling books.

The annual cost will be L250,000.*36

One hundred and ten thousand pounds will then remain.

However extensive the relief devised by the best organized government founded on the best principles, many smaller cases will remain; it is both sound policy and kindness for a nation to attend to them.

Giving twenty shillings immediately on the birth of a child to every woman who requests it—and none whose circumstances did not demand it would request it—could alleviate much immediate hardship.

England has about two hundred thousand births each year; if one fourth claim the payment:

The amount would be L50,000

And twenty shillings for each newly married couple claiming it in the same way. This would not exceed L20,000.

Also set aside twenty thousand pounds for the funerals of people who, having traveled in search of work, die far from their friends. If parishes are relieved of this expense, sick strangers will be treated better.

I shall finish this part of the subject with a plan suited to the special circumstances of a metropolis such as London.

Second. Many taxes are charged on large quantities, such as a barrel, a hogshead, a hundredweight, or a ton. If these taxes were abolished, the saving could not be divided up finely enough to give full relief to someone buying a pint or a pound. The last tax on strong beer and ale was three shillings per barrel. Removing it would reduce the price by only half a farthing per pint, too little to offer any practical relief.

Since this is true of many taxes, we must find others without this problem, where people would see and feel the benefit immediately.

First, poor-rates are a direct tax paid by every householder, who knows exactly how much he pays, down to the farthing. We do not know the precise nationwide total of poor-rates, but it could be found. Sir John Sinclair gives a figure of L2,100,587 in his History of the Revenue. Much of this money is spent on lawsuits that harass the poor instead of helping them. Whatever its cause, the cost to the parish is the same.

In Birmingham, poor-rates total fourteen thousand pounds a year. That is a large sum but modest for the size of the population. Birmingham is said to have seventy thousand people. If seventy thousand people pay fourteen thousand pounds in poor-rates, then, with England's population at seven million, the national total would be just one million four hundred thousand pounds. It is therefore very likely that Birmingham's population is overestimated. If the national total for poor-rates is two million, fourteen thousand pounds would be the share for fifty thousand people.

Whatever the true figure, these poor-rates are simply the result of excessive taxation. When taxes were very low, poor people could support themselves and there were no poor-rates.*34 Today, a working man with a wife and two or three children pays between seven and eight pounds a year in taxes at a minimum. He does not realize it because taxes are hidden in the prices of what he buys. He notices only that things are expensive. But taxes take at least a quarter of his yearly earnings. As a result, he cannot support a family, especially if he or anyone in it falls ill.

The first practical step toward relief, then, is to abolish poor-rates entirely. In their place, use surplus tax revenue to return to poor people twice the current amount of the poor-rates: four million pounds a year. Poor people would gain two million pounds and householders would gain two million. This measure alone would be equivalent to reducing the National Debt by one hundred and twenty million pounds, the full cost of the American War.

We must next decide the best way to distribute these four million pounds in tax relief.

Most poor people belong either to large families with children or to a group of older people who can no longer work. If we provide for both groups, we will address nearly the whole problem. The remaining cases will be occasional ones. Many of them can be handled by mutual-aid clubs, which, despite their modest origins, deserve a place among the best modern institutions.

Suppose England has seven million people. If one-fifth are poor people who need support, that makes one million four hundred thousand. Of these, one hundred and forty thousand are older people in poverty, as I will show later, and I will propose separate support for them.

That leaves one million two hundred and sixty thousand. At five people per family, this comes to two hundred and fifty-two thousand families made poor by the costs of raising children and the weight of taxes.

Across these families, there will be about five children under fourteen for every two families. Some have two and others three; some have one and others four; some have none and others five. More than five children under fourteen in one family is rare. After fourteen they can work as servants or become apprentices.

Allowing five children under fourteen for every two families,

The number of children will be 630,000

The number of parents, if all were alive, would be 504,000

Clearly, supporting the children will also relieve their parents. The cost of raising children is what makes these families poor.

I have now estimated the largest number likely to need support because they have young families. Here is how to provide and distribute that support:

Pay every poor family four pounds a year for each child under fourteen. The payment would come from surplus taxes, as a tax refund replacing poor-rates. Require parents to send these children to school to learn reading, writing, and basic arithmetic. Ministers of every denomination in each parish would jointly certify to an office established for this purpose that the children attend school. The cost would be:

For six hundred and thirty thousand children

at four pounds a year each L2,520,000

This approach would not only ease the parents' poverty. It would also end ignorance among the next generation. There would be fewer poor people in the future because education would improve their ability to earn a living. Many gifted young apprentices in trades such as carpentry, joinery, mill-building, shipbuilding, and blacksmithing are held back for their entire lives because they lacked a little basic education as boys.

I turn now to older people.

