586 PROCEEDINGS OF SECTION F. 



tax is no tax." But exception must be taken to the conten- 

 tion of Professor Nicholson and other writers who regard it 

 as of prime importance, that great care should be taken that 

 the real burden of a tax shall fall on those aimed at by the 

 Legislature. Let us suppose, for example, a land tax is to be 

 imposed upon all agricultural land. Land in England pays, 

 or has redeemed, such a tax to the extent of 20 per cent, on 

 what was once its value. As a new tax, such an impost 

 diminishes the selling value of all agricultural land to the 

 extent of the capitalised amount of the tax, — because invest- 

 ment in land is but one form among many for the investment 

 of the savings of the community. The land will not bear 

 a heavier rent because of the tax, so, other things being 

 equal, the landlord must pay it out of the previous rental ; 

 and any new purchaser will expect such rental, reduced by 

 the tax, to yield him the same percentage on his investment 

 as was enjoyed, before the tax, by the then owner. The tax, 

 then, although it has forfeited a part of the property of the 

 original owner of the land, does not, if continued, fall on the 

 new purchaser. Where does it fair!" Obviously, on the 

 produce of the land, just as rent does. In fact it becomes part 

 of the "economic" rent, and as such, a charge on the pro- 

 duce of the land. 



Or, consider a tax of another description — an import duty 

 on tea which is not produced in England. To obtain the 

 tea an English product must have been exported. That 

 product, then, is indirectly, if not directly, the payment for 

 the cost of the tea as landed before the payment of duty. 

 To obtain the tea duty paid the consumer must, now that 

 the duty is imposed, produce not only what the foreigner 

 requires for the tea, but also what his own Government 

 demands. That payment may be made in one case in kind 

 and in the other in money is beside the question. 



The only real taxpayer is, then, the producer who pro- 

 duces more than he himself consumes. The tax must be 

 paid before he can enjoy the fruits of his industry. And as, 

 according to economic law, the net profits of all industries 

 tend to equality, a special charge laid on one industry will 

 divert labour and capital from it to others not directly subject 

 to the charge, thus gradually spreading it over all industries. 

 The title of producer, however, must not be restricted to 

 those who labour directly with hand or brain in the work of 

 production. It includes all those who, in a wider sense, 

 contribute to the harvest. It includes him who, by simple 



