¹ Mill, J. S., ‘Remarks on Bentham's Philosophy’, Essays on Ethics, Religion and Society, ed. Robson, John M., Toronto, 1969Google Scholar, Collected Works of John Stuart Mill (henceforth CW), x. 18.

² Bentham, , Manual of Political Economy, Jeremy Bentham's Economic Writings (henceforth EW), ed. Stark, W., 3 vols., London, 1952–1954, i. 257Google Scholar.

³ Bentham, , Institute of Political Economy, EW, iii. 321Google Scholar.

⁴ Bentham, , General View of a Complete Code of Laws, The Works of Jeremy Bentham, ed. Bowring, John, 11 vols., Edinburgh, 1838–1843, iii. 204Google Scholar. A similar statement is seen in Bentham's manuscript collected in the Dumont paper, box LI (EW, iii. 537).

⁵ Kelly, P. J., ‘Utilitarianism and Distributive Justice: The Civil Law and the Foundations of Bentham's Economic Thought’, Utilitas, i (1989)Google Scholar, and ‘Utilitarian Strategies in Bentham and John Stuart Mill’, Utilitas, ii (1990)Google Scholar.

⁶ Kelly indicates that Bentham's escheat law was ‘based on an attempt to eradicate the need for direct taxation as a means of government supply, on the grounds that the increasing need to resort to taxation was undermining those expectations based on the disposal of property, and this ultimately reduced economic activity and social well-being’ (Kelly, , ‘Utilitarianism’, 80)Google Scholar. For his interpretation that Bentham regarded expectation as a major source of utility, see ibid., 71–4 and ‘Utilitarian Strategies’, 252.

⁷ Bentham, , Supply without Burden, EW, i. 297–8Google Scholar.

⁸ Ibid., p. 324.

⁹ Ibid., p. 359.

¹⁰ Ibid., p. 300.

¹¹ Bentham, , Principles of the Civil Code, Bowring, i. 305Google Scholar.

¹² Supply without Burden, EW, i. 356–67.

¹³ ‘Had this resource happened to have presented itself under a favourable aspect to the Neckers or the Calonnes, and had they succeeded in recommending it to the acquiescence of the nation, the French Revolution, and the flood of miseries with which the earth has been deluged by it, would have been prevented’ (ibid., p. 326). Thus, Bentham thought that his proposal could prevent a revolution.

¹⁴ Ibid., p. 284.

¹⁵ Bentham, however, thought of the law of primogeniture as behind the times and as unnecessary for the support of the aristocracy (ibid., p. 330).

¹⁶ However, in 1821, Bentham indicated a different view with respect to the relationship between the escheat law and equality. See ‘Legislator of the World’: Writings on Codification, Law, and Education, ed. Schofleld, P. and Harris, J., Oxford, 1998Google Scholar(The Collected Works of Jeremy Bentham), pp. 199–203.

¹⁷ Bentham, , Proposal for a Mode of Taxation, EW, i. 381Google Scholar.

¹⁸ Ibid., p. 385.

¹⁹ Ibid., p. 386.

²⁰ Ibid., p. 388.

²¹ Ibid., p. 395.

²² Bentham, , Tax with Monopoly, EW, i. 373Google Scholar.

²³ As with the case of the escheat law, Bentham's proposal for a tax on bankers' and stock dealers' profits with exclusive privilege was not adopted by Long.

²⁴ Bowring, iii. 204.

²⁵ EW, i. 277 f.

²⁶ EW, iii. 540–5.

²⁷ Supply without Burden, EW, i. 283.

²⁸ Proposal for a Mode of Taxation, EW, i. 401.

²⁹ Institute of Political Economy, EW, iii. 366 f.

³⁰ Ibid., p. 367.

³¹ Bentham acknowledged that indirect taxes – if they were too heavy – would cause smuggling. Thus, indirect taxes would be limited by smuggling. However, ‘[t]he limits prescribed to indirect taxation by smuggling are set not by the nature of things, but by the imperfection of the laws’ (ibid., p. 366).

³² Manual ofPolitical Economy, EW, i. 245 and A Protest Against Law-Taxes, Bowring, ii. 580.

³³ Concerning the income tax introduced by William Pitt in 1799, Bentham commented as follows: ‘How grievous is the burthen of a tax on income to no more than 10 per Cent, is but too universally felt: a tax not to be endured without abatement, it was supposed, by an income less than £200 a year, and therefore softened down as low as l/120th till it comes to incomes of £60 a year, at which mark it stops altogether’ (Paper Mischief [Exposed], EW, ii. 444). This way of abatement coincides with that which he demonstrated in his Proposal for a Mode of Taxation.

