PRINCIPLES OF TAXATION. 587 



or appropriated by man, and the capital of the nation is the 

 ensemble (the whole) of the utilities it possesses. In the case of 

 a private person the conditions are the same. His capital is the 

 ensemble of the utilities he possesses. The result which he, 

 equally with the state, seeks to attain, is the same — namely, to 

 make the capital which they control fructify to the greatest pos- 

 sible extent for the benefit of the citizens of the state on the 

 one hand and the individual on the other ; and between the ex- 

 penditures which it is necessary to incur for the attainment of 

 these ends on the part of the state and the individual there is 

 no essential difference. And from this analogy, thus urged to 

 identity, M. Menier deduces the following definition of taxes : 



They represent, he says, ilie investment of the capital of the 

 nation, or state, and the general expenses of its care and develop- 

 ment* 



It is obvious, however, that M, Menier's analogy would not 

 hold good under a system which failed to recognize any differ- 

 ence between a tax and an arbitrary exaction. 



" So far as it is necessary for the security of person and prop- 

 erty, money spent for the support of government is as usefully 

 expended as is the purchase of clothing or provisions ; but when 

 the sum taken exceeds what is required for that purpose, it is only 

 a question of amount between the sovereign of India, who exacts 

 one half of the produce, and the legislator of Great Britain or 

 the United States, who exacts a million of pounds or of dollars for 

 which an equivalent is not given." — H, C. Carey, On Wealth, p. 

 SJfS; Philadelphia, 1888. 



An almost self-evident corollary from these sound deductions 

 would be, that any tax or system of taxation that did not protect 

 but diminished private property would tend to imperil or dry up 

 the sources of public revenue. 



A recognition of the true relation which a just and equitable 

 system of taxation sustains to the state and to the capital or prop- 

 erty of its citizens, and also of the fact that under such a system 

 a tax ivorks to a diminution of the income of the property taxed, 

 and not to a dimiiiution of the value of the property itself, ought 



* M. Menier, in proposing the above definition, himself recognized the necessity of ac- 

 companying it with the following explanation : " When I say that taxes ' represent the in- 

 vestment of national capital,' it is of course understood that I speak only of that of the 

 investment assigned to the state, and that I am very far from the communistic theory, ac- 

 cording to which the state, being the owner of the national capital, should turn it to ac- 

 count for its own profit. In the useful employment of the capitals of the nation there are 

 an individual part and a collective part. In my definition of taxes only that collective part, 

 the syndicate contribution, is taken into account." — A Treatise on fhe Taxation of Fixed 

 Capital, hy 31. Menier, of the French Chamber of Deputies. English translation, by I. 0. 

 Gallegan, Fellow of the University of France ; London, 1880. 



