31 Oct. 1801

+ A

Polit. Economy

Method

Indication of the Indirect Income-Tax resulting from Encrease of Money.

In Britain. money is about ,72,000,000, mean (Ao 1801) about ,216 000 000

(72:216::1:3.) Each million added to money, adds therefore three million for

ever to pecuniary income and this (setting aside the 15 per Cent for ever

(,150,000) for profit on the million, if employ'd in the shape of capital)

without addition to real income. If every year ,2,000,000 be added to money,

plus ,300 000 for an equivalent to the addition made as above to real wealth, in

36 years (Ao 1837) the nominal or pecuniary amount of a mass of real income

equal to the amount of 1801 will be doubled i:e: become ,432,000,000: to which

will be added ,10 800 000 for an equivalent to the intermediate additions to

real wealth (,300,000 x 36) But the ,432 000 000 of 1837 being worth no more

than the ,216 000 000 of 1801, each ,10 of the ,432 000 000 will be worth but

,50 of the ,216 000 000: that is the income of each fixed-incomist will have

been subjected to an indirect income-tax of 50 per Cent: the King's ,900,000

will be reduced to ,450,000. He whose pecuniary income in 1837 is double what it

is in 1801 will in point of wealth be neither a gainer, nor loser, by the

change. Not so in point of comfort. For, by so much as he is a gainer in wealth

in the one way, by so much he is a loser in the other: and by the nature and

constitution of the human frame, sum for sum, enjoyment from gain is never equal

to suffering from loss.}