³⁴ EW, iii. 529.

³⁵ Ibid., p. 543.

³⁶ Bowring, ii. 582.

³⁷ Institute of Political Economy, EW, iii. 369, and The Constitutional Code, Bowring, ix. 451.

³⁸ With respect to the poor rate, Bentham did not think of it as a good tax, although he did not insist on the abolition of it. For example, he stated that ‘the compensation has been accompanied by the disadvantages and inequalities which it is so difficult to avoid in any system of compensation. The workmen employed by the rich farmer have received a considerable part of their pay at the expence of the small farmer who does not employ labour, and at the expence of all other classes without distinction, from the richest men of property to the smallest artisans, in view of the fact that all are forced to contribute to the poor rate, unless they be themselves among the poor’ (The True Alarm, EW, iii. 195).

³⁹ EW, iii. 524. Both duties on imports and drawbacks on exports belonged to the non-agenda: the government should not encourage home industries through these measures. However, Bentham suggested that a tax on exports could be a good financial method if they replaced domestic burdensome taxes: ‘[A] tax upon exports to foreign countries is borne by the inhabitants of foreign countries. Whatever imposition of this kind foreigners can be made to bear, is so much gain to us. If, indeed, when a fresh tax is imposed upon an article of export, the quantity of it produced is considerably diminished by the tax, a temporary distress is thereby produced, the suffering of which may be less or greater than the suffering saved by the saving in the amount of taxes borne by ourselves. But if the quantity produced be merely prevented from encreasing, no such suffering is produced, and the benefit by the saving in home-paid taxes is pure’ (Institute of Political Economy, EW, iii. 367–8).

⁴⁰ Bowring, ii. 518.

⁴¹ In this respect, I agree with Steintrager's, opinion that ‘Bentham did not view the tax system as a means of redistributing the wealth of society’ (Steintrager, J., Bentham, London, 1977, p. 74)Google Scholar.

⁴² Mill, J. S., ‘Errors and Truths on a Property Tax’, Newspaper Writings, ed. Robson, Ann P. and Robson, John M., 4 vols., Toronto, 1986, CW, xxiii. 552CrossRefGoogle Scholar. Mill repeated that his principle was equal sacrifice of enjoyment (or surplus spending) rather than income. See Principles of Political Economy, ed. Robson, John M., 2 vols., Toronto, 1965, CW, iii. 819Google Scholarand Essays on Economics and Society, ed. Robson, John M., 2 vols., Toronto, 1967, CW, v. 466Google Scholarf., 472, 552, 588.

⁴³ Mill, James, Elements of Political Economy, 3rd edn., London, 1844, p. 273Google Scholar.

⁴⁴ ‘Errors and Truths’, CW, xxiii. 550.

⁴⁵ The origin of a proportional tax on surplus spending can be seen in Bentham's following statement: ‘To an English reader it might naturally enough appear, that all that was meant was, that the weight of taxation should bear in a loose sense as equally, or rather as equitably – that is, as proportionally, as it could conveniently be made to do; – that taxes … should be imposed – for example, upon superfluities in preference to the necessaries of life’ (Anarchical Fallacies, Bowring, ii. 518).

⁴⁶ ‘Errors and Truths’, CW, xxiii. 553. Edgeworth and Pigou demonstrated that, given the diminishing marginal utility of income, Mill's principle of equal sacrifice of enjoyment was not compatible with least sacrifice of enjoyment (Edgeworth, F. Y., Papers Relating to Political Economy, New York, 1970, p. 115Google Scholarand Pigou, A. C., A Study in Public Finance, 3rd edn., New York, 1971, p. 57)Google Scholar. However, this criticism seems misleading, because Mill rejected interpersonal comparisons of utility: ‘Whether the person with 10,000l. a year cares less for 1000l. than the person with only 1000l. a year cares for 100l., and if so, how much less, does not appear to me capable of being decided with the degree of certainty on which a legislator or a financier ought to act’ (Principles of Political Economy, CW, iii. 810). Thus, Mill, as well as Bentham, did not connect the principle of equal sacrifice to the principle of least sacrifice by the law of diminishing marginal utility.

