PRINCIPLES OF TAXATION. 173 



"The man who will not buy a tax receipt, but expects his 

 party to purchase it for him, is a bad citizen. He is, in effect, a 

 person who is bribed, and who holds the value of his vote at a 

 very small sum." Philadelphia Times. 



Of other terms employed to indicate different forms or meth- 

 ods of taxation, and a clear understanding of the meaning of 

 which is essential to any correct discussion of the subject, the 

 following are the most important : 



DIRECT AND INDIRECT TAXES. Taxes are generally charac- 

 terized or classified as being either direct or indirect ; but these 

 terms, although in common use, are somewhat indefinite, owing 

 to the inability of economists to agree as to their exact meaning ; 

 while in the United States this indefiniteness has been increased 

 by the circumstance that its Supreme Federal Court has felt com- 

 pelled by the language of the Federal Constitution to assign to 

 the term " direct" as applicable to taxation, a " legal " rather than 

 an economic definition. 



In a general sense the term direct is applied to those taxes 

 which are demanded from the particular persons whom it is 

 intended or desired shall pay them'; and indirect to those which 

 are demanded from a person with the expectation and intention 

 that he shall indemnify himself for payment of the same at the 

 expense of some other person.* There is, furthermore, a marked 

 distinction, founded on sound philosophy, between a direct and 

 indirect tax, which, if concisely expressed, will constitute two 

 unimpeachable definitions. Thus an indirect tax, whoever may 

 first advance it, is paid voluntarily and primarily (in the sense of 

 ultimately) by the consumer of the taxed article. On the other 

 hand, a direct tax has always in it an element of compulsion ; not 

 necessarily on the person who advances the tax in block, but on 

 the person who is compelled to use or consume the taxed property 



* " In the assessment of indirect taxation, and such as is intended to bear upon specific 

 classes of consumption, the object itself is alone attended to without regard to the party 

 who may incur the charge. Sometimes a portion of the value of the specific product is 

 demanded at the time of production as in France, in respect to the article of salt. Some- 

 times the demand is made on entry, either into the State, as in the duties of import ; or 

 into the towns only, as in the duties of entry. Sometimes the tax is demanded of the con- 

 sumer at the moment of transfer to him from the last producer as in the case of the stamp 

 duty, and the duty on theatrical tickets in France. Sometimes the Government requires a 

 commodity to bear a particular mark, for which it makes a charge as in the case of the 

 assay mark on silver and a stamp on newspapers. Sometimes it monopolizes the manufac- 

 ture of a particular article or the performance of a particular kind of business as in the 

 monopoly of tobacco and the postage of letters. Sometimes, instead of charging the com- 

 modity itself, it charges the payment of its price as in the case of stamps on receipts and 

 mercantile paper. All these are different ways of raising a revenue by indirect taxation ; 

 for the demand is not made on any person in particular, but attaches upon the product or 

 article taxed." M. Jean Say, Treatise on Political Economy, 1821. 



