An Inquiry into the Nature and Causes of the Wealth of Nations - Adam Smith (ebooks children's books free .TXT) 📗
- Author: Adam Smith
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fall upon the rent and profit; properly upon the rent of the
vineyard. When it has been proposed to lay any new tax upon
sugar, our sugar planters have frequently complained that the
whole weight of such taxes fell not upon the consumer, but upon
the producer; they never having been able to raise the price of
their sugar after the tax higher than it was before. The price
had, it seems, before the tax, been a monopoly price ; and the
arguments adduced to show that sugar was an improper subject of
taxation, demonstrated perhaps that it was a proper one ; the
gains of monopolists, whenever they can be come at, being
certainly of all subjects the most proper. But the ordinary price
of barley has never been a monopoly price ; and the rent and
profit of barley land have never been above their natural
proportion to those of other equally fertile and equally well
cultivated land. The different taxes which have been imposed upon
malt, beer, and ale, have never lowered the price of barley ;
have never reduced the rent and profit of barley land. The price
of malt to the brewer has constantly risen in proportion to the
taxes imposed upon it ; and those taxes, together with the
different duties upon beer and ale, have constantly either raised
the price, or, what comes to the same thing, reduced the quality
of those commodities to the consumer. The final payment of those
taxes has fallen constantly upon the consumer, and not upon the
producer.
The only people likely to suffer by the change of system here
proposed, are those who brew for their own private use. But
the exemption, which this superior rank of people at present
enjoy, from very heavy taxes which are paid by the poor labourer
and artificer, is surely most unjust and unequal, and ought to be
taken away, even though this change was never to take place. It
has probably been the interest of this superior order of people,
however, which has hitnerto prevented a change of system that
could not well fail both to increase the revenue and to relieve
the people.
Besides such duties as those of custom and excise above
mentioned, there are several others which affect the price of
goods more unequally and more indirectly. Of this kind are the
duties, which, in French, are called peages, which in old Saxon
times were called the duties of passage, and which seem to have
been originally established for the same purpose as our turnpike
tolls, or the tolls upon our canals and navigable rivers, for the
maintenance of the road or of the navigation. Those duties, when
applied to such purposes, are most properly imposed according to
the bulk or weight of the goods. As they were originally local
and provincial duties, applicable to local and provincial
purposes, the administration of them was, in most cases,
entrusted to the particular town, parish, or lordship, in which
they were levied; such communities being, in some way or other,
supposed to be accountable for the application. The
sovereign, who is altogether unaccountable, has in many countries
assumed to himself the administration of those duties; and though
he has in most cases enhanced very much the duty, he has in many
entirely neglected the application. If the turnpike tolls of
Great Britain should ever become one of the resources of
government, we may learn, by the example of many other nations,
what would probably be the consequence. Such tolls, no doubt,
are finally paid by the consumer; but the consumer is not taxed
in proportion to his expense, when he pays, not according to the
value, but according to the bulk or weight of what he consumes.
When such duties are imposed, not according to the bulk or
weight, but according to the supposed value of the goods, they
become properly a sort of inland customs or excise, which
obstruct very much the most important of all branches of
commerce, the interior commerce of the country.
In some small states, duties similar to those passage duties are
imposed upon goods carried across the territory, either by land
or by water, from one foreign country to another. These are in
some countries called transit-duties. Some of the little
Italian states which are situated upon the Po, and the rivers
which run into it, derive some revenue from duties of this kind,
which are paid altogether by foreigners, and which, perhaps, are
the only duties that one state can impose upon the subjects of
another, without obstruction in any respect, the industry or
commerce of its own. The most important transit-duty in the
world, is that levied by the king of Denmark upon all merchant
ships which pass through the Sound.