⁴⁷ Kaldor referred to Mill, together with Hobbes, Marshall, Pigou, Fisher and Einaudi, as one of the earlier advocates of the expenditure tax (Kaldor, N., An Expenditure Tax, London, 1955, p. 11)Google Scholar.

⁴⁸ Mill's exemption rule was not adopted in Peel's income tax policy. Mill criticized this fact as follows: ‘The existing tax treats all kinds of incomes exactly alike, taking its sevenpence (now fourpence) in the pound, as well from the person whose income dies with him, as from the landholder, stockholder, or mortgagee, who can transmit his fortune undiminished to his descendants. This is a visible injustice’ (Principles of Political Economy, CW, iii. 813).

⁴⁹ Essays on Economics and Society, CW, v. 468–71. In order to reinforce the notion that his proposal to exempt savings from income tax fits the principle of equal sacrifice of enjoyment, Mill drew attention to the problem of double taxation on savings. He showed that, if savings were not exempted from income tax, one had to pay it twice, first on his original income, and secondly on interest yielded by saving that income. Consequently, in order for income tax to be a just tax, savings – or interest – has to be exempted from it (ibid., p. 476).

⁵⁰ Ibid., pp. 560 f., 580. For Bentham's similar statement concerning the tangible capital, see Proposal for a Mode of Taxation, EW, i. 386 f.

⁵¹ For Bentham's similar opinion about taxes on stimulants, see, for example, Institute of Political Economy, EW, iii. 368.

⁵² ‘Errors and Truths’, CW, xxiii. 554.

⁵³ Essays on Economics and Society, CW, v. 488.

⁵⁴ Following Bentham, Mill opposed taxes on law proceedings and contracts. Principles of Political Economy, CW, iii. 857–63.

⁵⁵ For example, see Essays on Economics and Society, CW, v. 489, 496; ‘Lord Althorp's Budget’, Essays on England, Ireland, and the Empire, ed. Robson, John M., Toronto, 1982, CW, vi. 162Google Scholar; The Later Letters of John Stuart Mill 1849–1873, ed. Mineka, Francis E. and Lindley, Dwight N., 4 vols., Toronto, 1972Google Scholar, CW, xvii. 1830; ‘Local Changes on Real Property’, Public and Parliamentary Speeches, ed. Robson, John M. and Kinzer, Bruce L., 2 vols., Toronto, 1988, CW, xxviii. 278Google Scholar.

⁵⁶ Mill, J. S., ‘Property and Taxation’, Essays on Economics and Society, CW, v. 701Google Scholar f.

⁵⁷ Ekelund and Walker demonstrate that the income deduction of £100 which Mill proposed exempted about 95 per cent of the British people from the income tax, concluding that ‘the exemption shifted the burden to the wealthy, and increasingly to people with massive hereditary (landed) fortune’ (Ekelund, R. B., Jun., and Walker, W. M., ‘J. S. Mill on the Income Tax Exemption and Inheritance Taxes: The Evidence Reconsidered’, History of Political Economy, xxviii (1996), 571–3)Google Scholar. However, the problem remains about whether or not Mill himself knew this percentage, and whether he targeted intentionally the landed class in his income-tax policy.

⁵⁸ Principles of Political Economy, CW, iii. 811.

⁵⁹ Ibid., p. 812. Mill opposed Lord Althorp's proposal for a tax on the transfer of stock (‘The Budget’, Newspaper Writings, CW, xxii. 263–9), and criticized the Times, which supported a property tax imposed solely on landholders and fundholders (‘Confiscation Scheme of the Times’, CW, xxiii. 566–8).

⁶⁰ Essays on Economics and Society, CW, v. 554.

¹ Ekelund and Tollison showed that Mill revealed ‘great concern for the effects of taxation on the condition of the poor’ (Ekelund, R.B., Jun., and Tollison, R. D., ‘The New Political Economy of J. S. Mill: The Means to Social Justice’, Canadian Journal of Economics, ix (1976), 217)Google Scholar. West opposed this opinion, demonstrating that, if anything, Mill's overall tax proposals were favourable to ‘the existing middle class’ (West, E. G., ‘J. S. Mill's Redistribution Policy: New Political Economy or Old?’, Economic Inquiry, xvi (1978), 571)Google Scholar. In contrast to these interpretations, this paper contends that Mill proposed the income-tax policy only subject to the principle of equal sacrifice of enjoyment. In this respect, this paper supports Hollander's view that ‘the income tax system should not be used to alter the distribution of income – the presumption is that earned income is under consideration’ (Hollander, S., The Economics of John Stuart Mill, 2 vols., Oxford, 1985, p. 859)Google Scholar.

