Taxation.

Definition.

Means by

A TAX' is a portion of the property of individuals which is taken from them by Government, and disposed of by it. A tax may be either direct or indirect. It is said to be direct when it is taken immediately from income or capital; and indirect when it is taken from them by making their owners pay for articles on which it has been laid, or for leave to use certain articles, or exercise certain privileges. A tax may be either general or particular; that is, it may either affect all classes indiscriminately, or only one or more classes.

Taxation is the act of laying on or assessing taxes. It is sometimes, also, employed to express their aggregate amount; and is the name given to that branch of the science of political economy which explains the mode in which they may be most advantageously imposed and collected.

PART I.

GENERAL OBSERVATIONS ON TAXATION.

Necessity The necessity of raising a revenue for the service of the of taxation. public is so very obvious, that to attempt to prove it by lengthened statements or reasonings would be worse than superfluous. It is enough to observe, that the ability to repel and avenge external attacks, the maintenance of internal tranquillity and good order, with the speedy and impartial administration of justice, are indispensable to the comfort and wellbeing of every man, as well as to the advancement of nations in population, civilization, and wealth. But the means by which these great ends are effected are not supplied gratuitously. The ships and fortresses, the sailors and soldiers, the judges, magistrates, and other functionaries necessary to provide for national independence and private security, cost large sums. And being required for the common benefit of all classes and individuals, it follows that these sums should be furnished by their united contributions. Hence the cardinal principle, that taxation should be equal and universal; that none should be so high or so low as not to feel its full pressure. It is contradictory to pretend that any man has any good ground for complaining that he is made to pay his fair share, be it great or small, of the public outgoings.

which security and order are effected.

It may no doubt happen, from the impossibility of exactly apportioning the burden of taxation to the means of indivi

tions on Taxation.

duals, that some may be more or less heavily taxed than General others. But at present we are only stating what is the Observageneral principle or rule with regard to taxation. And it will be afterwards seen that the unequal pressure of certain taxes is of less consequence than might be previously supposed, and is commonly balanced, either in whole or in part, by countervailing circumstances.

It is farther true that the public is frequently called upon to contribute larger sums than are required for the ends of good government. But, when such is the case, the abuse must originate either in the misconduct of administration, or in the defective organization of the state, and does not properly come within the scope of our inquiries. In treating of taxation, the political economist has not to inquire whether the revenue raised by the state exceeds its necessary wants, or is judiciously expended. His object is to point out the effect of taxation on the wealth of individuals and of the public; and, by analysing and comparing the various methods in which a revenue may be raised, to show which is most advantageous, or rather, which is least injurious.

the decline

The scheme of taxation now subsisting in modern Europe Present had its origin in the decline of the feudal system. Accord- system of ing to its principles, the lands of a country were held as fiefs taxation of the crown, on condition of their possessors performing rose out of certain stipulated services, of which the obligation to sup- of the feuport the sovereign when he took the field, with a body of dal system. retainers armed and maintained at their own expense, was by far the most important. The tenants in chief of the great fiefs, or those who held directly under the sovereign, were either originally invested with, or subsequently usurped, the prerogative of distributing justice in their respective lordships; and in those days the administration of justice, instead of being a source of expense, became, in consequence of the abuses with which it was infected, a considerable source both of influence and emolument. The clergy were partly provided for out of their own estates, and partly by a tithe levied on the estates of others. And the labour of the peasantry, during a few days before and after harvest, sufficed to put the roads and bridges into that state of repair which the depressed situation of commerce, and the little intercourse between the different parts of the country, seemed to require. It was not even necessary to levy a tax for the support of the monarch and his court. The rents of the crown estates, or of those portions of the royal demesnes, which not having been granted

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