29 Aug 1801

E

Polit. Economy

Method

Finance

Taxation

94

8

Taxes are either on property, or on a presumption of property.

In both cases, they are either on income or on capital.

Taxes on property in the shape of income are either direct, or on consumption

called of late years from the French indirect taxes.

Taxes on capital diminish present capital and thence future and growing wealth,

by the whole of their amount: taxes on income by the amount of the savings that

would have been made out of income and added to capital instead of being spent

on maintenance, had it not been for the tax.

The fault of direct taxes on presumption of property is inequality: that of

direct taxes on property, is vexation: indirect taxes have no fault beyond the

mere privation which must be undergone at any rate: the vexation which in the

case of direct taxes on property is extended /extends itself/ to every body,

confines itself in the case of indirect taxes to the manufacturers /fabricators/

and vendors who make themselves amends for it in the price.