Chap。III
HowproportionalTaxesaredrawnbackbytheIndustriousandhowthatdrawingbackistheonlyreasonwhyTaxesraisethePricesofCommoditiesWhatperplexesournotionsinthetheoryofproportionaltaxation，is，thattheindustriousman，insteadofbringinghissurplusonly，tomarket，isobligedtobringthewholeofhiswork。
Letmethereforerepresenthimasbeingcreditorupononepartofhiswork，andproprietoroftheother。Thiswilldivideit，asitwere，intotwoparts，whichIshallcallAandB。
Arepresentsthatpartuponwhichheiscreditor，andanswerstoalltheexpencehehasalreadybeenat；thatis，tohisphysical-necessary，aswehavecalledit。Thiswehavesaidoughttobeconsideredasvirtuallyconsumedbytheworkman，andifanytaxberaiseduponit，itmustbedoneinsuchamannerasnottoaffecthim；thatis，hemustdrawittotallybackfromthepersontowhomhedisposesofit。Bontheotherhand，representsthatpartofwhichheisproprietor，towit，hisprofit；andthereforemayeitherbetaxedornot，asthestateshallthinkfit。
Ifthisbetaxedinthehandsoftheindustriousman，beforeitsufferanalienation，thetaxwillbeofacumulativenature。
Ifitbeleftfreetohim，andtaxedtothepersonwhobuysit，itwillbeoftheproportionalkind，asweshallseeafterwards。
Again，Inthefirstcase，itwillcheckthegrowingwealthoftheindustriousman；inthesecond，itwillacceleratethedissipationofthebuyer。
Taxes，therefore，ofthefirstkind，arepropertobeimposedincountrieswherethestateisjealousofgrowingwealth，aswehaveobservedinthe25thchapterofthesecondbook。Ifthetax，again，belaiduponthebuyer，thenthebalancewillturninfavouroftheindustriousman，inproportiontothefullamountofB，andwillproducenoothereffectthantoacceleratethedissipationofthebuyer。
Letusnowtakeinanewcombination。
If，whenthewholeworkisbroughttomarketandsold，thepriceshallnotexceedthevalueoftheindustriousman’sA，thenheisoftheclassofthosewecallphysical-necessarians，whoaccumulatenoprofits。IfthepriceofitbelessthanA，hebecomesaloaduponthestate，abankrupttothosewhohavefedhimuponcredit，andwilldieforwant，unlesshebesupportedbycharity。
Sofarwithregardtotheseller:nextastothebuyer。
Thebuyerappearsatmarketwithhismoney。Whenhecomestherehemustgive，first，anequivalentfortheprimecostofthemerchandize:thatis，hemustrefundeveryexpencenecessarilyincurredinproducingit；thatis，hemustrefundthevalueofA。Next，theindustriousmanhasaclaimuponhimforhisprofits，viz。hisB。Thencomesthestate，whoclaimsapartofhiswealth，inregardthatheisgoingtopurchasewhathisownindustryhasnotproduced。Thisisthetax；IshallcallitC。Thistaxwillbefoundoftheproportionalkind。Itwillnotaffectthegrowingwealthoftheseller，butitwillacceleratethedissipationofthebuyer；andwillpulldownthescaleagainsthim，infavouroftheindustrious。Thisisapropertax，incountrieswherethestateobservesthemaximofsharingthewealthofthosewhodissipate。
Letusnowtakeinanothercombination。Letussupposethisbuyertobeanindustriousperson，andthethingboughttobeanecessarymaterialforthemanufactureinwhichheisemployed。
Itisnotplain，thatwhenthesecondindustriousmancomestomarkettosellhiswork，whichIalsosupposetobecomposedofhisAandhisB，thathisAbecomesastillmorecompoundedbody？Itfirstincludeshisownphysical-necessary，asabove:
Secondly，theAandBofthemanfromwhomheboughtthematerials:and，Thirdly，theCwhichhepaidtothestateforthelibertYofacquiringwhathehimselfhadnotproduced。
Whoeverthereforebuysfromthesecondindustriousman，must，inlikemanner，refundtohimhisfullA；hemustalsopayhimhisB；andthenhewillfindthestateclaimingtheirC，asintheformeroperation。
Thisbeingdone，letusexaminetheinterestsofallparties。
Thefirstindustriousmanhasnoreasontocomplainofthetax；
becausehewaspaidhisnecessaryexpenceA，andalsohisB
forhisprofit；andthestaterealisedthetaxattheexpenceofthesecondindustriousman，whopaidit。NowwesaidthatthedissipationofhiswealthwasacceleratedinproportiontothevalueofwhathepaidforC；butasheisnoneoftheidle，andasthethingheboughtwasamaterialnecessaryforhismanufacture，thesecondbuyerfindshimselfobligedtorefundthewholeamountofthefirstA，B，andC；becausethesumofthemmakesapartofthesecondman’sA。NowitistherefundingofthisCtotheindustriousmanwhichistheonlycircumstance，fromwhichproceedstheriseinthepriceofcommodities，inconsequenceofproportionaltaxes。Moreover，thesecondbuyermustpaythesecondindustriousman’sB，infavourofthebalancewhichisgoingtoturnagainsthim；andlastofall，hemustpaythesecondC，whichisthesharethestaterequiresofhim，inordertoacceleratehisdissipation。
Nowletusobserve，thatifthecommodityboughtbythesecondindustriousman，benotnecessaryfortheexistenceofhismanufacture，itcannotenterintohisA，andthereforemustbediminisheduponhisB；andifhisBcannotpayit，thenhewilloweittosomebody，andforthefuturemusteitherabstainfromsuchexpences，orleaveoffworking，infavourofthosewhocanlivewithoutthem。
Letmeillustrateallthisbyanexample。
Atannersellshisleathertoashoemaker；theshoemakerinpayingthetannerforhisleather，paysthetanner’ssubsistenceandprofit，andthetaxuponleather。
Themanwhobuystheshoesforhisownconsumption，refundsallthistotheshoemaker，togetherwithhissubsistence，profit，andthetaxuponshoes；consequently，thepriceofshoesareraised，onlybyrefundingthetaxespaidbytheindustrious。
Butiftheshoemaker’ssubsistenceshallhappentoincludeeithertavernexpences，orhisconsumptiononidledays，hewillnotdrawtheseback；becauseothershoemakerswhodonotfrequentthetavern，andwhoarenotidle，willundersellhim；hemustthereforetakehisextraordinaryexpenceoutofhisprofits；andifhisprofitbenotsufficient，hemustrunindebttothetavern-keeper。
Theextravaganceandidleness，therefore，ofparticularworkmendoesnotcheckindustry，norraiseprices；forthesewillalwaysbeinproportiontodemand，andthereisnoreasonwhydemandshouldeitherriseorfall，becauseaparticularworkmanisextravagant，orconsumesacommoditynotnecessaryforhismanufactureorsubsistence。
Fromthisexampletherearisesanewcombination:thatinproportionastheindustriousdonotconsumeoftheproduceoftheirownindustry，butcometomarketwiththewhole，andthenpurchasetheworkofothers，theyareconsidered，astotaxes，inthelightofidleconsumers，whodonotwork，butwhopurchasewithmoneythefruitsoftheindustryofothers。Bythisoperation，thetaxablefundisaugmentedbeyondtheextentofthegeneralsurpluscalledB。Thereasonisplain。Whateverisbroughttomarketissupposedtobesurplus，asitmaytherebeboughtbytheidle，aswellastheindustrious。Theonlydifferenceis，thatthefirstdonotdrawbackthetax，andthattheseconddo，aswehavealreadyshewn。
Fromthisreasoningwemayconclude，thatthewaytocarryproportionaltaxestotheirutmostextent，istodrawallcommoditiestomarket，toengageeveryonetocarrythitherthewholeproduceofhisindustry，andtheretobuywhateverhestandsinneedof。
Butwhichwaywillyouengageeitherafarmertosellhiscrop，andbuysubsistencefromanother；orashoemakertosellhisown，andbuyhisneighbour’sshoes？Thethingisimpracticable；andwereitattempted，itwouldproveanarbitraryproceeding，andacumulativetaxlaidupontheirindustry:ataxwhich，bythenatureofit，theycannotdrawback，asweshallpresentlysee，andfromthiscircumstancealoneproceedsthewholeoppressionofit。
Letmenextanalizethepricepaidbythelastbuyer，whomwehavecalledtherichandidleconsumerofthemanufacture，whocandrawnothingbackfromanybody。
