nd [wm 1800]

Ch.2. Leading Features

'.5. III. Finance

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* 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.