The Formula of the great unknown stands thus:—
·0001 (x - m)² = The amount which the state deals with in all incomes above £100 a year.8
Here x = the income. m = £1,000.
In working out this Formula, the Rule may be stated as follows:—
1. From the number of pounds of income (x) deduct 1,000.
2. Multiply the remainder into itself, i.e., square it.
3. Divide the product by 10,000.
The result will give—
(i) The amount paid by the State to the owners of income under £1,000 a year.
(ii) The amount paid to the State by owners of income above £1,000 a year.
Examples:—
(a) Income of £200 a year; i.e., x = 200.
200 - 1,000 = -800.
-800 squared; [i.e.,-800 multiplied by -800] = 640,000.
Result of 640,000/10,000 = 64.
Consolation income to all possessors of £200 a year ... £64.
(b) Income of £500 a year; i.e., x = 500.
500 - 1,000 = -500.
-500 squared; [i.e.,-500 multiplied by -500] = 250,000.
Result of 250,000/10,000 = 25.
Consolation income to all possessors of £500 a year ... £25.
(c) Income of £900 a year; i.e., x = 900.
900 - 1,000 = -100.
-100 squared; [i.e., -100 multiplied by -100] = 10,000.
Result of 10,000/10,000 = 1.
Consolation income to all possessors of £900 a year ... £1.
(d) Income of £1,000 a year; i.e., x = 1,000.
1,000 - 1,000 = 0.
0 multiplied by 0 = 0.
Consolation income to all possessors of £1,000 a year ... 0.
(e) Income of £2,000 a year; i.e., x = 2,000.
2,000 - 1,000 = 1,000.
1,000 squared [i.e., 1,000 multiplied by 1,000] = 1,000,000.
Result of 1,000,000/10,000 = 100.
Income tax paid by all possessors of £2,000 a year ... £100.
Reduced to a tabulated form it becomes evident that the consolation paid by the State to all owners of income below £1,000 will decrease as the incomes increase; until, when a prosperous gentleman attains to £1,000 a year, the consolation will disappear, and instead of receiving anything he will begin to pay tax upon his income, such tax becoming greater and greater as his income grows—until, if he be so rash as to attain an income of £11,000 a year, he will pay £10,000 a year income tax, and if he does not take this warning and rises to £12,000 a year the State will not only claim all his £12,000 but demand £100 a year more.
That is to say,
A.
Incomes of |
£200 | will receive from the State the Consolation of | £64 |
300 | ””” | 49 |
400 | ””” | 36 |
500 | ””” | 25 |
600 | ””” | 16 |
700 | ””” | 9 |
800 | ””” | 4 |
900 | ””” | 1 |
1,000 | ””” | Nil |
B.
Incomes of |
£2,000 | will pay to the State a Tax of | £100 |
3,000 | ””” | 400 |
4,000 | ””” | 900 |
5,000 | ””” | 1,600 |
6,000 | ””” | 2,500 |
7,000 | ””” | 3,600 |
8,000 | ””” | 4,900 |
9,000 | ””” | 6,400 |
10,000 | ””” | 8,100 |
11,000 | ””” | 10,000 |
12,000 | ””” | 12,100 |
* * * * *
The richest man in the community will thus be he who has an income of £6,000 a year; on this he will have to pay £2,500 income tax, leaving him with an available balance of £3,500 a year to spend! Now was not this anonymous Frenchman a man of real genius? And is he not a signal example of the truth that
“The world knows nothing of its greatest men”?
* * * * *
The assumptions on which this lofty attempt to reconstruct the social fabric are based are obvious. They are these:—
I.That the earners of daily or weekly wages are not owners of property, nor can they be classed among the possessors of a secure annual income. De minimis non curat lex. II.That it is to the advantage of the community to increase the number of small capitalists, and to assist them with State aid—though in a diminishing ratio as their property or incomes increase, and they need less and less encouragement.
III.That it is equally for the advantage of the community to decrease the number of large capitalists and to discourage the accumulation of wealth in few hands; and therefore it is necessary to fix a limit of wealth which men shall not be permitted to exceed.