Principles of Political Economy and Taxation. 177 



on which the produce is r. Let the price before the tax be p 

 and after itp(l+x); the rest of the notation as before. Hence 

 (\-t)(l + x)pr is now the value of the cultivator's portion of the 

 produce, which must pay wages and profits. Also profits remain 

 unchanged, for if they were to fall, the cultivator would remove 

 his capital to other employments. Hence 



pr = lw + yc, pr(l-t)a+x) = lw(l+fx)+yc 



subtract, and pr(l-t)(\ + x)- V r = lw.fx: whence 



T _ prt nt 



Pr(l-t)-flw n {\-t)-f 



If, as before, »«*./-£, an d if t = ±, x =± ; pr i ces ri se as 11:14. 



In these cases prices rise so as to compensate the whole of the 

 cultivator's loss and of the increased expenses of the labourer. 

 The whole tax (assuming our Postulates) falls upon the rich 

 consumer. 



This is true on the supposition that the consumption is not 

 at all affected by the price. Col. Thompson has properly ob- 

 served that this assumption is by no means correct; and has 

 shewn that if we make the more natural supposition that an in- 

 crease of price will diminish the consumption, Mr. Ricardo's con- 

 clusions are no longer true. Pursuing Col. Thompson's views, I 

 have, in a preceding memoir, given formula expressing the por- 

 tions of such a tax which fall respectively in Rent, Profits, and 

 Prices, and have shewn that in general the former is the largest 

 portion. {Camb. Trans. Vol. in). 



According to the postulate of wages, no part of such a tax 

 could fall on wages. 



Vol. IV. Part I. z 