Isitnotcomposedofthewholevalueofthesubsistence，ofthework，oftheprofits，ofthetax？Thewholereimbursementofallformerpaymentsandrepaymentscomesuponhim。Thosewhohavebeenatalltheexpence，appearinthelightofhisservantsandagents，whohaveonlyadvancedmoneyuponhisaccount。
Howabsurd，therefore，isiteithertosay，thatalltaxesfallultimatelyuponland；orasothers，fornobetterreason，pretend，thattheyfallupontrade。Isay，thatthisclassoftaxeswhichIhavenowbeendescribing，andwhichIshallstillmorefullyexplaininasubsequentchapter，nevercanfalleitherupon，oraffectanypersonbuttheidle；thatistosay，thenotindustriousconsumer。Iftherebefoundapossibilityforanyconsumertodrawbackthetaxhehaspaid，Isayheisoftheclassoftheindustrious，inonewayorother:andfartherIsay，thatsuchataxraisesthepriceofthecommodity。Butbydrawingback，Iunderstand，thattherepaymentisaninseparableconsequenceofhishavingpaidthetax。Idonot，forexample，saythataplace-mandrawshistaxesbytheemolumentsofhisoffice:butIsayabrewerdrawsbackhisexcisebythesaleofhisbeer。
Letthisprinciplealsoberetained，thatwithrespecttotheconsumptionofsuperfluitiesbythemanufacturingclasses，theyalsomustbeconsideredasbeingoftheclassoftherichandidle，asmuchasthefirstDukeinEngland。Whenthereforetheextravaganceofthemanufacturingclassesbecomesgeneral，andwhentherateofthemarketcanaffordthemgreatwages，relativelytothepriceofnecessaries，suchprofitsconsolidateintothepriceofthemanufacture，accordingtotheprincipleslaiddowninthe10thchapterofthesecondbook。Thestatesmanthenmustendeavourtocreateacompetitionamongthem，byintroducingfreshanduntaintedhandsintosuchbranches。Thiswillbeasurecheckuponthedissipationoftheindustrious，and，ifrightlyapplied，willpreventallfrauds，allpretencesfortheriseofthepriceoflabouronaccountoftaxes:and，ifcarriedtoitsfullextent，willpreventanyindustriouspersonfromenjoyingeitheraday’sidleness，orthesmallestsuperfluity；exceptinconsequenceofhispeculiardexterity，orextrinsicadvantages。
Chap。IV
OfcumulativeTaxesIshallnothererepeatwhatIhavealreadysaidconcerningthecharacteristicsofthiskindofimposition；butaftercitingsomeexamples，Ishallexamineitmoreclosely，astoitsnatureandconsequences。
ThemostfamiliarexamplesofittoanEnglishman，aretithes，land-tax，window-tax，andpoors-rates。
ThemostfamiliarexamplestoaFrenchman，aretheTaille，Fourage，andUstencil，whichgocommonlytogether；alsotheCapitation，theDixieme，theVingtieme，andtheIndustrie。3*
Thenatureofallthesetaxes，is，toaffectthepossessions，income，andprofitsofeveryindividual，withoutputtingitintheirpowertodrawthembackinanywaywhatever；consequently，suchtaxestendverylittletowardsenhancingthepriceofcommodities。
Thosewhocomeundersuchtaxes，donotalwaysconsiderthattheirpastindustry，gains，oradvantagesoffortune，arehereintendedtosufferadiminution，infavourofthestate；forwhichout-goingtheyhave，perhaps，madenoprovision。
Whenpeopleofthelowerclasses，insteadofbeingsubjectedtoproportionaltaxes，arelaidundersuchimpositions，thereresultsagreatinconvenience。Theyareallowedtoreceivethewholeprofitoftheirindustry，whichintheformerchapterwecalledtheirB，thestatehoweverreservingtoitselfaclaimforapartofit:this，insteadofbeingpaidgradually，asinaproportionaltax，iscollectedattheendoftheyear，whentheyhavemadenoprovisionforit，andconsequently，theyareputtodistress。
Besides，howhardisittodeprivethemofthepowerofdrawingbackwhattheypay？Andhowilljudgedtotrustmoneywiththosewhoaresupposedtogainonlyaneasyphysical-necessary？Anequivalentforprocuringthearticlesofeaseandluxury，shouldnotbeleftinthehandsofthosewhoarenotpermittedtoenjoythem。
Fromthiswemayconclude，First，Thatthemoresuchtaxesareproportionaltothesubjecttaxed；Secondly，themoreevidentthisproportionappears；andThirdly，themorefrequentlyandregularlysuchtaxesarelevied；themoretheywillresembleproportionaltaxes，andthelessburdenwillbefoundinpayingthem。Letmeillustratethisbysomeexamples。
Thestoppageuponasoldier’spay，eitherfortheinvalids，orChelsea，isacumulativetax；butthemethodoflevyingitgivesitalltheadvantagesofoneoftheproportionalkind。
First，Itbearsanexactanddeterminateproportiontothevalueofhispay。Secondly，Thisproportionheknowsperfectly。AndThirdly，Insteadofreceivingthewholeintohisownpossession，andpayingthehospitalattheendoftheyear，itisregularlyandgraduallyretainedfromhimateverypayment。
Tithesareacumulativetax；buttheyareaccompaniedwithallthethreerequisitestomakethemlight；althoughinotherrespectstheyareexcessivelyburdensome。First，Theybearanexactproportiontothecrop。Secondly，Thisproportionisperfectlyknown。Thirdly，Nature，andnotthelabourer，makestheprovision。Buttheyfalluponanimproperobject:theyaffectthewholeproduceoftheland，andnotthesurplus；whichlastistheonlyfundthatoughttobetaxed，ashasbeensaid。
Theland-taxinScotlandbears，First，averydeterminateproportiontothevaluationoftheland；andhas，Secondly，theadvantageofbeingwellknowntoeverycontributor。，sothatprovisionmayeasilybemadeforit。Butthethirdrequisiteiswanting:theproprietorhavingthepublicmoneyinhishands，oftenappliesittoprivatepurposes；andwhenthedemandismadeuponhim，heisputtodistress。
Thetaille，inmanyprovincesofFrance，bears，first，averyexactproportiontothevalueoftheland。4*
Butinthesecondplace，theproportionisentirelyunknowntothemanwhopaysit；beingnowheretobeseenbutintheofficesoftheintendantandhisdeputies。
Andinthelastplace，thewholepaymentcomesatonce。
Whathides，andconsequentlydestroysthisproportionwithrespecttotheFrenchtailletariff閑，is，thatifafterthefirstdistributionislaidon，asinScotland，atsomanyshillingsinthepoundofvaluation，thefullsumintendedtoberaiseddonotcomein；eitherbecausetheintendanthasgivenexemptionstocertainparishes，onaccountoftheaccidentsofsterility，hail，mortalityamongthecattle，andthelike；orbecausethepropertyofapartoftheparishhasfallenintothehandsofpeopleexemptedfromthetaille；orlastlythatothers，whowerereallyboundtopayapartofit，arebecomeinsolvent。
Theintendantmustthenmakeasecond，andperhapsathirdgeneraldistributionofthedeficiencyuponalltheformercontributors，inthemostexactproportionindeedtothevaluationofthelands，butyetbythenatureofitimpossibletobeforeseen。Itisforthesereasonschieflythatthetailleinthatkingdomissogrievous。
Theseseconddistributionsofthetax，First，destroytheproportionbetweenthetaxandtherevenuetaxed。Secondly，Theymakeitimpossibletojudgeoftheamountofthem。Andlastly，thedemandcomesatonce，when，perhaps，themoneyhasbeenotherwiseapplied。
TheFrenchtaxuponindustryismoregrievousstill；becausenoneofthethreerequisitesabove-mentionedareallowedtooperate。
Thistaxissupposedtobeproportionaltotheprofitsmadeupontrade，andotherbranchesofindustry，nothavingthelandfortheirobject。Allmerchantsandtradesmen，incities，andinthecountry，paythetaxcalledIndustrie；andthereasongivenforestablishingthistax，asIhavesaidinanotherplace，isinordertomakeeveryindividualinthestatecontributetotheexpenceofit，inproportiontotheadvantageshereaps。Nothingwouldbemorejust，coulditbeputinexecution，withoutdoinggreaterhurttothestate，thantherevenuedrawnfromitcandogood。
Ishallnowshewhow，inthistax，allthethreerequisiteswehavementionedarewanting。