I divide aging into two stages. First comes the approach of old age, starting at fifty. Second comes old age itself, starting at sixty.

At fifty, a person's mind is still in full strength, and his judgment is better than ever before. But his physical ability to do hard work is declining. He cannot withstand as much fatigue as he could when younger. He begins to earn less and can endure wind and weather less easily. Jobs carried out indoors that demand good eyesight also become harder. Like an old horse, he sees himself starting to be put out to pasture.

At sixty, no one should have to work from necessity. It is painful to see older people in so-called civilized countries working themselves to death just to eat each day.

To estimate how many people are over fifty, I have several times counted the men, women, and children I met on London's streets. I generally found that about one in sixteen or seventeen were over fifty. Someone might say that older people are seldom out on the streets. But neither are infants, and many older children are at school or apprenticed in workshops. If one in sixteen people is fifty or older, England has four hundred and twenty thousand such people, women and men, rich and poor.

Those who need support out of that total include farmers, ordinary laborers, workers in every trade and their wives, sailors, discharged soldiers, former servants of both sexes who can no longer work, and poor widows.

There will also be quite a few shopkeepers and tradespeople of modest means. They may have lived comfortably in the first part of their lives, but as they age, they begin to lose business and eventually become poor.

Besides them, the unpredictable changes of commerce and risky ventures, which no one can stop or control, will continually leave people from every social group in need.

To cover all such setbacks, and whatever else may happen, I estimate how many people over fifty might at some point need or want more support than they can provide for themselves. They should receive it as a right, not as a favor or charity. I put the number at one-third of all older people, or one hundred and forty thousand. I mentioned this number earlier and proposed separate support for them. If the true number is higher, then, despite all the display and grandeur of government, England's society is in a terrible state.

I estimate that half of this one hundred and forty thousand, or seventy thousand, are fifty to fifty-nine. The other half are sixty or older. Having estimated these numbers, I now explain how to make their lives comfortable:

Pay each qualifying person six pounds a year from the surplus taxes from age fifty up to age sixty, and ten pounds a year for life after sixty. The cost would be:

Seventy thousand people, at L6 a year L 420,000

Seventy thousand people, at L10 a year 700,000

———-

L1,120,000

As I have said, this support is a right, not charity. From birth, every person in England, male or female, pays an average of two pounds eight shillings and sixpence a year in taxes. Including collection costs, each pays two pounds eleven shillings and sixpence. So by age fifty that person has paid one hundred and twenty-eight pounds fifteen shillings; by sixty, one hundred and fifty-four pounds ten shillings. Treat each person's tax payments as an investment in a shared lifetime-income fund. After fifty, what the person receives is only a little more than the legal interest on the net taxes that person has paid. The rest comes from people who do not need to claim this support. In both cases, the original tax payments also cover government expenses. That is why I estimate that one-third of the country's older people may claim this support. Which is better: making one hundred and forty thousand older people's lives comfortable, or spending a million pounds of public money each year on one person who is often worthless or unimportant? Let reason and justice answer; let honor and humanity answer. Let even hypocrisy, flattery, and Mr. Burke answer. Let George, Louis, Leopold, Frederic, Catherine, Cornwallis, or Tippoo Saib answer.*35

The total returned to poor people would be:

For two hundred and fifty-two thousand poor families,

with six hundred and thirty thousand children L2,520,000

For one hundred and forty thousand older people 1,120,000

—————

L3,640,000

That leaves three hundred and sixty thousand pounds out of the four million. Part of it could be used as follows:

Even after providing for all these cases, some families will struggle to educate their children, though they are not strictly poor. Those children would otherwise be worse off than children whose parents actually qualify as poor. A country with a well-run government should not let anyone grow up without an education. Only monarchy and aristocracy need ignorance to stay in power.

Suppose four hundred thousand children are in this position. That is more than we should expect after the help already proposed. Here is what we should do:

Give ten shillings a year toward schooling for each of these children for six years. This will pay for six months of school each year. Give another half a crown a year for paper and spelling books.

The yearly cost would be L250,000.*36

That leaves one hundred and ten thousand pounds.

Even the best-designed government with the best principles cannot prevent every small case of hardship, however much relief it provides. A nation should attend to these cases both as a wise policy and as an act of kindness.

Giving twenty shillings at the birth of a child to every woman who requests it could relieve much immediate hardship. Women who do not need it would not ask for it.

About two hundred thousand children are born each year in England. If one-fourth of the mothers claimed the payment,

The cost would be L50,000

Give twenty shillings as well to every newly married couple who claims it on the same terms. This would cost no more than L20,000.

Also set aside twenty thousand pounds to pay for funerals for people who travel for work and die far from their friends. If parishes no longer have to pay this expense, they will treat sick strangers better.

I will end this part with a plan designed for the particular needs of a large city such as London.