176 History of the English Landed Interest. 



How could the Benedict landlord, blessed with a quiverful, 

 find the same facilities of paying two shillings in the pound 

 out of his £1,000 a year in rents as a bachelor landlord in 

 receipt of the same income ? 



Again, Adam Smith laid down this further admirable law ; 

 viz.. that, in order to promote equality of taxation, "the sub- 

 jects of every State ought to contribute to the support of the 

 Government as nearly as possible in proportion to their respec- 

 tive abilities, that is in proportion to the revenue which they 

 respectively enjoy under the protection of the State." ^ There 

 are here, as Professor Fawcett pointed out, two statements of 

 the principle which, unfortunately, do not mean the same 

 thing. If ability to pay is to be measured by the amount of 

 a man's income, then it would be fair to tax the rents of a 

 landlord (whence all the heavy outlay of estate maintenance 

 has to be defrayed) on the same basis as the dividends of a 

 bondholder. "We shall show later on in this chapter that it 

 would be very difficult, if not impossible, to adjust even the 

 income tax so as to render it subject to Smith's first canon. 

 But, were this possible, it would lead to no practical results, un- 

 less the principle of equable taxation were capable of a general 

 application ; and to attempt to tax commodities according to 

 each individual's ability to pay, is, on the face of it, an absurd 

 undertaking. 



We have so far got over the difficulties of Smith's principle 

 since his day by altering its wording, so that it now reads, 

 " The total liabilities of each individual for taxation should be 

 in proportion to his ability to contribute to the State revenues." 

 Thus altered, the basis of equable taxation is in theory not 

 quite, but approximately, insured.- The discovery, however, 

 of a fiscal scheme which realises this principle is yet to immor- 

 talise some future Chancellor of the Exchequer. 



How far did such teaching affect the policy of heavily tax- 

 ing the land? In that a system of direct taxation is more 

 adapted to the fundamental principles enumerated by Smith 

 than one of indirect taxation, the national financiers were still 



» Wmlth of Nations, A. Smith, Vol. I. bk.' v. ch. ii. p. 260. 

 ^ Manual of Political Economy, Bk. IV. cli. i. Fawcett. 



