JB_017_317.xml

Title: [11 Mar 1804 Polit. Economy]

Description: 11 Mar 1804

Polit. Economy

Ch.2. Leading Features

Finance

2

{5 The direct effect of a tax called indirect is to make a man pay for the use of

the article taxed, and to go on using it as before: an indirect effect is to

make him cease to use it, to avoid paying the tax: This indirect effect is the

same as that of a prohibitive law, prohibiting the use of the article, viz:

under a penalty equal to the amount of the tax. So far as the one effect takes

place, the other does not. Commonly they take place together, in proportions

infinitely diversifiable.

In the way of prohibition, a tax seldom falls on the article taxed, so heavily

as it appears or might be expected to do. The prohibition falls not so much upon

the article taxed, as upon whatever article each man can best spare. When a

fresh tax is imposed upon wine, a man who having been used to buy wine and

books, is fonder of wine than of books, reduces the quantity not so much of his

wine, as of his books. By a tax upon gin, many a man instead of being sobered

has been starved.

The best sort of indirect tax is that which by its effect in the character of a

prohibition, diminishes the consumption of an article the use of which is

pregnant with future misery, the dregs of the cup of present pleasure. Such

above all are the pabula of drunkenness. The fiscal is in this case crowned by a

moral, one.

The worst sort of indirect tax is that which in the character of a prohibition

lessens the use of any article, to which a man's attachment is apt not to be so

great as it were to be wished it were, considering what is the produce of it in

the shape of permanent good, over and above the evanescent pleasure. The fiscal

use is in this case clogged with an antimoral tendency. Books, especially of the

instructive kind may be mentioned as examples. But books of the least

instructive kind, music, instruments of pastime of all sorts, not to speak of

public entertainments - every thing - morality is served by every thing that

calls a man from drunkenness.}

JB_017_290.xml

Title: [nd [wm 1800] Ch.2. Leading Features]

Description: nd [wm 1800]

Ch.2. Leading Features

'.5. III. Finance

29

98

3

9. The worst sort of indirect tax, is that which in the character of a

prohibition lessens the use of an article to which a man's attachment is apt not

to be so great as it were to be wished it were, considering what is the produce

of it in the shape of permanent good, over and above the evanescent pleasure.

The fiscal use is in this case clogged with an anti-moral tendency. Books,

especially of the instructive kind, may be mentioned as examples. But books of

the least instructive kind, music, instruments of pastime of all sorts, not to

speak of public entertainments - every thing - morality is served by every

thing, that calls a man off from drunkenness.

10. The mischief done in the way of prohibition by that species of direct tax

which is imposed upon produce, and encreases with the quantity or value of the

produce, is frequently but too real, but is apt to be exaggerated. Though my

profit would be greater, if I had nobody to share it with me, my having somebody

to share it with me does not make me deny myself all profit. Few men so spiteful

as to hate others more than they love themselves: especially the government,

which is nobody, quarrels with nobody, and protects every body. A man without a

partner has the whole profit to himself; yet many men submitt to saddle

themselves with partners. The government, which imposes proportional taxes on

produce, is a partner who furnishes protection, though nothing else.

11. I have elsewhere spoken of the best of all financial resources, and the

worst. The best, {supposing public opinion to admitt of it}, as well as the most

copious, seems to be - that which gives to the public a share, in property

become

JB_017_250.xml

Title: [nd [wm 1800] Ch. 2. Leading Features]

Description: nd [wm 1800]

Ch. 2. Leading Features.

'.2.I. Wealth. 2. Agenda

8

6

45

in that case, indirect, but direct: viz. by allowances given in money at the

expence of National wealth, and thence of National enjoyment. The question is -

whether without this encouragement the trade would be beneficial enough to be

carried on, or not. Let the answer be in the negative, the quantity of the

matter of wealth thus bestowed is so much taken from enjoyment, and given to

defence: and thence, if not necessary to defence, thrown away. Let the answer be

in the affirmative, the result of the measure is - besides the transfer of so

much of the matter of wealth from the account of defence, a neat addition to the

quantity of the whole. But it is only in the supposed necessity of it for the

purpose of defence. that such sacrifice of national enjoyment can receive its

justification. Take away the necessity, there remains wealth purchased at the

expence of justice: enjoyment given to one man, at the expence of enjoyment

taken from another. A case conceivable, and perhaps realized, is - that, as to

part, the allowance falls under one of the above suppositions; as to other part,

under the other.