THE IXCIDEXCE OF TAXES 115 



Thus, if sales by auction were subject to a tax ad valorem or 

 otherwise, and if sales were quite unreserved, the number of 

 transactions not being altered, the prices would be unaltered, 

 but the sellers would only get the prices minus the tax. 



This case does not practically arise, because, if auctions were 

 really so taxed, although in each auction that occurred the sale 

 might be unreserved, auctions would, as a whole, be checked ; 

 fewer people would put up their goods for sale in that way, 

 the prices would rise, the number of transactions would be 

 diminished, and the tax would really be borne in part by the 

 buyers and part by the sellers. 



If the trade between two countries really consists in the 

 exchange of goods, effected by the agency of money as a unit 

 for expressing value, but not involving the actual transfer of 

 coin, the above principles show the whole gain by the exchange 

 to be the sum of two gains which each party would make by 

 each trade if it alone existed. 



If by duties one portion of the trade be extinguished or 

 much diminished, both parties lose, but if the other portion of 

 the trade remain uninjured, then, although there may be no 

 exchange of commodities other than of goods for actual money, 

 nevertheless the full gain on that which is untaxed remains 

 intact. Thus, although the French may tax our goods, and so 

 inflict a loss on themselves and on us, this is no reason for our 

 inflicting an additional loss on the two communities by taxing 

 the import of their goods. 



House Rent. 



I will next consider the effect of a tax on house rent. 



Landlords are here the sellers, and tenants the buyers of 

 what may be termed a commodity ; not the house, but the loan 

 of a house for a term of years the tenant buys what might be 

 called, by the extension of a suggestion of Professor Jevons, a 

 house-year from his landlord. 



The difference between the house and other commodities 

 such as food or dress is, that the house remains, whereas they 

 are consumed. The house-year is consumed year by year, but 

 it is reproduced year by year without material fresh expenditure 



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