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.

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_316.xml

Title: [11 Mar 1804 Polit. Economy]

Description: 11 Mar 1804

Polit. Economy

Finance

Ch.2. Leading Features

' Finance

1

1. Where a tax is imposed upon any commodity, a proportionable discouragement -

intended or not intended - is applied to the corresponding branch of

profit-seeking industry, and thence a proportionable encouragement to the most

immediately rival branches. In this way the branch of Political Economy which

belongs to Finance, is unavoidably, though perhaps often undesignedly, entangled

with the other branches.

2. To an indirect tax, each man pays no more than he pleases, and the vexation

attendant on the collection of it, is confined to the makers and venders of the

commodity taxed.

3. To a direct tax each man pays what the imposer of the tax pleases, and the

vexation embraces every man who pays.(a)

4. A tax on imports is borne by our own people: a tax upon exports to foreign

countries is borne by the inhabitants of foreign countries. Whatever imposition

of this kind foreigners can be made to bear is so much gain to us. If a fresh

tax is imposed upon all articles of export, and the quantity of it produced is

considerably diminished by the tax, a temporary distress is thereby produced,

the suffering of which may be less or greater than the suffering saved, by the

saving in the amount of taxes borne by ourselves. But if the quantity produced

be merely prevailed from encreasing no such suffering is produced, and the

benefit by the saving in home-paid taxes is pure. The addition which would have

been made to the quantity of the commodity thus taxed, spreads itself among

other commodities of all sorts.}

{ Note

(a) Among a certain set of political philosophers, may be observed a horror for

indirect taxes, a passion for direct ones: a passionate desire to be coerced and

vexed. The word indirect seems to have been the source of illusion here, as the

word venality when applied to judicial offices. A man who buys the office at

such a price as to perform the functions of it gratis, shews that it is the

function that recommends it to him, not the salary. A eulogistic or dyslogistic

appellative, stands in place of a reason, and works more than a reason, upon the

great body - not only of mankind, but of philosophers and politicians.