
1799: | 
forms of truft-deeds, and by collufive 
deliveries during life, for evading the tax, 
in as far as it affected perfonal property}; 
and thus a {ucceflion tax would ultimately 
become a partial, and therefore oppreflive, 
burthen on land. 
Thefe. objections, applying chiefly to 
the mode of levying a tax on fucceflion, 
may be palliated, or perhaps removed, by 
judicious regulations : it remains now to 
mention an objeétion, which, being to the 
principle of all fuch taxes, cannot ever be 
weakened by any modifications. Lord 
Lauderdale has ftated with much ingenui- 
ty the advantage which a tax on capital 
poffefles over one on income, in enfuring 
a greater increafe of revenue from the aug- 
mentation of our wealth ; I think his rea- 
foning on this point very fatisfactory; 
but it appears to me, that a tax on fuc- 
ceffion, by diminifhing the produétive ca- 
pital of the country, would effeStually 
prevent that augmentation of wealth, 
from which the increafe of the revenue is 
expected to proceed. 
It muft be unneceflary to prove, to any 
perfon who has read that juftly popular - 
work, the Wealth of Nations, that capital 
is the faving from the former produce of 
the land and labour of the country, and 
that, when once acquired, it greatly in- 
creafes the future produce. Each man’s 
income may be confidered as divided into 
two portions; of which one, being con- 
fumed within the year, adds nothing to 
his opulence; the other, being faved, in- 
creafes the amount of his capital. The 
capital of the nation, itis obvious, muft be 
the aggregate of the different capitals pof- 
fefled by individuals, and therefore it be- 
comes important to inquire, from which 
portion of the annual income of the inha- 
bitants the amount of a propofed tax, will 
mott probably be taken. 
When a tax is laid on commodities, it 
naturally raifes the price of the commo- 
dities taxed, and, being ultimately paid 
by the confumer as part of that price, it is 
withdrawn from what he had fet apart for 
confumption. If the taxis very high, he 
may, no doubt, negle&t to make fuffici- 
ent allowance for it at firft; but, finding 
that he exceeded the expence which he had 
propofed to himfelf, even though he fhould 
not difcover from what this excefs has 
arifen, he will foon confider of fome re- 
trenchment, by which he may continue to 
live at the rate which he thinks juited to 
his circumttances. 
In the fame manner, a direét tax, whe- 
ther levied on capital or income, may at 
firft affect the general accumulation of 
MonrTuty Mac, No, xLix, 
Obfervations on Lard Lauderdale on Revenue. 
605 
wealth; but, whenever it comes to be con- 
fidered as a permanent charge, the con- 
tributor will endeavour gradually to re- 
duce his ordinary expences, fo that he 
may neither encroach on the capital he 
has already acquired, nor prevent that ac- 
cumulation from which he expeéts future 
independence, perfonal confideration, or 
the comfortable eftablifhment cf his fa- 
mily. 
A tax on fucceffion, however, falls not 
on expenditure, but on capital. If fucha 
tax is levied from perfonal property, it 
muft evidently convert what was formerly 
capital, into a fund deftined to the ex- 
penditure of the ftate.’ If a tax of ten per 
cent. is railed on a property amounting to 
a hundred pounds, the heir acquires only 
ninety pounds of additional capital, which 
he may employ in fome kind of re-pro- 
duétion ; but, as his predeceffor poffeffed 
a hundred pounds which he employed in 
the fame manner, the productive wealth of 
the nation has been reduced by a fum ex- 
aétly equal to the amount of the tax. 
The fame diminution of capital muft 
be occafioned by a tax on the fucceffion to 
lands. If lands are worth thirty years? 
purchafe, ten per cent. of the value is ex- 
actly equal to three years’ rents; a fum, 
which, as the heir will, in almoft every 
cafe, immediately live according to his 
new, not to his old, rank in fociety, can- 
not be drawn from the rents to which he 
has fucceeded, but muft be provided, either 
by a loan, or by a fale of part of the lands. 
The eftate muft thus be either diminifhed 
or-burthened, and the amount of the loan 
or purchafe-money, which was formerly 
part of the floating capital of the nation, 
is paid into the public treafury, and ccn- 
fumed. There formerly exifted both the 
land and. the floating capital, which is 
taken to pay the tax; the land no doubt 
Kill remains, though mortgaged or di- 
vided, but the amount of the tax no lon- 
ger exifts as a feparate and diitinét ca- 
pital. 
It furely muft be a ferious objeétion to 
any fcheme of taxation, that it daminithes 
the productive capital of the country. As 
long as the money expended by the com- 
munity is drawn from what would other- 
wife have been confumed by the inbabit- 
ants, the progrefs of national wealth is 
not even impeded: individuals may. be 
deprived of comforts or luxuries which 
they might otherwile have enjoyed, bat 
the national capital augments as quickly, 
and yields its annual produce as fully as 
if no tax had been levied. Part of the 
general income is expended in a manner 
41 fomewhat 
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