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_318.xml

Title: [11 Mar 1804 Polit. Economy]

Description: 11 Mar 1804

Polit. Economy

Ch.2.

Finance

3

{ The mischief done in the way of prohibition by that species of direct tax which

is imposed upon produce, and encrease 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 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 everybody. A man without a partner has

the profit to himself, yet many men submitt to saddle themselves with partners.

The government which imposes proportional taxes on produce is a partner who

finds protection[?], but nothing else.

I have elsewhere spoken of the best financial resource, 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 vacant by death, on

failure of near relatives. The formation of Counter expectations being prevented

by preestablished law, receipts from this source need not be attended with that

vexatious sense of privation, which is the inseparable accompaniment of a tax.

The worst is that tax, call it direct or indirect, which as often as it acts as

a prohibition, deprives man of every thing, by depriving him of justice: the tax

I mean upon law proceedings, by which the poor, that is the bulk of the

community, especially the oppressed and afflicted part of it, are put out of the

protection of the law.}

JB_017_289.xml

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

Description: nd [wm 1800]

Ch.2. Leading Features

'.5. III. Finance

28

97

2

* But if the quantity produced be merely prevented from encreasing, no such

suffering is produced, and the benefit by the saving in home-paid taxes is pure.

The addition which, had it not been for the tax, would have been made to the

quantity of the commodity thus taxed, spread itself among other commodities of

all sorts.

6. The direct effect, of the sort of tax called indirect, is to make a man pay

for the use of the article taxed, and 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.

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

exclusively as might be supposed. The prohibition falls - not merely upon the

article taxed, but 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 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.

8. 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, use.