The Commercial Interest and the Early Income Taxes, 1799–1842

The first half of the nineteenth century witnessed a shift in the nature of British taxation: from the heavy and numerous indirect taxes of the ‘fiscal-military’ era, towards a fiscal system based on fewer but more profitable duties. The introduction of the income tax played a pivotal role in this evolution. At the same time, the period sat at the heart of an ongoing shift in the nature of commerce, as the powerful mercantile players of the seventeenth and eighteenth centuries gave way to the industrial giants of the Victorian age. Despite the importance of both of these developments, historians have given little consideration to the interaction between them.

This thesis seeks to remedy this deficiency by drawing together these two histories, in order to shed light on how and why income tax law evolved as it did. In doing this, the thesis identifies an important relationship between income tax policy and the country’s commercial interest. At the beginning of the period, the commercial interest used its influence to secure the adoption of an advantageous scheme of tax policy, and to inflame existing public hostility to the tax, which ultimately contributed to its repeal in 1816. By 1842, however, ongoing changes in the nature of commercial influence over policymaking, as well as commercial priorities, had resulted in the emergence of a commercial climate more receptive to the tax’s reintroduction. Thus, the longstanding commercial barriers to the development of the tax had begun to break down. This forms an important and hitherto underdeveloped explanation for the tax’s readmittance to the fiscal fabric. The central contention of this thesis is that in order to properly historicise Britain’s early experiences of income tax, we must acknowledge the importance at all points of the enduring relationship between the commercial interest and tax policy.