First，byitsnature，itcanbearnoexactproportiontotheprofitsoftheindustriousman；sincenobodybutthepersontaxedcansomuchasguessattheirextent。
Secondly，Itcannotpossiblybeprovidedfor，asnocheckcanbeputupontheimposer，unlessasfarasgeneralrulesarelaiddownforeachclassoftheindustrious；andfromtheseagainotherinconveniencesflow，asshallbeobserved。
Thirdly，Itcomesatonceuponpoorpeople，whohavebeenfrequentlyforcedtobegforwantofemploymentbeforethetax-gatherercouldmakehisdemand；andthosewhoremain，frequentlybecomebeggarsbeforetheycancomplywithit。
Isay，thatfromthegeneralruleslaiddownforregulatingthistax，astoeveryclass，aworkmanwhohasalargefamilytomaintain，isnolesstaxedthanonewhohasnochargebuthimself:anditwillbeallowed，Ibelieve，thattheprofitsofoneindustriouspersonofthelowerclasses，isinnocountrysufficienttopayanyconsiderabletax，andmaintainalargefamily，muchlessasicklyone。Ithereforeimagine，thatcumulativetaxesnevershouldberaiseduponsuchclassesofinhabitantsashavenoincomebuttheirpersonalindustry，whichissofrequentlyprecarious。
Merchantsalsooughtnottobesubjectedtoanytaxupontheirindustry。Theyoughttobeallowedtoaccumulaterichesasfastasthey，can:becausetheyemploythemfortheadvancementofindustry；andeverydeductionfromtheirprofitsisadiminutionuponthissousefulafund。
Whencumulativetaxesarelaiduponanyoftheindustriousclasses，theytendtocheckgrowingwealth；andaremostcommonlyimposedinmonarchicalstates，whererichesareapttoexcitejealousy，ashasbeenobserved。
Butastotheclassoflandproprietors，thatistosay，themorewealthyinhabitants，wholiveuponarevenuealreadymade，theimproprietyofcumulativetaxesismuchless。Theyarehoweverburdensome，anddisagreeableinallcases，andoughttobedispensedwith，whenthenecessarysuppliescanbemadeoutbyproportionaltaxes，withoutraisingthepricesoflabourtoohighfortheprosperityofforeigntrade。
FromtheexamplesIhavegivenofthisbranchoftaxation，I
hopethenatureofitmaybefullyunderstood，andthatforthefuturenoinconveniencewillarisefrommyemployingthetermofcumulativetax。
Ishallnowsubjoinitsdefinition。Acumulativetax，istheaccumulationofthatreturnwhicheveryindividual，whoenjoysanysuperfluity，owesdailytothestate，fortheadvantageshereceivesbylivinginthesociety。Asthisdefinitionwouldnothavebeenunderstoodatsettingout，Ithoughtitproper，first，toexplainthenatureofthethingtobedefined。
Chap。V
OftheInconvenienceswhichproceedfromproportionalTaxes，andoftheMethodsofremovingthemAproportionaltax，asIhavesaid，isthatwhichisleviedupontheidleconsumer，atthetimehebuysthecommodity。andwhile，byconsumingit，thebalanceofwealthisturningagainsthim，infavouroftheseller。Thistaxisconsolidatedasitwerewiththepriceofthecommodity，andmustofnecessityraisethepriceofit。
Isay，itisleviedatthetimeofbuying，andaffectsthebuyer，inconsequenceofhisconsumption；becausewehaveseen，thatwhenthecommodityisnotconsumedbythepurchaser，thenuponasubsequentalienationheisrefundedallhepaid。I
considerhimtherefore，inthiscase，notaspaying，butasadvancingtheamountofthetaxforanother；andwhileanypartofthecommodityremainsunconsumed，therestillremainstheequivalentforaproportionalpartofthetaxinthehandsofhimwhoadvancedit。
Ishallnowproceed，asintheformerchapter，bygivingsomeexamplesofsuchimpositions；andinexaminingthem，endeavourtoshewtheirnatureandconsequences。
ThemostfamiliartoanEnglishmanare，excises，customs，malt-tax，stamp-duties，andthelike。
ToaFrenchmanthegabelle，thetraittes，theaides，tobacco，etc。5*
Inallkindsofthisimpositionwefindthetaxregularlyreimbursedfromhandtohand；itadheressocloselytothecommodity，thatitbecomesasessentiallyapartofthevalue，ascarriage，packing，andthelikeincidentcharges，enterintothepricesofgoods。Itnevercanaffecttheindustriouspersonwhodoesnotconsume；andnevercanbeavoidedbyhimwhodoes。Suchtaxesthereforenecessarilyraisethepriceofthecommoditytaxed。
Havingalreadypointedouttheprincipaladvantagesofproportionaltaxes，whichistothrowthewholeoftheburdenupontherich，whomwehavecalledtheidleconsumers，thebettertodistinguishthemfromtheopulentclassoftheindustrious；I
mustnowenumeratetheprincipalinconveniencescomplainedof，fromthismodeoftaxation，andtraceouttheprinciplesfromwhichtheymaybeascertainedandremoved。
Theprincipalinconveniencesallegedagainstproportionaltaxesmaybereducedtothree:
First，Thattheyhavetheeffectofraisingthepriceoflabour，andtheproduceofindustry，andtherebyprovehurtfultotheprosperityofforeigntrade。
Secondly，Thattheydiscourageconsumption，bycarryingthepricesofmanythingstoohighforpeopleofamiddlingrankinlife。
Thirdly，Thattheyarebothexpensiveinthecollection，andoppressive，fromthemanyrestrictionsputuponliberty，inordertopreventfrauds。
Inanalyzingeveryoneoftheseinconveniences，itwillbepropertoinquire，howfartheconclusionsagainstthosetaxesaredrawnfrom，andsofarasmatteroffact；howfarfromplausibleappearancesonly；theyarereal，notimaginary，todiscoverthemethodsofremovingthem。
Asthefirstinconveniencearisesfromtherisingofthepriceofallkindsoflabour，andconsequentlyofmanufactures，I
mustdistinguishbetweentheconsequenceofraisingpricesathome，andofraisingthemuponarticlesofexportation；andI
mustconsidertheoneandtheotherrelativelytothecollectivebodyofastate，andnottosomefewindividualsinit。
Highpricesathomearenodiscouragementtotheindustrious，mostcertainly，howeverdisagreeabletheymayprovetoconsumers；
andwhiletheystandhigh，itisaproofthatthedemandoftheconsumersdoesnotdiminish。
Highpricesupongoodstobeexported，aretobejudgedofbytheproportiontheybeartothoseinothercountries。
Nowthepriceofamanufacturer’swagesisnotregulatedbythepriceofhissubsistence，butbythepriceatwhichhismanufacturesellsinthemarket。Couldaweaver，forexample，liveupontheair，hewouldstillsellhisday’sworkaccordingtothevalueofthemanufactureproducedbyit，whenbroughttomarket。Aslongashecanpreventtheeffectsofthecompetitionofhisneighbours，hewillcarrythepriceofhisworkashighasisconsistentwiththeprofitsofthemerchant，whobuysitfromhiminordertobringittomarket；andthishewillcontinuetodo，untiltherateofthemarketbebroughtdown。
Itisthereforetherateofthemarketforlabourandmanufactures，andnotthepriceofsubsistence，whichdeterminesthestandardofwages。Wereproportionaltaxestoraisethepriceofsubsistence，andbythatcircumstancetodiscouragemanufacturesweshouldseethegeneralityofworkmenlivingwithsobriety，deprivingthemselvesofsuperfluity，confiningthemselvestotheplainbutsufficientphysical-necessary，workingwithalltheassiduityamancansupport，andstillnotbeabletosupplythemarketattheordinaryrates。
Wheninanycountrytheworkofmanufacturers，wholiveluxuriously，andwhocanaffordtobeidlesomedaysoftheweek，findsareadymarket；thiscircumstancealoneprovesbeyondalldispute，thatsubsistenceinthatcountryisnottoodear，atleastinproportiontothemarketpricesofgoodsathome；andiftaxesonconsumptionhave，infactraisedthepriceofnecessaries，beyondtheformerstandard，thisrise，cannot，infact，discourageindustry:itmaydiscourageidleness；andidlenesswillnotbetotallyrootedout，untilpeoplebeforced，inonewayorother，togiveupbothsuperfluityanddaysofrecreation。
