CHAPTER XII.

Taxation-General observations upon the effect of taxation, with reference to the present system of Commerce-Increased production the effect of large sums of money being borrowed and expended by the Government Under the Social System taxes would be an

evil exactly proportionate to their amount.

A NATION, like an individual, can afford to pay taxes more or less, as its income is great or small. All the arguments against taxation are founded upon the supposition, that, by at least so much as government shall cease to take from us, we shall become the richer; but before we can be assured that this conclusion is logical, one of two propositions must be established, namely,—that the national income, that is, the annual produce of the labour of the people, is of a fixed quantity, or value; or else, that to reduce the taxes would have the effect rather of increasing than of diminishing the national income.

The reduction or abolition of the tax on a particular commodity, is sometimes found to

have the effect of increasing the consumption thereof to a great extent; and at first view this looks very much like proof that the annual produce of the country is increased in proportion as the taxes are diminished. It is no proof, however, of any such thing: it proves this, and this only, that, in disposing of their incomes, that is, in spending their money, mankind are governed by the desire of obtaining for them whatever they consider to be most calculated to promote their advantage and satisfaction; and as all things are produced with the view of meeting the known wants and wishes of society, every commodity falls into its respective station in the scale of supply, according to the degree in which it possesses the two qualities of desirableness and cheapness; for those things are always most in demand, which are most desired, and most easily obtained. For example,—

Now, it is evident that demand will always' be the greatest for the lowest numbers in the foregoing scale, because, while only a few persons, comparatively speaking, can be consumers of the sixth class, all, both rich and poor, must of necessity be consumers of the first. If, therefore, we take any article, the present price of which causes it to come under the denomination of six, and by reducing its price alter it to the character of three, it is certain that the demand for it will be enormously increased.

But this does not prove, nor does it form a particle of evidence, that if, instead of removing number 6 to number 3, numbers 1, 2, 3, 4, 5, and 6, each retaining its respective place, should all be reduced in money price, an increase of production would take place in any thing like the ratio before spoken of. On the contrary, it would be a change in name rather than in reality, and the annual produce of the country being regulated by totally different principles, would not, with any certainty, be increased to the amount of a single grain.

Taxation has the effect of raising the money price of commodities; but who is benefited by low prices? Not the labourer; for whilst two men are employed, and two unemployed

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are seeking for employment, the two former will be compelled by competition to accept whatever remuneration is offered them above the parish allowance. Not the tradesman ; for whilst there are more goods to sell than there are customers to buy them, the profits of trade will be sure to decrease as fast as prices can possibly fall; and if, with a stentorian voice, loud enough to be heard from one extremity of the kingdom to the other, a man were to demand of the trading classes, What, without any exception, is the greatest " evil you have had to contend with of late years?" in some very extensive trades they would answer him, with one consent, and without so much as a single dissentient voice, "A falling market; owing to which it "has uniformly happened, that the goods we "buy to-day, at as low a price as money, judgment, and a thorough knowledge of the "markets can ensure, are worth still less three “months hence; and thus, if we keep a suf"ficient stock on hand to give our customers "the advantage of selecting from an exten“sive variety, we may lay our account for a "certain annual loss of a few hundred pounds, as the unavoidable consequence of depreciation in the value of our stock." A few years previous to this period, precisely

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the reverse took place; manufactured stock was continually rising in price, and then anterior purchases had as regularly to be marked up to the new standard, as they had afterwards to be marked down to it. Thus have money makers, and money managers, the gods of the commercial world, continued to hold in their own hands the issues of commercial life and death.

The higher classes are, no doubt, benefited by low prices, whenever they can get the rents agreed for twenty years ago, and in all cases where they have fixed money incomes well secured.

The radicals, and some other political quacks, call it a libel on common sense, even to start the question, whether the taxes are now beneficial or injurious; but these gentlemen are easily answered, for most of them are abuses of machinery, and in that character they are themselves the advocates of taxation and extravagance. The contemptuous sneer with which a man is sometimes treated by his radical friends, if he happen to have any, for presuming to doubt whether taxes are at present an evil or a good, goes but a very little way towards proving that they are the former; and whoever asserts that there is no doubt about the matter in the mind of any rational