PRINCIPLES OF TAXATION. 505 



lion.* Natural laws will, accordingly, always produce an equilibrium 

 of burden between taxed and untaxed things and persons. There is 

 a level of profit and a level of taxation by natural laws, as there is a 

 level of the ocean by natural laws. In fact, all proportional con- 

 tributions to the State from direct competitors are diffused upon per- 

 sons and things in the taxing jurisdiction by a uniformity as manifest 

 as is the pressure upon water, which is known to be equal in every 

 direction. 



A word here in reference to the popular idea that the exemption 

 of any form of property is to grant a favor to those who possess such 

 property. This idea has, however, no warrant for its acceptance. 

 Thus, an exemption is freedom from a burden or service to which 

 others are liable; but in case of the exclusion of an entire class of 

 property from primary taxation, no person is liable, and therefore 

 there is no exemption. An exclusion of all milk from taxation, while 

 whisky is taxed, is not an exemption, for the two are not competing 

 articles, or articles of the same class. It is true that highly excessive 

 taxation of a given article may cause another and similar article, in 

 some instances, to become a substitute or competing article; and 

 hence the necessity of care and moderation in establishing the rate of 

 taxation. We do not consider that putting a given article into the 

 free list, under the tariff, is an exemption to any particular indi- 

 vidual; but if we make the rate higher on one taxpayer or on one 

 importer of the same article than on another taxpayer or importer, 

 we grant an exemption. We use the word " exemption," therefore, 

 imperfectly, when we speak of " the exemption of an entire class of 



* As applied to the wages of labor, the truth of this principle is equally incontestable. 

 *' The sewing girl performing her toilsome work by the needle at one dollar a day, the street 

 sweeper working the mud with his broom at a dollar and a half, the skilled laborer at two 

 and three dollars, the professor at five, the editor at five or ten, the artist and the songstress 

 at ten or five hundred dollars a day are all members of the working classes, though working 

 at different rates. And it is only the difference in their effectiveness that causes the differ- 

 ence in their earnings. Bring them all to the same point of efficiency, and their earnings 

 also will be the same." — W. Jungst, CincinnaU. 



John Locke, in his treatise On the Standard of Value, treats of taxation, and shows 

 conclusively that if all lands were nominally free from taxation, the owners of lands 

 would proportionally pay more taxes than now, because the same amount of money must 

 continue to be collected in some form, and the average profits of lands would only be equal 

 to the average profits of other investments ; and further, that the expense and annoyance 

 (another form of expense) would be increased if the tax were exclusively levied in the first 

 instance upon personal property ; and hence the landowner would be burdened with his 

 proportion of the unnecessary expense and annoyance. He also shows that you may change 

 the form of a uniform tax, but that you can not change the burden ; and that the change 

 will increase the burden, if the new system is more expensive and annoying than the old. 

 Locke wrote nearly a century before Adam Smith published his Wealth of Nations, and it 

 would seem probable that Smith acquired his ideas relative to the average profits of invest- 

 ments from Locke. 



vol. liv. — 37 