Peopleareveryapttodrawconclusionsfromwhattheythinkoughttobe，accordingtotheparticularcombinationstheyformtothemselves；andforthisreasonitisgenerallythought，becausetaxesarehigherinEnglandthaninsomeothercountries，thatforeigntradeshouldthereforebehurtbythem。Buttheslothandidlenessofman，andthewantofambitioninthelowerclassestoimprovetheircircumstances，tendsmore，Isuspect，tolessentheproductionsofindustry，andthustoraisetheirprice，thananytaxuponsubsistencewhichhasbeenhithertoimposedinthiskingdom。
Thewholeofthisdoctrineisprovedbyexperience，andisconfirmedbyournaturalfeelings。Manyhavebeenamazedtoseehowwellthemanufacturingclassesliveinyearsofscarcity，whichfrequentlyhavetheeffectofdoublingthepriceofthemostnecessaryarticlesofsubsistence。Aretheynotfound，inbadyears，moreassiduousintheirlabour？Dotheythenfrequentale-houses，asintheyearsofplenty？Aretheyfoundidleonehalfoftheweek？Whyshouldataxlaidonbythehandofnatureprovesuchaspurtoindustry；andanother，similartoitinitseffect，laidonbythehandofman，producesuchhurtfulconsequences？Wereacourseofbadyears，Idarenotsayanincreaseoftaxes，tocontinuelongenoughtobringmanufacturerstoahabitofsobrietyandapplication，areturnofplenty，andlowprices，wouldthrowintotheircoffers，whatmanyofthemdissipateinriotandprodigality。
Eventhisconclusionwillbetoogeneral，ifeverycircumstancebetakenin。Manufacturersthereare，whoworkhard，andlivesoberlysixdaysoftheweek，andwhoattheendfindlittlesuperfluity，notwithstandingthehighpriceoflabour。
Alas！theyhavemanymouthstofeed，andtwohandsonlytosupplythenecessaries。Thisisthefatalcompetitionsomuchinsistedoninthefirstbook，andbywhichadoorisopenedtogreatdistress。Eithertheunmarriedgainwhatthemarriedshoulddo，andbecomeextravagant，orthemarriedgainnomorethantheunmarriedcando，andbecomemiserable。
Theaveragebetweenthetwooughttodeterminetherateofwagesineverymodernsociety。
Theremediesforthisunequalcompetition，flowingfromthehappylibertyweenjoy，havebeenconsideredinanotherplace。
Theinconveniencehereunderexaminationwillnotberemovedbyanabolitionoftaxes；norwillitincreasebytheaugmentationofthem，aslongasmanufacturers，uponanaverage，enjoysuperfluityandidledays。
UnderthesecircumstancesIconclude，thatifforeigntradesufferbythehighpricesofcommoditiesinourmarkets，thevicedoesnotproceedfromourtaxes，butfromourdomesticluxury，whichswellsdemandathome。Werewelessluxurious，andmorefrugalinourmanagementingeneral，allclassesoftheindustrious，fromtheretailerdowntothelowestmanufacturer，wouldbesatisfiedwithmoremoderateprofits。Letnot，therefore，astatesmanregulatehisconductuponsuppositions，norconcludeanythingfromtheory，norfromarguments*priori，drawnfromthesupposedeffectsoftaxes；butlethimhaverecoursetoinformationandexperienceconcerningtherealstateofthematter。
Lethiminquirewhatarethepricesabroad；whatarethepricesathome；howthosewhoworkinexportablecommoditieslive；whatsuperfluitiestheyenjoy。andwhatdaysofidlenesstheyindulgein。
Ifhefindthatgoodsarenotexported，becauseofhighprices，whilemanufacturersareenjoyingsuperfluity，andindulgingthemselvesinidleness，lethimmultiplyhands，andhewillreducethemalltotheirphysical-necessary；andbythusaugmentingthesupply，hewillalsoreducethepricesinhismarketsathome。
Ifhewanttoreducepricesstilllower，infavourofexportation，butfindthathehasoccasionfortheamountofcertaintaxes，whichenhancethevalueofthisphysical-necessarytowhichhehasreducedhisindustriousclasses，thenlethimgrantabountyuponthequantityexported，morethanequivalenttocompensatetheriseofpricesoccasionedbythetaxespaidbythosewhoprovideit；andletthepeopleathomecontinuetopaydearerthanstrangers，infavourofthestate。Ifbyloweringpricesyouwishtopromoteexportationonly，therewillbenooccasiontolowerthemuniversally，anymorethanthereisoccasiontoputalargeplaisteroverthewholebody，tocureasmallwoundonaparticularpartofit。
Ihavesaid，thatwhiletherateofthemarketremainsthesame，sowillthepricesofeverypartoflabourandindustry，whichentersintothecompositionofthethingbroughttomarket。
Thisisconsistentwithreason，andexperienceprovesthetruthofit；becausewedonotseewagesfluctuatewiththepriceofliving。Iftheydonotfluctuateinthatproportion，howcanweconcludethatariseinthepriceofsubsistence，occasionedbytaxes，shouldraisewagesmorethanwhenthepriceisraisedbyanaturalscarcity。Itmaybeanswered，thattheimpositionofataxgivesageneralalarm；theeffectitmusthaveuponpricesisimmediatelyfelt；andmanufacturerstheninsistuponanaugmentationoftheirwages:whereas，whennatureeitherproducesthesame，orevenagreatereffect，peoplesubmittowhattheythinkcomesfromthehandofGod，andcontentthemselveswiththehopesofbettertimes。Ishallallowtothisargumentallitsforce。
ButImustobserve，thatwhenmanufacturerscanthuscapitulatewiththeiremployers，andcaninsistuponanaugmentationoftheirwages，thedemandofthemarketmustbegreaterthanthesupplyfromtheirwork。Thisisthecircumstancewhichraisesthepriceoflabour。Letthedemandofthemarketfall，thepricesoflabourwillfall，inspiteofallthereasonswhichoughtnaturallytomakethemrise。Theworkmenwillthenenterintoahurtfulcompetition，andstarveoneanother，ashasbeenoftenobserved。Letthedemandofthemarketrise，manufacturersmayraisetheirwagesinproportiontotheriseofthemarket；theymay，inthecheapestyears，enjoythehighestwages；drinkonehalfoftheweek，andlaughattheiremployer，whenheexpectstheyshouldworkforless，inordertoswellhisprofitsintherisingmarket。
Ihaveendeavouredtothrowthisquestionintodifferentshapes，thebettertoapplydifferentprinciplestoit；anduponthewhole，Imustdeterminethatproportionaltaxeswill，First，Undoubtedlyraisethepriceofeverycommodityuponwhichtheyareproperlyandimmediatelyimposed；andiftheybelaiduponbread，andotherarticlesofnourishment，theywilldirectlyraisethepriceofthesearticlesinproportion；butthepriceoflabourwillberaisedconsequentlyonly，andaccordingtocircumstances。
Thatiftaxesbelaidupontheday’slabourofaman，theywillraisethepriceofthatday’slabour。WhatImeanbythis，is，thatifeveryonewhoemploysamanforaday，wereobligedtopayapennytothestate，forapermissiontoemployhim，theemployerwouldchargeapennymoreatleastupontheday’sworkperformedbythelabourer。Wereataxequivalenttoitlaidonthelabourerbytheyear，itwouldbeofacumulativeandarbitrarynature，andwouldnotraisethepriceofhiswagesinproportion；butwereitlaidupontheworkmanatapennyaday，andlevieddaily，inthiscase，hemightraisehiswagesinproportion。Butthisisnotthepracticeanywhere。
Secondly，Thepriceofsubsistence，whetheritbeinfluencedornotbytheimpositionoftaxes，doesnotdeterminethepriceoflabour。Thisisregulatedbythedemandforthework，andthecompetitionamongtheworkmentobeemployedinproducingit。
Thirdly，Ifwagesrisebeyondthephysical-necessaryoftheworkman，theymaybebroughtdownbymultiplyinghands，butneverbyloweringthepriceofnecessaries；becauseeverymanwillmakeaprofitofthelowprice，butwillregulatehisgainbytherateofdemandforhislabour。
Fourthly，If，therefore，thepriceofhisphysical-necessaryberaiseduponhimbytheeffectoftaxes，hemustworkthehardertomakeitup。
Fifthly，Ifhandsincrease，afterheisreducedtohisphysical-necessary，thewholeclassofthemanufacturerswillbeforcedtostarve。
