TAX. 



pockets of 'the people as littk- as pofiible, over and above 

 what it brings into the pubhc trcafury of the ftatc." This 

 maxim may be couiiteraftod by requiring for the levying of 

 the tax a great number of officers, whofe falaries may con- 

 Funie the greater part of the produce of the tax, and whofe 

 ncrquiiites may impofe another tax upon the people ; — by 

 -■ibftrufting their induilry, and difcouraging them from ap- 

 plying to certain branches of bufincfs, whicli might give 

 ; maintenance and employment to great multitudes ; — by the 

 i iorfeiturcs and other penalties which thofe unfortunate indivi- 

 ' duals incur, who attempt unfuccefsfully to evade the tax, 

 which may ruin them, and thus put an end to the benefit the 

 community might have received from the employment of their 

 I capitals ; tlie penalties of Imugghng being fo ordered as to 

 rife in proportion to the temptation ; and by fubjefting the 

 people to the frequent vifits and the odious examination of 

 the tax-gatherers, which occalion much trouble, vexation, 

 and opprefTion. 

 I As the private revenue of individuals arifes ultimately 



! from the three different fources of rent, profit, and wages, 

 every tax mud finally be paid from one or other of thefe three 

 different forts of revenue, or from all of them indifferently. 

 The firll kind of taxes comprelieuds thofe upon the rent of 

 kind. (See Land-tax.) Taxes upon the produce of the 

 land are in reality taxes upon the rent. (See Tithes.) 

 Taxes upon tlie rent of houfes include that which may be 

 called the Building rent, and that which is commonly called 

 the Ground rent ; and fo far as thefe fall upon the inhabit- 

 ants, they muff be drawn from tlie fame fource as the rent 

 itfelf, and muff be paid from their revenue, whether derived 

 from the wages of labour, the profits of ttock, or the rent 

 <if land ; and it is in every refpeft of the fame nature as a 

 tax upon any other fort of confumable commodities. Houfes 

 EOt inhabited ought to pay no tax ; houfes inhabited by the 

 proprietor ought to be rated, not according to the expence 

 which they might have coif in building, but according to 

 the rent which an equitable arbitration might judge them 

 likely to bring, if leafed to a tenant. Ground rents are 

 Hill a more proper fubjeft of taxation than the rent of 

 houfes, or even the rent of laud. The principal objeftion to 

 all ta,xes upon houfes and windows is their inequality, and 

 therefore they are direftly contrary to the firft of Dr. 

 Smith's maxims above ftated. Their natural tendency is to 

 lower rents. 



Taxes upon profit, or upon the revenue arifing from ftock, 

 comprehend the tax upon ftock, fuch as is impofed by the 

 land-tax in England, by which it was intended that the ftock 

 /liould be taxed in the fame proportion as the land, and taxes 

 upon the profit of particular employments. Taxes upon 

 the wages of labour muff finally fall upon the confumer. 

 Befides the taxes already enumerated, there are others, fuch 

 as capitation taxes, and taxes upon confumable com- 

 modities, which muft be paid indifferently from whatever 

 revenue the contributors may poffefs ; from the rent of their 

 land, from the profits of their flock, or from the wages of 

 their labour. Tlie impoffibility of taxing the people, in pro- 

 portion to their revenue, by any capitation, feems to have 

 _given occafion to the invention of taxes upon confumable 

 commodities ; and thefe are either ncceff;u-ies or luxuries. 

 A tax upon the neceffaries of life operates exaftly in the 

 fame manner as a direft tax upon the wages of labour, and 

 will fall, if the labourer be employed by a manufafturcr, on 

 the confumer ; or if he be employed by a farmer, it will fall 

 upon the rent of the landlord. But it is othcrwife with 

 refpeft to taxes upon luxuries. The rife in the price of 

 the taxed commodities, will not neceffarily occafion any 

 j-jfe in the wages of labour. Any rife in the average 



price of neceffaries, unlefs it is Compenfatcd by s pro* 

 portionable rife in the wages of labour, muff neceffarily 

 diminifli more or lefs the ability of tlie poor to bring up 

 numerous families, and confequently to fupply the demand 

 for ufeful labour ; whatever may be the flate of that demand, 

 whether inereafing, ftationary, or declining ; or fuch as re- 

 quires an inereafing, ftationary, or declining population. 



Taxes upon luxuries have no tendency to raife the price 

 of any other commodities except that of the commodities 

 taxed. Taxes upon neceffaries, by raifing the wages of 

 labour, neceffarily tend to raiTe the price of all manufac- 

 tures, and confequently to diminifli the extent of their fale 

 and confumption. Taxes upon luxuries are finally paid by 

 the confumers of the commodities taxed, without any retri- 

 bution. They fall indifferently upon every fpecies of 

 revenue, the wages of labour, the profits of ftock, and the 

 rent of land. Taxes upon neceffaries, fo far as they affeft 

 the labouring poor, are finally paid, partly by landlords in 

 the diminlflied rent of their lands, and partly by rich con- 

 funiLTs, whether landlords or others, in the advanced price 

 of manufaftured goods ; and always with a confiderable 

 over-charge. 



In Great Britain, the principal taxes upon the neceffaries 

 of life are thofe upon fait, leather, foap, and candles. Heavy 

 taxes upon thefe commodities muft fomewhat increafe the 

 expence of the fober and induilrious poor, and muft, confe- 

 quently, more or lefs raife the wages of their labour. Such 

 taxes, iiotwithftanding their immediate cffeft, afford a con- 

 fiderable revenue to government, and accordingly they are 

 continued and multiplied. 



Confumable commodities, whether neceffaries or luxuries) 

 may be taxed in two different ways. The confumer may 

 either pay an annual fum on account of his ufing or con- 

 fuming goods of a certain kind ; or the goods may be taxed 

 wliile they remain in the hands of the dealer, and before they 

 are delivered to the confumer. Tlie confumable goods 

 which lail a confiderable time before they arc confumed al- 

 together, are moft properly taxed in the one way. Thofe 

 of which the confumption is either immediate or more 

 fpeedy, in the other. 



Of the latter kind is the greater part of the duties of 

 excife and cuftoms. Thofe of excife are impofed chiefly 

 upon goods of home produce deftined for home confump- 

 tion ; and they are impofed only upon a few forts of goods 

 of the moft general ufe. The duties of cuftoijis are much 

 more ancient than thofe of excife. (See Customs and 

 Excise.) It is obferved that high taxes, fometimes by di- 

 minifliing the confumption of the taxed commodities, and 

 fometimes by encouraging fmuggling, frequently afford a 

 fmaller revenue to government than what might be drawn 

 from more moderate taxes. 



When the diminution of revenue is the effeft of the dimi- 

 nution of confumption, there can be but one remedy, and 

 that is the lowering of the tax. 



When the diminution of the revenue is the effeft of the 

 encouragement given to fmuggling, it may perhaps be reme- 

 died in two ways ; either by diminiihing the temptation to 

 fmuggle, or by inereafing the difficulty of fmuggling. The 

 temptation to fmuggle can be diminifhed only by the lower- 

 ing of the tax ; and the difficuhy of fmuggling can be in- 

 creafed only by cftablifhing that fyftein of .adminiftration 

 which is moft proper for preventing it. 



The duties upon foreign luxuries imported for home Con- 

 fumption, though they iomctimes fall upon the poor, fall 

 principally upon people of middling or more than middling 

 fortune. Such are, for example, tlie duties upon foreign 

 wines, upon coffee, chocolate, tea, fugar, &c. 



The 