⁶² Principles of Political Economy, CW, iii. 811.

⁶³ Essays on Economics and Society, CW, v. 566.

⁶⁴ Mill thought that the rates of inheritance taxes should be low against evasion. See, for example, ‘Property and Taxation’, CW, v. 702 and The Later Letters, CW, xvii. 858.

⁶⁵ Although inheritance taxes were taxes on capital, Mill cleared this problem for the following three reasons: (1) Smith's maxim that every tax is paid from income not from capital is not true; (2) since the tax revenue will be partly used to redeem national debt, taxation on inheritances is merely a transfer of capital from taxpayers to creditors; (3) the reduction of capital accumulation because of inheritance taxes will be negligible in Britain, where capital is so abundant that it is exported (Principles of Political Economy, CW, iii. 822–4).

⁶⁶ Ekelund and Walker, 575.

⁶⁷ Essays on Economics and Society, CW, v. 494.

⁶⁸ Mill, J. S., ‘On the Necessity of Uniting of the Question of Corn Laws with That of Tithes’, Newspaper Writings, CW, xxiii. 539Google Scholar.

⁶⁹ CW, iii. 821 f.

⁷⁰ Ibid., p. 819.

⁷¹ The variable land tax is not Mill's patent. Before Mill, Smith had already suggested it. See Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, ed. Campbell, R. H., Skinner, A. S. and Todd, W. B., 2 vols., Oxford, 1976Google Scholar, The Glasgow Edition of the Works and Correspondence of Adam Smith, ii. 828–36.

⁷² Essays on Economics and Society, CW, v. 691.

⁷³ Public and Parliamentary Speeches, CW, xxix. 430.

⁷⁴ Ibid., p. 430.

⁷⁵ Ricardo, D., Principles of Political Economy and Taxation, ed. Sraffa, P., Cambridge, 1951Google Scholar, The Works and Correspondence of David Ricardo, i. 167.

⁷⁶ For my works concerning classical theories of taxation, see Dome, T., ‘Adam Smith's Theory of Tax Incidence: An Interpretation of His Natural-Price System’, Cambridge Journal of Economics, xxii (1998)Google Scholar; ‘Malthus on Taxation and National Debt’, History of Political Economy, xxix (1997)Google Scholar; and ‘Ricardo's Theory of Tax Incidence: A Sraffian Reinterpretation’, Cambridge Journal of Economics, xvi (1992)Google Scholar.

⁷⁷ In his Principles of Political Economy, Mill fundamentally followed Ricardo with respect to the incidence theory of individual taxes: taxes on rent, profits, wages, raw produce, necessities, luxuries, and houses. However, between chapters and sections which explained the Ricardian theory of tax incidence, he inserted his own original ideas concerning general income tax, inheritance taxes, and the land tax.

⁷⁸ Except for the issue of Mill's position, this classification would reinforce Hutchison's conclusion: ‘If Bentham is still to be described as a “classical” economist, along with Smith and Ricardo, then this much-controverted adjective is virtually emptied of any doctrinal significance’ (Hutchison, T. W., ‘Bentham as an Economist’, Economic Journal, lxvi (1956), 306)Google Scholar.

⁷⁹ Bentham clearly demonstrated this point. He stated that ‘[w]hen security and equality are in opposition, there should be no hesitation: equality should give way. The first is the foundation of life – of subsistence – of abundance – of happiness; every thing depends on it. Equality only produces a certain portion of happiness: besides, though it may be created, it will always be imperfect; if it could exist for a day, the revolutions of the next day would disturb it. The establishment of equality is chimera: the only thing which can be done is to diminish inequality’ (Principles of the Civil Code, Bowring, i. 311).

⁸⁰ This conclusion would support Riley's following statement: ‘Mill's view as I interpret it shares much in common with this picture of Benthamite utilitarianism but also “enlarges” upon it in notable ways, such that perfection of general security is associated with a distinctive system of equal rights’ (Riley, J., ‘J. S. Mill's Liberal Utilitarian Assessment of Capitalism Versus Socialism’, Utilitas, viii (1996), 51)Google Scholar.

⁸¹ I wish to thank Dr P. Schofield for his useful comments on a early draft of this article. Of course, errors remain my responsibility.