Sixthly，Theincreaseofhandsmeansnomorethantheaugmentationofthequantityofworkproduced。If，therefore，thesamehandsworkmorethanformerly，itisthesamethingasiftheirnumberswereincreased。
Fromthesepositionsitseemstoresult，thatwheneveritisfoundthatmanufacturersenjoywagesmorethaninproportiontotheirphysical-necessarythroughtheyear，reckoneduponthegeneralaverageofmarriedmenandbatchelors，themethodforreducingthemtotheproperstandard，iseithertomultiplyhands，ifyouwanttoreducepricesinyourownmarket，ortoaugmentthepriceoftheirphysical-necessary，ifyouwouldhavethemremainthesame。Whenthehandsemployedarereallydiligent，andpricesstilltoohigh，thenitmaybeexpedienttoincreasetheirnumbers，providedtheyenjoyconsiderableprofits。
Thiswillcutoffconsolidatedprofits，andlowerthepriceofcommodities；becauseitwillaugmentthesupply。
Whenthehandsemployedarenotdiligent，thebestexpedientistoraisethepriceoftheirsubsistence，bytaxingit。Bythisyouneverwillraisetheirwages，untilthemarketcanaffordtogiveabetterpricefortheirwork。If，whentheyarebroughttobefullyemployed，youwouldhavethepriceoflabourtosinkuniversally，youmusttakeoffsomeoftheimpositionswhichaffectsubsistence，andatthesametimegraduallythrowinfreshhands，inordertopromotecompetition，whichalonewillforcethemtolowertheirpricesinproportion。Thewholedelicacyofthisoperationistopreventcompetitionamongtheindustriousfromtakingplaceaftertheyarereducedtomoderateprofits；andtopromotecompetitionamongthem，ortoraisethepriceoftheirsubsistence，untiltheybebroughttotheproperstandard。Havinginsistedsofullyupontheseprinciplesinthexviiithchapterofthesecondbook，Ihererefertoit。
Ihavesaid，thatthepriceofworkisnotregulatedbythepriceofsubsistence，butbythepriceofthemarketforthework。NowIsay，thatthepriceofthemarketmayinagreatmeasurebeinfluencedbythepriceofsubsistence。Thisisanewcombination。
Thefirstpropositionisundeniable。Thepriceofthemarketatalltimesregulatesthepriceofwork；becauseitregularlymakesitfluctuate，inproportiontoitsownfluctuations。Theprice，again，ofsubsistenceinfluencesitonly；becausetwocircumstancesmaydestroyitseffect。Ahighdemandforworkwillraisethepriceofwagesinyearsofplenty；alowdemandwillsinkthepriceofwagesinyearsofscarcity。Whenthereforeitissaid，thatthepriceofsubsistenceinfluencestherateofmarkets，weonlymean，thattheaveragepriceofsubsistence，whengoodandbadyearsaretakentogether，haveacertaininfluenceinregulatingprices。Butthisaveragepriceofsubsistencecannoteverywhereregulatethevalueofwork，astheaveragepriceofaship’scargocanregulatethepriceofeverypartofit；becausethevariationsinthepriceofsubsistencehavenotefficacysufficienttooverbalancethevariationsinthestateofdemand。
Couldaplanbeconcerted，eithertopreservethepriceofgrainatoneuniformstandard，orwithinthelimitsof15orperhaps20percentatalltimes；andwerethistobeexecutedbytheassistanceofataxatonetime，andabountyasitwereatanother；itwouldcertainlyhaveanadmirableeffectineveryindustriousnation。Itwouldinamannertakeawaythedifferencebetweengoodandbadyears。Theindustriousfindingthemselvessubsistedatalltimesnearlyatthesameexpence，wouldnotfeelthosealternatemotivestobeidleandextravagantatonetime，anddiligentandsoberatanother。
Ihaveenlargedsomuchuponthenatureofthisfirstinconvenienceproceedingfromproportionaltaxes，thatIhaveleftmyselfverylittletosayastothesecond，whichis，Secondly，Thattheydiscourageconsumption，byraisingpricestoohighforpeopleofamiddlingrankinlife。
Inanswertothis，Imustobserve，thatalltheamountofproportionaltaxesisrefundedtotheindustriousconsumer，sofarastheyareraisedonarticlesnecessaryforhissubsistence；
andwhenheiseitheridle，orconsumesasuperfluity，heisclassedalongwiththeidleandrich。Nowiftherateofmarketpricesbehigh，relativelytotheincomeofcertainindividuals，itcanonlybebecausethesupplyofthethingstheywanttoconsumeisnotabovetheproportionofthedemandofthosewhoarericher。
If，therefore，therateofthemarketaffordsuchprofitstomanufacturersastorenderthemidleandluxurious，howcantheaugmentationoftheseprofits，bytheabolitionoftaxes，andconsequentdiminutionofthepriceofsubsistence，everdiminishthecompetitionoftherich，unlessthesupplybeaugmented？
Butifthehighpricesofourownmarketscutoffthedemandofstrangers，theneveryprinciplelaiddowninthe1othand18thchaptersofthesecondbook，mustbeappliedtobringthemdown:
andasfarastaxes，whichareimposedeithertosupplytheexigenciesofthestate，ortocutoffconsolidatedprofits，enjoyedbymanufacturersinconsequenceofourownextravagance，havecontributedeithertoraisethem，ortosupportthemwhenraised，abovetheforeignstandard，afullequivalent，inthewayofbounty，mustbegivenforthem，inordertobringtheexportationpriceofgoodsbelowthelevelofforeigncompetition。
Icomenowtothelastinconvenienceallegedagainstproportionaltaxes，towit，theexpenceofcollectingthem，andtheoppressionwhichisaconsequenceofthemanyrestrictionslaiduponliberty，inordertopreventfrauds。
Astotheexpenceofcollection，itisentirelyinproportiontothedispositionofthepeopletodefraudthepublic。
InFrance，thecollectingofthebranchesofcumulativetaxes，suchasthegeneralreceipts，comprehendingthetaille，poll-tax，&c。coststhestatenolessthan10percentortwosolsinthelivre，whichissuperaddedtothoseimpositions，inordertodefraythatexpence。WhereasinEnglandtheexpenceofcollectingtheexciseadministeredbycommissioners，whoactforthepublic，notbyfarmerswhoactforthemselves，doesnotcostabove5l。12s。6d。inthe100l。
Thismatteroffactissufficienttoprove，thatexcises，whenunderaproperadministration，arenotsoveryexpensiveinthecollectionasisgenerallyimagined；andtheywouldstillbeattendedwithlessexpence，weresomeproperalterationsmadeinthepresentmethodofimposingthem。Thiswillappearaswegoalong。
Theoppressionoflevyingexcisesdoesnot，inanyproportion，somuchaffectthosewhoreallypaythem，asthosewhoadvancethemonlyfortheconsumers。
Thisdistinctionwhichwehavealreadymade，willappearwellfounded，uponexaminingthecomplaintswhicharecommonlymadeagainstthecollectorsofthisduty。
WehaveseenhowinthetaxesuponsaltandtobaccoinFrance，therearenodutiescollecteduponthepeople；thefarmersofthesalthaveallthesaltmarshesandsaltpitsassignedtothembytheKing；noperson，notprivileged，isallowedtomakesaltfortheconsumptionofthoseprovinceswhicharesubjectedtotheGabelle。
Inlikemannerthedistributionandsaleoftobaccoisexclusivelyvestedinthehandsofthefarmers:theybuyiteitherfromGreatBritain，orfromtheDutchatsecondhand；theymanufactureitthemselves，andsellitoverallFrance，atthepricesetuponitbytheKing；andwesaw，thatduringthelastwar，theypaidthirtymillionsdown，forapermissiontoraisethepriceofit10percentduringtenyears。Thispricefixeduponthesaleoftobacco，answersexactlytowhatweknowunderthenameofassize，whichoughtconstantlytoattendallexcises:6*forwantofobservingexactlythisregulation，thepublicansandvictuallersinEnglandraisedthepriceoftheirstrongbeeronehalf-pennyperquart，inconsequenceofanadditionaldutyofthreeshillingsperbarrelimposedanno1761，whichisattherateonlyofonefarthingperquart。7*
Whenthesaleofanexciseablecommodityisvestedinacompanywhomanufactureit，byexclusiveprivilege，thewholeoppressionofcollectionisavoided；becausethecompanyitselfthenpaystheduty，andtheydrawtheirreimbursementfromproportionalprofitsonthesaleofthegoods。