Such taxes upon luxuries, as the greater part of the duties of
customs and excise, though they all fall indifferently upon every
different species of revenue, and are paid finally, or without
any retribution, by whoever consumes the commodities upon which
they are imposed ; yet they do not always fall equally or
proportionally upon the revenue of every individual. As every
man’s humour regulates the degree of his consumption, every man
contributes rather according to his humour, than proportion to
his revenue: the profuse contribute more, the parsimonious less,
than their proper proportion. During the minority of a man of
great fortune, he contributes commonly very little, by his
consumption, towards the support of that state from whose
protection he derives a great revenue. Those who live in another
country, contribute nothing by their consumption towards the
support of the government of that country, in which is situated
the source of their revenue. If in this latter country there
should be no land tax, nor any considerable duty upon the
transference either of moveable or immoveable property, as is the
case in Ireland, such absentees may derive a great revenue from
the protection of a government, to the support of which they do
not contribute a single shilling. This inequality is likely to be
greatest in a country of which the government is, in some
respects, subordinate and dependant upon that of some other. The
people who possess the most extensive property in the dependant,
will, in this case, generally chuse to live in the governing
country. Ireland is precisely in this situation; and we
cannot therefore wonder, that the proposal of a tax upon
absentees should be so very popular in that country. It might,
perhaps, be a little difficult to ascertain either what sort, or
what degree of absence, would subject a man to be taxed as an
absentee, or at what precise time the tax should either begin or
end. If you except, however, this very peculiar situation, any
inequality in the contribution of individuals which can arise
from such taxes, is much more than compensated by the very
circumstance which occasions that inequality; the circumstance
that every man’s contribution is altogether voluntary ; it being
altogether in his power, either to consume, or not to consume,
the commodity taxed. Where such taxes, therefore, are
properly assessed, and upon proper commodities, they are paid
with less grumbling than any other. When they are advanced by the
merchant or manufacturer, the consumer, who finally pays them,
soon comes to confound them with the price of the commodities,
and almost forgets that he pays any tax.
Such taxes are, or may be, perfectly certain; or may be assessed,
so as to leave no doubt concerning either what ought to be paid,
or when it ought to be paid; concerning either the quantity or
the time of payment. What ever uncertainty there may sometimes
be, either in the duties of customs in Great Britain, or in other
duties of the same kind in other countries, it cannot arise from
the nature of those duties, but from the inaccurate or unskilful
manner in which the law that imposes them is expressed.
Taxes upon luxuries generally are, and always may be, paid
piece-meal, or in proportion as the contributors have occasion to
purchase the goods upon which they are imposed. In the time and
mode of payment, they are, or may be, of all taxes the most
convenient. Upon the whole, such taxes, therefore, are perhaps as
agreeable to the three first of the four general maxims
concerning taxation, as any other. They offend in every
respect against the fourth.
Such taxes, in proportion to what they bring into the public
treasury of the state, always take out, or keep out, of the
pockets of the people, more than almost any other taxes. They
seem to do this in all the four different ways in which it is
possible to do it.
First, the levying of such taxes, even when imposed in the most
judicious manner, requires a great number of custom-house and
excise officers, whose salaries and perquisites are a real tax
upon the people, which brings nothing into the treasury of the
state. This expense, however, it must be acknowledged, is more
moderate in Great Britain than in most other countries. In
the year which ended on the 5th of July, 1775, the gross produce
of the different duties, under the management of the
commissioners of excise in England, amounted to �5,507,308:18:8�,
which was levied at an expense of little more than five and
a-half per cent. From this gross produce, however, there
must be deducted what was paid away in bounties and drawbacks
upon the exportation of exciseable goods, which will reduce the
neat produce below five millions. {The neat produce of that year,
after deducting all expenses and allowances, amounted to
�4,975,652:19:6.} The levying of the salt duty, and excise
duty, but under a different management, is much more expensive.
The neat revenue of the customs does not amount to two millions
and a-half, which is levied at an expense of more than ten per
cent., in the salaries of officers and other incidents. But the
perquisites of custom-house officers are everywhere much greater
than their salaries ; at some ports more than double or triple
those salaries. If the salaries of officers, and other
incidents, therefore, amount to more than ten per cent. upon the
neat revenue of the customs, the whole expense of levying that
revenue may amount, in salaries and perquisites together, to more
than twenty or thirty per cent. The officers of excise receive
few or no perquisites ; and the administration of that branch of
the revenue being of more recent establishment, is in general
less corrupted than that of the customs, into which length of
time has introduced and authorised many abuses. By charging upon
malt the whole revenue which is at present levied by the
different duties upon malt and malt liquors, a saving, it is
supposed, of more than �50,000, might be made in the annual
expense of the excise. By confining the duties of customs to a
few sorts of goods, and by levying those duties according to the
excise laws, a much greater saving might probably be made in the
annual expense of the customs.
Secondly, such taxes necessarily occasion some obstruction or
discouragement to certain branches of industry. As they always
raise the price of the commodity taxed, they so far discourage
its consumption, and consequently its production. If it is a
commodity of home growth or manufacture, less labour comes to be
employed in raising and producing it. If it is a foreign
commodity of which the tax increases in this manner the price,
the commodities of the same kind which are made at home may
thereby, indeed, gain some advantage in the home market, and a
greater quantity of domestic industry may thereby be turned
toward preparing them. But though this rise of price in a foreign
cotnmodity, may encourage domestic industry in one particular
branch,
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