174 POPULAR SCIENCE MONTHLY. 



or its product. For example, there is nothing compulsory or un- 

 equal in an ordinary license tax. If the license is high, no one is 

 compelled to engage in a business covered by its legal require- 

 ment ; and few persons will until the average profits of the taxed 

 business by the regular laws of competition finally reach the 

 average profits of other like employments or investments. A tax 

 on commodities like whisky, tobacco, fermented liquors, oleo- 

 margarine, playing cards, dice, and the like, can always be avoided 

 as a primary tax, or can be paid at discretion. But there is 

 nothing voluntary in the payment of a tax upon all real or per- 

 sonal property, or on the income of such property. Human 

 beings can not subsist without some forms of personal property, 

 and therefore a tax upon all personal property or its income is of 

 necessity compulsory and not voluntary. Any general assess- 

 ments of personal property on or by reason of its income, as well 

 as assessments on real estate, are unavoidable in their nature, and 

 therefore, from a philosophic or economic point of view, are 

 typically direct taxes. (See Alexander Hamilton's brief in the 

 Carriage case, Hamilton's Works, vol. vii, p. 848.) 



The presence or absence of the principle of compulsion as con- 

 stituting the essential difference between a direct and an indirect 

 tax has not, it is believed, been before recognized by economists. 

 And yet it is clearly involved or comprised in the definitions 

 given by acknowledged authorities on the subject. Thus M. 

 Leroy Beaulieu, in his Traite de la Science des Finances, charac- 

 terizes those taxes " as direct which the legislator intends should 

 be paid at once and immediately by him who bears their burden. 

 They strike at once his fortune or his revenue, and every interme- 

 diary between him and the treasury is suppressed." McCulloch 

 (Principles of Taxation) describes a tax " to be direct when it is 

 immediately taken from property," and indirect " when it is taken 

 from its owners by making them pay for liberty to use certain 

 articles or exercise certain privileges." M. Say defines a direct 

 tax to be the " absolute demand of a specific portion of an indi- 

 vidual's real or supposed revenue." (Political Economy, p. 461.) 



In the assessment of direct taxes a proportionality is generally 

 sought between the person who pays and the value of his prop- 

 erty, or ability to pay. Thus, in the taxation of watches, which 

 are popular subjects for direct taxation, the proportionality be- 

 tween the owner who pays and the amount of property rated is 

 recognized and maintained, by imposing, as in the city of Phila- 

 delphia, a tax of one dollar on watches of gold and one of seventy- 

 five cents on watches of silver. In the assessment of indirect 

 taxes the maintenance of any proportionality between the tax- 

 j)ayer and his fortune is not regarded. The idea of a jiersonal 

 assessment, which is characteristic of direct taxes, furthermore 