Thisisthegreatestadvantageofthefarmabovethepublicmanagementofatax。
Whenexcisesarelevieduponthosewhomanufacturethecommodityexcised，theoppressionofthelawsfallsuponthemanufacturers，althoughtheyadvancethetaxonly，anddrawitbackfromtheconsumersuponthesaleofthecommodity。
Werepeopletoreflectalittle，theywouldsoondiscoverhowgreatlyitisfortheadvantageofeveryconsumerinthekingdom，thatnofraudinthecollectionsshouldpassunobserved；becausealltheprofitsarisingfromfraudsbelongtothemanufacturer，whoinrealityisthetax-gatherer，asmuchasthefarmersinFrancearetax-gatherers，whentheyselltheirsaltandtobacco。
ButasthefarmersappearinthelightofKing’sofficerswhentheyprosecuteoffenders，andourcollectorsseemtobearhardonthosewithwhomwelive，peoplefoolishlyimagine，thatwerebrewers，forexample，moregentlydealtwith，beerwouldcomethecheapertothemselves。Thisisameredelusion；becausenobrewerwhateverwillsellhisbeercheaperthaneitheranassize，ortheordinaryrateobligeshimtodo，lethisprofit，fromfrauds，beeversogreat，andhisaddressincommittingthemeversosuccessful；andthelessproductivethetaxturnsouttobeintheend，themoretheotherimpositionsuponthepeoplemustbeaugmented，inordertomakeupthedeficiency。
Ifwecomparethereforetheoppressionofexcise-lawsfeltbythosewhoadvancetheseimpositionsonly，withtheeasewhichtheconsumersfindwhoreallypaythem，wemayjudgeoftheadvantageswhichtheproportionaltaxeshaveoverthecumulative。
Theexcise，aspaidbythebrewer，isreallyofthecumulativekind。Theexcisemandemandsmoneyofhim，atatimewhennoalienationtakesplace，andperhapswhenheisnotpreparedtomaketheadvanceforhiscustomers，whomustrefundittohimwithprofit:besidesthehopesofbeingabletodefraudaredisappointed，anditisalwaysdisagreeabletobedisappointedinwhatweeitherwishorhopefor。
Wereallmankindhonest，theinconveniencesoflevyingsuchtaxeswouldbeless；butasthisisnotthecase，methodsmustbefallenupontodisappointtheintentionofcommittingfraud。Theonlywaytoaccomplishthis，is，torenderifdifficultanddangerous:butwhileeveryindividualhasalibertytomanufactureanexciseablecommodityinwhateverplacehethinksfittoenter，thatistodeclaretobesetapartforthatpurpose；wheneveryonehasalibertytosellliquors，which，uponretailonly，aresubjectedtoexciseasisthecaseinFrancemustnotcollectorsbemultipliedinproportiontotheoccupationwhichsuchpolicyimplies？Andwillnotthesecollectorsopposefraudstofrauds，inordertoprofitbythem，attheexpenceofthemerchantormanufacturer？Thiswillsowdiscordandhatredbetweentwoclassesofthesamesociety，andtherebythestateishurt。Alldiscordhurtsastate，asitdoesaprivatefamily。
Itisoutofmywaytolaydownplansforpreventingsuchinconveniences。Itwouldrequireanintimateknowledgeofeverycircumstancerelatingtothecountryforwhichtheremedyisintended。
Ishallthereforeendeavouronlytothrowoutsomeusefulhints，bymentioningtheimpositionswheretheinconveniencesinlevyingaretheleast；andbycomparingthesewithotherimpositions，wheretheoppressioninlevyingappearstobegreater，thecontrastofcircumstanceswillsuggesttheprinciplesuponwhichaplanmaybeformed。
Therearemanymorefraudsanddifficultiesincollectingexcisesinthecountrythanincities，fromthenumberofmanufacturersemployedinthem。ItisjustsowiththeaidesinFrance，fromthenumberofretailers。Thereareveryfewfraudsandlittledifficultyingatheringthemalt-tax；becausetheobjectisunwieldy，andtheplacesofmanufacturearefewer。
ThefraudsupontobaccoandsaltinFrance，donotproceedfromthosewhomanufacturethem，butfromthosewhointroduceforeigngoodstosupplytheplaceofthosemanufacturedbythecompany。Thisshewsthatexcisesshouldbemadeasgeneralaspossibleoveracountry；becauselocalexemptionsintroduce，asitwere，aforeigncountryintothecenterofastate。
Stamp-dutiesareseldomdefraudedbyforgingthestamp；butinFrance，wheretheyextendtoalmosteverydeedofalienation，thepublicisdefraudedbyprivatebargains。
Customsaredefraudedbythelibertygiventotradeineveryport；andfromthewantofconvenientpublicmagazines，toserveasaproperrepositoryforallgoodsbroughtbysea。
Itmayfurtherbesaid，ingeneral，thatfraudsaremostfrequentuponthenewestablishmentoftaxes；thatthosewhocomplainmostoftheoppressionofthem，arepreciselythosewhohavetheleastreasonforit；andthatthecauseoftheircomplaintproceedsratherfromtheinconvenienceinpayingtheirtaxeswhentheyarenotprepared，andthedisappointmentindefrauding，thanfromanyrealoppressionarisingfromthelawsofexcise:thehardshipsoftheselawsareowingtothenecessityofgeneralrulesforpreventingfrauds；andsuchruleswouldbeunnecessary，couldthelibertyofcommittingfraudsbecircumscribed。
Oneverygoodmethodofraisingproportionaltaxes，withoutgreatexpenceoroppression，whenthesituationofacountrywilladmitofit，istolevynosuchduties，butatthegatesoftownsandvillages，whichinthislightappeartobepoliticalinclosures。Atthesegateseveryproduceofthelands，andeverymanufacturenotmadeinthetown，mightpayataxuponcomingin；
everymanufacturemadeinthetown，mightpayataxongoingout:
allfruitsconsumedinthecountrymightbefree；allmanufacturesmadeandconsumedinthetownsmightbefreealso。
Ifweconsiderthequantityofexchangebetweentheinhabitantsoftownsandthoseofthecountry，andbetweentownandtown；
thisregulation，Ibelieve，willbefoundsufficienttoraisemoremoneybyproportionaltaxesthanwhatisraisedinanycountryinEurope。
Asecondmethodofdiminishingtheexpence，andalsotheburdenofproportionaltaxes，istoexactnothingofthemanufacturersofexciseablegoods，buttoprohibitthedeliveryofthemtoanyonewhodoesnotpresentapermitfromtheexciseoffice，signifyingthatthetaxhasbeenpaid。ThisisthemethodobservedintheAustrianlowcountries，whereexcisesarecarriedtoaverygreatheight。Therethetransportersorcarriersofexciseablegoods，areformedintoacorporation，andnoneelsedaretotransportthem。
Whoeverhasseentheexecutionoftheseregulationswillnotbeveryfondofthem；buttheinconvenienceswhichoccurproceedfromthepoliticalsituationofallthesetowns，thepublicdebtsofwhicharesoenormous，thattopaytheinterestofthemexciseshavebeencarriedsohighastobanishmanufacturersintothecountry，wherefewexcisesarelevied。Itisfromthecountryandmanyconsiderablevillages，whichhavenottheprivilegeofrunningindebt，thatthemanufacturesofthatcountryarecarriedon。NoindustriousmancanaffordtoliveinthetownsoftheAustrianNetherlands，excepthewhosuppliestheirconsumption；andinnoplace，Iknowof，isworksodearasthere。
Weregreatexcisesleviedthereuponthefurnishersoftheexciseablegoods，asisthecaseinGreatBritain，andwereaslittlerestraintlaidupontheirfrauds，thosedutieswouldnotproducewhattheydo；andtheoppressionwouldbeintolerable；
whereasbythepolicyestablished，nothingbutthehighpriceofgoodsiscomplainedof。Athirdmethodofavoidingbothexpenceandoppressioninlevyingproportionaltaxes，wouldbetoconfinethefabricationofallarticleschargedwiththemtocertainplacesproperlyenclosed。Werethoseundertakingsfewandlarge，werespaciousmagazinesofallsortsprepared，atthepublicexpence，inallsea-porttowns，andsurroundedwithwalls，anentirelibertymightbeallowedwithintheinclosures，andnoquestionswouldbeasked，butongoinginandcomingout。Undersuchregulationsastatewouldreapgreatbenefit。First，Therewouldbeconsiderablesavingsincollecting。Secondly，Therewouldbegreatsavingsonthenumberofhandsemployedinmanufacturing:fortymen，inalargebrew-house，makemorebeerthananhundreddisposedastheyareincountryvillages。Thisresemblestheintroductionofmachinesintomanufactures。
