is doubtless thought that the large income yielded by the interest on the national debt is a safe and easy subject of taxation; Italy indeed raises 20 per cent. income tax on its debt interest. But this tax is purely nominal, as it is discounted in the price of stock, and such a government is merely paying with the left hand what it takes with the right. The case is seen clearly in Italian stock which stands at 20 per cent. lower value than it otherwise would; that is to say, that Italy pays say £4 for the loan of £80 now, instead of for the loan of £100 which it would receive if this tax was not imposed. The same is equally true of the tax as applied to government salaries; it cannot be evaded, and therefore it is merely a diminution of the salary, or a depreciation of the quality of men obtained for the nominal salary. A government cannot tax its own payments by any financial jugglery. Of course a government can cheat like a private person; promise a certain payment, and then break its word, and pay less by a tax. But that is only a transient profit raised by the sale of its character, and is not a permanent bargain. Another effect of income tax will be seen if the proposed higher grading of incomes is carried out. The same changes that we have traced owing to the death duties will be produced by the life duties. Property will be sub-divided wherever possible. Every child will have a trust created for its benefit, every member of a family will have a separate income, every large estate will be nominally the property of a group of independent persons—a family club. This will tend, like the death duties, toward equal shares, instead of the parent hive system of primogeniture; and it likewise marks the end of educated colonising. The effect of this may be good for family life, but it will be disastrous commercially. There will no longer be the large capitalists who can take the risks of great enterprises. To raise a large floating capital for great undertakings will require the co-operation of so many small capitalists, that it will not be worth while for any one investor to give time to the affair. The lack of personal concern and interest, and the cost of dealing with widely collected capital, will all be a detriment to enterprises of large extent.