more library or park. But when we come to protective taxes the abuse is monstrous. The legislator who has in his hands this power of taxation uses it to say that one citizen shall have less clothes in order that he may contribute to the profits of another citizen's private business.
31. Hence if we look at the nature of taxation, and if we are examining protectionism from its own standpoint, under the assumption that it is true, instead of finding any confirmation of its assumptions, in the nature of the means which it proposes to use, we find the contrary. Granting that people make mistakes and fail of the highest prosperity which they might win when they act freely, we see plainly that more taxes cannot help to lift them up or to correct their errors; on the contrary, all taxation, beyond what is necessary for an economical administration of good government, is either luxurious or wasteful, and if such taxation could tend to wealth, waste would make wealth.
(D) Examination of the Plan of Mutual Taxation.
32. Suppose then that the industries and sections all begin to tax each other as we see that they do under protection. Is it not plain that the taxing operation can do nothing but transfer products, never by any possibility create them? The object of the protective taxes is to "effect the diversion of a part of the capital and labor of the country from the channels in which it would run otherwise." To do this it must find a fulcrum or point of reaction, or it can exert no force for the effect it desires. The fulcrum is furnished by those who pay the tax. Take a case. Pennsylvania taxes New England on every ton of iron and coal used in its industries. Ohio taxes New England on all the wool obtained from that state for its
