great country in the new world or the old
have the working people yet secured the double advantage of free trade
and free land together, by which I mean a commercial system and a land
system from which, so far as possible, all forms of monopoly have been
rigorously excluded. Sixty years ago our system of national taxation
was effectively reformed, and immense and undisputed advantages
accrued therefrom to all classes, the richest as well as the poorest.
The system of local taxation to-day is just as vicious and wasteful,
just as great an impediment to enterprise and progress, just as harsh
a burden upon the poor, as the thousand taxes and Corn Law sliding
scales of the "hungry 'forties." We are met in an hour of tremendous
opportunity. "You who shall liberate the land," said Mr. Cobden, "will
do more for your country than we have done in the liberation of its
commerce."

You can follow the same general principle of distinguishing between
earned and unearned increment through the Government's treatment of
the income-tax. There is all the difference in the world between the
income which a man makes from month to month or from year to year by
his continued exertion, which may stop at any moment, and will
certainly stop, if he is incapacitated, and the income which is
derived from the profits of accumulated capital, which is a continuing
income irrespective of the exertion of its owner. Nobody wants to
penalise or to stigmatise income derived from dividends, rent, or
interest; for accumulated capital, apart from monopoly, represents the
exercise of thrift and prudence, qualities which are only less
valuable to the community than actual service and labour. But the
great difference between the two classes of income remains. We are all
sensible of it, and we think that that great difference should be
recognised when the necessary burdens of the State have to be divided
and shared between all classes.

The application of this principle of differentiation of income-tax has
enabled the present Government sensibly to lighten the burden of the
great majority of income-tax payers. Under the late Conservative
Government about 1,100,000 income-tax payers paid income-tax at the
statutory rate of a shilling in the pound. Mr. Asquith, the Prime
Minister, when Chancellor of the Exchequer, reduced the income-tax in
respect of earned incomes under L2,000 a year from a shilling to
ninepence, and it is calculated that 750,000 income-tax pay