INCIDENCE OF TAXATION. 587 



abstinence, has jjrovided the seed-corn, which he might have 

 eaten, as truly as it includes him who ploughs the land that 

 that seed may yield a sixty-fold return. 



Taxation, therefore, affects only consumable commodities. 

 It takes from industry a part of its reward. But it cannot 

 or will not take such products of industry as are usually 

 known as fixed capital. To take possession of fixed pro- 

 perty and use it without compensation for the purposes of 

 the government is not to tax, but to confiscate. It is 

 important to notice, moreover, that the amount coming into 

 the State treasury is no true measure of the taxation of any 

 country : the real taxation is the amount of otherwise un- 

 productive effort entailed upon the people by the Govern- 

 ment ; unproductive, that is, as regards the supply of their 

 own wants. Compulsory military service, for instance, is an 

 enormous tax upon the productive energies of any people, 

 but it represents nothing in the State ti-easury. Taxation 

 when excessive may drive capital from the country in the 

 same manner that excessive local taxation drives capital from 

 any locality ; therefore, the producer of food and other con- 

 sumable products of industry has thrown upon him the duty 

 of distributing the burden of taxation between capital and 

 labour under the laws which govern the distribution of all 

 charges upon production. 



We see, then, the fallacy of all proposals for redistributing 

 taxation in the hope of ensuring that one class of the com- 

 munity shall not be unduly favoured at the expense of another 

 or others. If taxes are levied directly on land they reduce 

 the income of the landowner. They reduce his expenditure ; 

 and, to the extent to which they, being unproductively 

 expended, reduce his productive expenditure, they reduce the 

 ultimate wage fund. 



if it is a new tax, the landowner must reduce his 

 expenditure. Qe may dismiss a gardener who has worked 

 in his pleasure grounds, or he may reduce his consumption 

 of champagne and thus indirectly dismiss the factory hand, 

 whose exportable work would have paid for tiie luxury. The 

 State with his money finds employment in the dock-yards 

 for the dismissed gardener or the factory hand — not probably 

 in pj'ojjria persona. The net result, then, is that the land- 

 owner has an enjoyment the less, but that the power of the 

 country to maintain its population, alike during the current 

 season and subsequently, remains unaffected. Very different 

 will be the case should the landowner dismiss a ploughman 



