xxxiv Contents. adjustment of the income-tax almost impracticable — Objections to a graduated or progressive income-tax — The incidence of a tax distin- guishes the real from the nominal payer of the tax — The incidence of the income-tax will partly fall on the labourers, if any portion of the tax is paid out of capital-^The wealth of a country may be seriously afTected by an income-tax, if the tax diminishes the national capital — Hence, in India an income-tax would produce very serious conse- quences, because there capital is accumulated very slowly — K the income-tax is remitted upon incomes of less than lool, a year, this amount ought to be deducted from all larger incomes, and only the remainder should be taxed — One serious inequality affecting the income-tax, is caused by the power which dishonest people have of evading it— The advantages of an income-tax in such a country as England outweigh the diwkd vantages pages 543 — 563 Chapter III. Taxes on ConiTnodities and other Indirect Taxes. Distinction between a direct and an indirect tax ; the former is really paid by the person from whom it is levied ; the latter is levied from one person and paid bv another — A tax is often made indirect by custom ; for instance, tne poor rates are often paid bv farmers, and are, therefore an indirect tax — Poor rates might be paid by the land- lord ; they would then be a direct tax — None of our taxes on commodities are protective — Taxes on commodities must be generally characterised by inequality, because they can rarely be made ad valorem — Taxes on commodities are generally certain in their amount, and therefore obey Adam Smith's second rule — ^As far as the con- sumer is concerned, taxes on commodities are always paid at a convenient time, and, therefore, obey Adam Smith's third rule— Some taxes, such as the tax on hops, were obliged to be levied from the g reducer at a very inconvenient time — The convenience of bonding ouses — Taxes on commodities ought, as far as possible, to be made consistent with Adam Smith's last rule — Customs duties are most inexpensive to levy in an island, because a land frontier is more difficult to protect against smuggling — Excise and customs duties should be confined to a few articles of consumption — The most serious objection against taxes on commodities is due to the fact that a tax increases the price of a commodity by an amount which exceeds the sum which the tax yields to the State — ^This objection ought to be, as far as possible, guarded against ; hence a manufactured commodity ought to be taxed in preference to the raw material — A tax on a manufactured commodity is objectionable, because it necessitates the enforcement of vexatious regulations by Government officers — It is intended that import and excise duties should be paid by the con- sumers, but an export duty is supposed to be mainly paid by foreigners— This, however, rarely happens: such a duty usually diminishes the export trade of a country, and thus decreases her national wealth— it would be most disastrous for England to impose an export duty on silk goods, because, as far as this branch of industry is concerned, we should be unable in foreign commerce to compete with other countries— The theory of intematibnal trade proves the impolicy of protective duties — Landowners are the only Digitized by
Google