5aj/'s Catechism of 



Give me an examjjie in which the 

 faxes are discharged with a poitioii of 

 capital. 



If a man whose income is absorbed by 

 the ordinary contribution*:, tni;stiier with 

 the maintenance of his family, comes to 

 an heritancf, and as an heir he is boutiH 

 to pay impost, it must be taken out of 

 his inheritance; tlie capital in the hands 

 of tlie heir is ttierelore no lunger so con- 

 siderable as it was in the iunds of tiie 

 deceased. Similar dbservatioos may be 

 made on the expenses of proceedings at 

 law, bonds, securities, (.S:c. In all the^e 

 eases the tax paid by the CMitiibutor is 

 withdjawn from the mass of capital use- 

 fully employed, and is so much capital 

 devoted to consumption, and actually 

 disappears. This happens also in cases 

 tvhere the profits are small and the im- 

 post consitleiahle; nimy cuiitiihutors 

 cannot in that case dischar<;e the taxes 

 without breaking in upon iheir capitals, 

 i. The major part of the taxes are liow- 

 ever taken from income:!.' 

 * Yes : for, if the taxes dry np too com- 

 pletely the sources of production, they 

 would diminish more and more every day 

 tiie products with wliich aiuue they could 

 be paid. 



If there are some of tbem which break 

 into the capital of individuaU, how hap- 

 pens it that the means of production are 

 not destroyed in the long run? 



Because at the same lime tliat some 

 individuaU break into llieir capitals, 

 tiiuse of others are increased by savinsr, 

 . Do nut the taxes serve, on the other 

 hand, to multiply products by compel- 

 ling the contributors to produce, in order 

 tabeableto pay them.? 



The hope of enjoying tlie products one 

 has created is a much stronifer incite- 

 nieiic to production than tf e idea of satis. 

 fyiiig llie tax gatherer. But, if the im- 

 post should excite tiie desire of pro- 

 ducinginore, it does not afford the means. 

 Ill Older to extend prorluctioii, it is iiecti- 

 sary to increase capital, which is the 

 more impossible, as the necessity of 

 paying the lax prtvcms tl.csavmg, which 

 alotte creates capital. In short, if the 

 necessity of paying tlie taxes sliouli! ex- 

 cite eliorts which augment production, 

 there will not result from it any increase 

 of the (.'tiieral riches, since vvhat is raised 

 by :he impost is consumed, and does not 

 ierve to iiiciease any saving. Thu-, it 

 niny be seen that great taxes are destruc- 

 tive of p'lblic prosperity, instead of being 

 favonratde tu it. 



Which are the principal kindb of taxes 

 levied fur this purpose? 



Political Economy. 6l3 



S )metimes they are exacted from the 

 contributors at so much per head, as in 

 the capitation tax. Sometimts as in the 

 land tax, they take a part of tlie revenue 

 arising from the lands; which are valued, 

 either alter the actual rent or after the 

 extent and fertility of the soil. Siine- 

 liines tlie rent ol a li.use, the number of 

 its doors and windows, and of the ser- 

 vants and horses kept by ihc contributor, 

 serve a« a basis for the amount of his 

 contribution. Soiiietunes, In-, profits are 

 valued according to the industry he cai^- 

 ries on: from hence the impost on li- 

 cences (puletiies). All these contrihu,-, 

 ti.uis luar the name of direct t.ixes, be- 

 cause they are demanded, directly, of 

 the contritiutor in person. 



Are not ail taxes demanded direc'.ly 

 fi'Oni I he contributor? 



Ttity are sometimes demanded, ntit 

 from tlie p-iyer, but are included in the 

 price of the merchundize on which the 

 impo t is laid, and with lut the receiver 

 knowing even the name ot the contri- 

 butor. For tliia reason they are called 

 indirect taxes. 



When and in what manner are taxes 

 levied on inerchamiije? 



They are sometimes levied at the in- 

 stant ill which tliey are produced, like 

 tlie salt in France, or the gi;id and silver 

 mines in Mexico. A portion of the value 

 of these merchandize is levied at [lie ino« 

 ment of their exiraction. Sometimes 9, 

 duty is levied at the moment of their 

 transportation fioni one place to another, 

 as in the iiisraoce of import duties; and 

 in the "Octroi," which is paid in France 

 at the entruiice of towns: soiiietirnes at 

 the moment of consumption, as for 

 stamps and admissions to the theatres. 



Dies the amount of ihe impost re- 

 inaiii at the expense of those who pay it? 



No: they enileavnur to reimburse 

 themselves, at least in part, from those 

 who purchase the products, in the crea« 

 tion of which the contributors have 

 assisted. 



Do the contributors always succeed In 

 thus sliiftiiig the burden from theinsclvt-s? 



They si;ldum succeed completely, be- 

 cause they cannot do so without raisin* 

 the price of their products; and a rise f>f 

 prici.' always dimiiiislies the coniumpiion 

 of a product by putting it out of the 

 reach of s one of its cobsumcrs. Tlifl 

 demand for this sort o( product then di- 

 minishes, and its price falls. The price 

 not then affording so liberal a reinuncra- 

 tinn for the productive seivices dt-Voted 

 to this object, the ([uantity of it is les- 

 sened. 'I'hus, when iiu jiiiport duty is 

 4 I 2 Lid 



