ABSTRACT
The Income Tax was not imposed, therefore, because it was considered a better tax than those on expenditure, or in order to remedy any inequality in the existing distribution of taxation. The distributive characteristics of the Income Tax were three. First, the poor—that is the great body of the people—were exempt. Second, it was not because the poor already paid enough taxation otherwise that they were exempted from the Income Tax. Third, the distributive standard adopted for the Income Tax was proportionality to income, with certain minor modifications. The nineteenth century opens with the doctrine that everyone should pay taxation, overruled, as regards the poor, on compassionate or trading grounds. It includes the rough principle that taxation should be distributed in proportion to income, and the theory that proportion to income was achieved by the third species of taxes just mentioned, and without the conception of a compensatory system of taxation.
