Principles of Political Economy and Taxation. 18] 



Tfie preceding calculation is upon the supposition that the 

 money metal is produced in the country in which the tax is laid. 

 If the precious metals be imported from other countries, the in- 

 vestigation of the consequences will require considerations which 

 will hereafter be stated in treating of foreign trade. 



5. Taxes on Wages. (Ric Chap, xiv.) 



We assume still the postulate of wages, although, as has been 

 said, it appears to be unfounded, and consequently the infer- 

 ences to which it leads, as to the incidence of taxes, will not be 

 verified in fact. But, granting the principle, there appears to be 

 some difficulty in tracing its results, and Mr. Ricardo, in attempt- 

 ing to do so, has been led into an arithmetical fallacy, as was 

 pointed out by Col. Thompson, and as I have shewn in a pre- 

 ceding Memoir. (Ricardo, p. 301, and Camb. Trans. Vol. m. 

 p. 192). Mr. Ricardo's opinion was, that taxes upon wages fall 

 entirely on profits, while other writers maintain that they will affect 

 prices and rent. Calculations such as we have already employed 

 will enable us to obtain the true result in this case. 



Let the labourer expend a fraction f of his wages on agricul- 

 tural produce (as corn), and the remainder 1— yon manufactured 

 goods. And by the postulate of wages, let his real consumption 

 remain the same after the imposition of the tax, as it was before. 

 If prices rise, the rise may be different in corn and in goods, 

 according to the proportion of fixed and circulating capital in 

 the two cases. 



Suppose that for corn the fixed capital c-lw—mlw. for goods in 

 the same manner let n\w be the fixed capital: and let the wear 

 and tear of the fixed capital be included in the circulating capital. 

 Also suppose that after the imposition of the tax, the price of 



