“And then comes the question whether there may not be a better tax still. An income tax is immeasurably better than a system of indirect taxation; but there may be means of avoiding the inequalities which remain even under the improved system. If you once begin to graduate your income tax according to the value of the tenure of incomes——” “Why, it is hard that the physician, whose large income expires on his becoming infirm, should pay more than the fundholder or landowner, whose income is permanently yielded to himself and his children.” “And then, from the fundholders, you must except those who hold terminable annuities. Five per cent. is a much larger payment from a man whose income is to terminate in ten or twenty years, than five per cent. would be from the owner of land. And again; if you lay a tax of five per cent. on the labourers’ wages, the tax falls upon the capital; for the wages must rise just so much as the tax amounts to. It follows of course that the receiver of rent ought to pay a higher per centage, because the capitalist pays for himself and his labourers too. Now, if we once begin making these modifications, (which justice requires,) it seems the most direct and efficacious method to have a property tax; _i. e._, to tax those incomes which are derived from invested capital. Ah! I see you shake your heads; I see what you would say about the difficulty of defining what is property; and the hardship in a few cases,—as in those of small annuitants; and the tendency,—the very slight,—the practically imperceptible tendency to check accumulation. We agreed before that all taxes are bad; that there are some difficulties attending all.” “But do not you allow these evils, sir?”