Theobjectionfromtheinfringementoflibertyismoreapretext，inordertofacilitatefraud，thananythingelse。Arenotthosewhomanufactureexciseablecommodities，theservantsofthestate？Aretheynoteventhecollectorsofthepublicrevenue？Withwhatfacethencantheypretendtobeindulgedinthemeansofdefraudingtheircustomersofthosetaxeswhichtheywishtoputintotheirownpockets，bywithholdingthemfromthepublic。Haslibertyanyothermeaning，butanentirepermissiontodowhateverisnotforbidbygeneralandwholesomelaws，calculatedfortheuniversalgoodofthesociety；andshallthisclassofmen，whoareenrichingthemselvesasmuchbytheprofitstheyhaveinadvancingthetaxes，asbytheirindustry，beconsideredinasfavourablealightasanotherwhoispayingacumulativetaxoutofhisincome，onefarthingofwhichhenevercandrawback？
Ifanyoneshouldmisinterpretthedoctrineofthischapter，Imustputtheminmindofmyoriginalplan，whichwastokeepconstantlyinviewthosevirtuousstatesmenwhothinkofnothingbutthegoodoftheirsubjects。Taxesandimpositionsintheirhands，arethewealthofthefatherofthefamily；whotherewithfeeds，clothes，providesfor，anddefendseveryonewithinhishouse。Theincreaseoftaxesonthissuppositionisnationaloeconomy，asshallbeafterwardsshewn；fraudsarethetheftsofservantsimpairingthepublicgood，andparticularlythemeansofself-defenceagainsttheincroachmentsofambitiousneighbours。
Asitisthedutyofeverystatesmantomakehispeoplehappyandflourishing，perhapsthespeculationsofonewhoseonlyinterestinthrowingthemuponpaperistofilluphisleisureagreeably，maysometimeorothertendtopromotesogloriousapurpose。
Chap。VI
CumulativeandproportionalTaxescomparedwithoneanother，andfartherexaminedAfterexaminingseparatelythenatureandeffectsofcumulativeandproportionaltaxes，itremains，forthemorefullunderstandingofthissubject，tocomparethemtogether；thebettertofindoutwhereintheyreallydiffer，andhowfarthedifferenceisapparentonly。
Ithasbeenobserved，thatasthepaymentoftaxesismadeinmoney，thispaymentcandiminishnopartoftheproduceofeitherland，orindustry；thewholeamountoftheseremainsentiretothesubjectsofthestate。
Taxesthenarepaideitheroutofthemoneywhichcirculatesinthepurchaseofproduceandmanufactures；oroutoftheincomearisingfromsolidproperty:fromwhichwehaveconcludedthatthoseoftheproportionalkindmustconstantlybeconfinedwithinacertainproportiontoalienation。Wehavealsoobserved，thattheimpositionoftaxesaugmentsthemassofcirculation，andmakesitrequisiteforastatesmantocontrivesomemethodforincreasingmoneyinproportiontotheirincrease。Ihopethesepropositionshaveacquiredanadditionalconfirmation，fromwhathasbeenalreadysaidintheprecedingchapters。
Wehavealsoseenhowtheamountofproportionaltaxesisultimatelytakenfromthesuperfluityoftherich，whomwehavecalledtheidleconsumers:andhowtheyareadvancedbyonesetoftheindustrious，andrefundedbyanother，untilatlasttheyfalluponthosewhocannotdrawthembackfromanybody。Theselasthavebeensaidtopaythetaxes，theotherstoadvancethemonly。
Werewethereforetosupposealldesireofdefraudingoutoftheway，weshouldfindthewholeburdenofproportionaltaxesconfinedtotheinconvenienceofadvancingtheiramountbytheindustrious，andtothepaymentofthembytherich，whichproportionallydiminishestheirincome。Wherecreditthereforeiswellestablished，wherepaymentsareregularlymadebybuyerstosellers，andwherepeopleproportiontheirexpencetotheirfreeincome，theweightofproportionaltaxeswillbeverysmall。I
appealtoexperienceforthetruthofthis。
Letusnextexaminethenatureofcumulativetaxes，aswehavecalledthem，inordertodistinguishthemfromtheothers。
Inthese，alienationisnotnecessaryatthetimetheyarepaid；fromwhichitfollows，that，inmanycases，theycannotbedrawnback。Whenamanpayshisland-taxoutofhisrent，whatremainstohimwillnotbuymoreofanythingthanifhehadpaidnothing。Nay，werethestatetoindulgehimandtakehistaxincorn，thecornwhichremainstohimwouldnotbearanadvancedprice，unlessthestateshouldexportthequantityhehadgiven；
andthenindeed，bydiminishingthesupply，itmightraisethepriceofgrainingeneral；buteveryonehavinggraintosellwouldprofitoftheriseupontheprice，aswellasthelandlord，whosesharedoesnotcommonlyamounttoonethirdofthecrop。
Butwereacumulativetaxsoleviedastopreventtheproprietorfromspendingwhatthestateintendstomakehimpayoutofhisincome，hewhopaysitwouldtherebyacquireonegreatalleviationofhisburden。
Ihavesaidthatwhenabrewerpaystheexcise，thetax，astohim，isofthecumulativenature。Itissoinacertaindegree，nodoubt，asmaybeseenwithoutfartherexplanation；butitstillsofarretainsitsownnatureastobeeasilydrawnbackfromtheconsumer。ButhowcanasoldierdrawbackthetaxhepaystoChelsea？
Fromthismaterialdistinctionbetweenthetwoimpositions，I
conclude，thatnoobjectioncanlieagainstproportionaltaxes，sofarastheyaffecttheindustrious；becausetheydrawthemcompletelyback:andthatgreatobjectionslieagainstcumulativetaxes，whentheyaffecttheindustrious，becausetheycannotdrawthembackatall；andconsequently，theymayaffectthephysical-necessaryofthecontributor，incasenoprofitshouldremaintohimuponhislabour。Ontheotherhand，Ithinklittleobjectioncanbemadetocumulativetaxes，whentheyareimposeduponpossessions，whichproduceavisibleannualrevenue，cleartotheproprietor。ThisisthenatureofthedixiemesandvingtiemesinFrance；wherethewholeamountoftheperson’sincomeistakenuponproperproof，andtaxedinproportiontoit，withoutanysubsidiaryorsecondlevy’stakingplace，tomakeupadeterminatesum。
Cumulativetaxeswouldalsobefarlessburdensometothelowerclass，couldtheybelevied，soas，first，topreservetheproportionofthemtotheactualprofitsonindustry:secondly，tomakethatproportionsensibletothepeople:andinthelastplace，toretainthetax，insteadofallowingthemfirsttoreceiveit，andafterwardsobligingthemtorefundit。
Inproportionasthesethreerequisitesdonottakeplace，suchtaxesbecomegrievoustoallwhohavenofixedincome。
Toputataxuponaman’sdwellinghouse，inproportiontoitswindows，orhearths，whenthehouseproducesnofixedincometohim，andwhenhehasnoneindependentofit，maytakeawayapartofhisphysical-necessary。Toputataxuponhishead，ismoregrievousthantoputataxuponhishands，inproportiontowhattheydailygain。
Ifcumulativeandproportionaltaxesbecompared，withrespecttotheinfluencewhichtheyseverallyhaveuponouropinionsastotaxesingeneral，wefindthatbothofthemdeceivethecontributors，butindifferentways。
Inthecumulativetaxes，thepersonwhopaysdoesnotalwaysperceivethereasonofhispaying。Heimaginesthatheistaxedmerelybecauseitisknownthatheisabletopayacertainsum。
Intheproportional，thedeceitisofanothernature。Whenapersonbuysaconsumablecommodity，whichhaspaidanexcise，hedoesnotperceivethatthepricehepaysforitcomprehendsataxuponhispastgains，infavourofthepublic；butheconcludesthewholetobenecessary，inordertoprocurewhathehasaninclinationtoconsume。Anexamplewillmakethisplain。
