But the most disastrous as well as immoral kind of taxation will be that proposed as additional upon all permanent investments, under the guise of "unearned income." It is a fatally easy screw for a government to put on; but the effect of it will be to penalise all British manufacture in competition with foreign productions. All that we have noticed about the effect of a 5 per cent. tax will apply far more rapidly and decisively if a 10 per cent. tax should be put on. Shippers would sail under another flag and transfer their offices of registration; manufacturers would pass to a tax-free country; and a larger proportion of persons living on fixed income would spend it abroad. Beside the material disadvantages of such high taxation on enterprise, it would be a grave moral detriment. It is too often forgotten that in taxation the government wields one of the greatest means of moral education. What does it say now by its taxation? Suppose a man to have saved £100, and to consider whether he will spend it on unremunerative pleasures, or on useful public works. The government says, "If you will spend your money on waste and luxury, paying for useless and monstrous rooms, making men stand idle in your hall, or decorate your extravagant food; if you will make women waste their eyes and lives on a fresh absurdity of fashion, or sell their souls; or if you will pay boys to become ne'er-do-weels on golf-links—in short if you will do as much mischief as possible, we will take 5 per cent. of your money. But if you spend it on benefiting the world, improving cultivation, building railways, opening the waste places and making them blossom, we will take 18 per cent., and leave you only £82 out of your £100." That is to say 5 per cent. on the original earning of the capital, 5 per cent. tax on investment income, and 10 per cent. on death duties, as estimated on large capital by the Income Tax Commission, 1906. And if the proposed higher taxing of so-called "unearned income" were carried out, this government claim would rise to 23 per cent. or even higher. In all reason, after money when earned has paid its tax of 5 per cent. it should be free of all further claims, at least if employed for public utility, and there should be no tax on dividends whatever, nor any death duties on savings; all such taxation falls eventually on the capital of the useful undertakings, and directly cripples the industry of the country. The only way to escape the deadly effects of income tax upon home manufactures and produce would be to lay a countervailing duty on all imports, and a bounty on all exports. Then, and only then, would the manufacturer or farmer here be on exactly the same footing as one abroad. Then, and only then, would free trade be really carried out. So long as taxes fall on home production or home capital, which do not fall similarly abroad, so long free trade cannot exist.