504 POPULAR SCIENCE MONTHLY. 



which he in part or all supports, taxation begins, and the more 

 companions he has, the greater improvements he makes, and the 

 higher civilization he enjoys, the heavier will be the taxes he 

 must pay. 



Taxes legitimately levied, then, are a part of the cost of all pro- 

 duction, and there can be no more tendency for taxes to remain upon 

 the persons who immediately pay them than there is for rents, the 

 cost of insurance, water supply, and fuel to follow the same law. 

 The person who wishes to use or destroy the utility of property 

 by consumption to gratify his desires, or satisfy his wants, can not 

 obtain it from the owners or producers with their consent, except by 

 gift, without giving pay or services for it; and the average price of 

 all property is coincident with the cost of production, including the 

 taxes advanced upon it, which are a part of its cost in the hands of the 

 seller. Again, no person who produces any form of property or 

 utility, for the purpose of sale or rent, sustains any burden of legiti- 

 mate taxation, although he may be a tax advancer; for, as a tax 

 advancer, he is the agent of the State, and a tax collector from the 

 consumer. But he who produces or buys, and does not sell or rent, 

 but consumes, is the taxpayer, and sustains a tax in his aggregate con- 

 sumption, where all taxation must ultimately rest. In short, no per- 

 son bears the burden of taxation, under an equitable, legitimate 

 system, except upon the property which he applies to his own exclu- 

 sive use in ultimate consumption. The great consumer is the only 

 great taxpayer. 



Finally, a great economic law pointed out by Adam Smith, which 

 has an important and almost conclusive bearing upon this vexed 

 problem of the diffusion of taxes, should not be overlooked — namely, 

 his statement in The Wealth of Nations that " no tax can ever reduce 

 for any considerable time the rate of profit in any particular trade, 

 which must always keep its level with other trades in the neighbor- 

 hood." In other words, taxes and profits, by the operation of the laws 

 of human nature, constantly tend to equate themselves. Man is 

 always prompted to engage in the most profitable occupation and to 

 make the most profitable investment. And since the emancipation 

 from feudalism with its sumptuary laws, legal regulations of the 

 price of labor and merchandise, and other arbitrary governmental in- 

 vasions of private rights, individual judgment and self-interest have 

 been recognized as the best tests or arbiters of the profitableness of a 

 given investment or occupation. The average profits, therefore, of 

 one form of investment, or of one occupation (as originally shown by 

 Adam Smith), must for any long period equal the average profits of 

 other investments and occupations, whether taxed or untaxed, skill, 

 risk, and agreeableness of occupation being taken into considera- 