Supposeataxlaiduponwheelcarriages，andthateverypersoninthestatewereliabletopayacertainsuminproportiontothenumberofcarriageshehasforhisconvenience。
Thetax-gatherercomesattheendoftheyearanddemandsthesum。Thepersoncomplainsthatheisnotatlibertytohaveacoachorachaisewithoutpayingdutyforit；andthatwhilehehasoccasionforonecarriageonly，andhasbutonepairofhorses，heisobligedtopayforseveralsetsofwheels。
Nowsupposethiscumulativetaxwereturnedintoaproportionalone，andthatwheelsweretopayastamp-duty，orthelike，inthehandsofthewheelwright。Thepriceofthemwouldimmediatelyrise。butthisrisewouldsoonbecomefamiliartothemanwhohasthecarriage；andhewouldthenbenomorehurtbythisadditionalexpence，thanifithadproceededfromsomenewandexpensivefashionofwheels；inshort，wheelswouldgenerallybegintobearanadvancedprice，andverysoonnobodywouldenquirehowitcameabout，noroncecomplainofthetax。
Tosetthisinanotherlight，thedifferencebetweenthetwoimpositionsresemblesthatbetweenlongandshortaccounts，whichtopoorpeopleisverygreat。Whentheexpenceoflivingisinsensiblyanduniversallyaugmented，bytheeffectofproportionaltaxes，thentheindustriousman，whoenjoysneithersuperfluityoridleness，mayandcanaugmentthepriceofhisworkinproportion。ThisaugmentationformsthenapartofwhathasbeencalledhisA，whichhedrawsfullybackwhenhecomestomarket。Butifthesame，orevenalesssumberaiseduponhimbyacumulativetax，itcomesuponhimattheendoftheyear，orattheendofthequarter，andlethimbeeversoprovident，hecannotdrawitback，orraisethepriceofhiswork，becauseoftheunequalcompetitionofotherpeopleofhisownclass，whofromavarietyofcircumstances，cannotallbesoequallyloadedbythecumulativeasbytheproportionaltaxes。Besides，theymaynotbesoprovidentashimselfandmayworkforsubsistence，withoutmakinganyallowanceforwhattheyaretopaythestateattheendoftheyear。Thusadoubleinconvenienceensues。Theindustriouspoorareoppressedbythetax-gatherers，andthetaxisilllevied。Intheothercase，thefirstneverseeatax-gatherer，andthemoneyispaid。Besidestheseadvantagesinfavourofproportionaltaxes，thereisstillanother，thatifthistaxbeimproperlylaidon，thedefectwillmanifestitselfbycheckingconsumptiononly；whereasintheothercase，itwillbeknownbythedistressalsooftheindividuals。
Ifthelibertynottoconsumebetakenaway，asinthegabelleinsomeprovincesinFrance，thentheimpositionchangesitsnatureandbecomesacumulativetax，asmaybeeasilyperceived。8*
Ithasbeensaid，thatsofarasthethreeinconveniencesofthecumulativetaxescanbeprevented，theyceasetobeoppressive。Fromwhichweseethereasonwhyexcisesaresoeasilypaidwhenthosewhomanufacturethecommoditieschargedwiththem，arecontentedtocompoundforthem。Thischangesthetaxintooneofthecumulativekind；butgivesiteveryrequisitetomakeiteasy。Letmetakeanexample。
Abrewerwhopaysexciseforallhebrews，isexposedtothedailyvisitoftheexcise-man，towhomhepaystheduty。Herethebrewer’simpositionparticipatesofseveraloftheinconveniencesattendingcumulativetaxes。Butletmesupposethatafteracertaintimehefindsthat100l。istheannualamountofhisexcise。Ifhemakeacompositionforitatthisrate，hecomesunderaregularcumulativecomposition，witheveryadvantage。Hethinksnomoreoffrauds；henomoregrudgeswhathepays；andbecomesinamannercollectorofthatimperceptibledutyadvancedbyhim，andpaidbyallhiscustomers。
Theeasymethodoftransformingthosetaxesintooneanother，shewstheirresemblancesufficiently，andthedifferenceswhichwehavepointedout，shewtheprincipleswhichregulatethepropermannerofimposingthem。
Chap。VII
ConsequencesofTaxeswhentheAmountofthemisproperlyappliedWehavenowseentheobjectsaffectedbytaxes，andtheinconvenienceswhichresulttothosewhoareobligedtopaythem。
Itcomesnexttobeexamined，whethertaxesofallkindsbenotagreatloaduponapeople，agrievousinfringementoftheirliberty，themeansofbringingmanyhonestandindustriouspeopletogreatdistress，andagreatdiscouragementtomarriage。I
answerwithouthesitation，thattaxesmaybe，andmostcommonlyareaccompaniedwithalltheseandmanymoreinconveniences；butImustadd，thattheyproceedfromtheabuse，andnotfromthenatureoftaxes。
Inmyinquiries，Ihaveconstantlyinmyeye，howmanmaybegoverned，andneverhowheisgoverned。Howarighteousandintelligentstatesmanmayrestrainthelibertyofindividuals，inordertopromotethecommongood；neverhowanignorantandunrighteousstatesmanmaydestroypublicliberty，forthesakeofindividuals。
Raisingmoneybytaxesmustalwaysbeburdensome，lessormore，tothosewhopayit；andtheadvantagesresultingfromtaxescanproceedonlyfromtherightapplicationofthemoneywhenitisraised。
Whenindividualsonlydrawaprofitfromtheinconvenienceoftaxes，thepublicloses，nodoubt；becausetaxesarepaidfortheadvantageofthepublic，notforthatofprivatepeople。Ifthemoneyraisedbemorebeneficiallyemployedbythestate，thanitwouldhavebeenbythosewhohavecontributedit，thenIsaythepublichasgained，inconsequenceoftheburdenlaiduponindividuals；consequently，thestatesmanhasdonehisduty，bothinimposingthetaxes，andinrightlyexpendingthem。
Taxes，inthislastview，maybeconsideredasasavingoutofeveryprivatefortune，inordertoprocureapublicfundtobeexpendedforthepublicbenefit。
Ihavefrequentlyrecoursetothefamiliarexamplesofprivateoeconomy，inordertomakeapplicationsfromittothepolitical；which，howeverdifferentitmayappear，willbefoundeasilydeduciblefromthesameprinciples。
Letmesupposetwopersons，AandB，livinginthesameneighbourhood，ofthesamerankandfortune，enjoyinggreatsuperfluity，butspendingyearlythewholeoftheirincomeindifferentways。
Lettheincomeofbothbesupposedtobe2100l。sterling；
andletthebranchesoftheirexpenceberangedundersixdifferentheads。LetAbesupposedtospenduponthefirst100
l。onthesecond200l。onthethird300l。onthefourth400l。
onthefifth500l。onthesixth600l。inall2100l。
LetussupposeAtoenjoyineveryoneanamplesufficiency。
B，ontheotherhand，spendsuponhisfirstarticle1600l。
anduponeachoftheotherfive，nomorethan100l。HerethefirstarticleofB’sexpenceissixteentimesgreaterthananyoftherest；andbythesupposition，100l。issupposedtodenoteanamplesufficiencyuponeacharticle。
IcometoA，andIsaytohim，youdisapproveoftheextravaganceofyourneighbourBuponhisfirstarticleofexpence，wherehespendssixteenpartsofhisincome，andwhereyouspendbutone；andyetyoumustallowthatuponeveryotherarticleofhisexpence，heisabetteroeconomistthanyou。Woulditnotbeforyourinteresttobringtheotherarticlesofyourexpencedowntohisstandard，withoutincreasinganythinguponyourfirstarticle，whichisalreadywithinthecompassofwhatmaybecalledsufficient。
Towhatpurpose，saysA，wouldyouadvisemetosostrictanoeconomy？AndwhatshouldIdowithsogreatasavingonmyannualincome？Beinnopainaboutthat。Ishalllayitoutforyouindischargingyourdebts；inprovidingforyourchildren，andgivingthemagoodeducation；inimprovingyourestate；
repairingyourhouse；makingupyourinclosures；allshallbeusefullyspent；andoutof600l。ayear，youshallhaveeverythingnecessaryforyourfamily。
Hereistherepresentationofaschemebetweenagoodstatesmanandapeoplewhoseinterestheconsults。
Aftertheimpositionoftaxes，theindividualsofastate，whohavealreadyadeterminateincome，begintopaygreatlymorethantheyusedtodoforeverythingtheyconsume。Agreatpartofthisadditionalpricegoestothepublic，andistherebylaidoutfornationalpurposes。Thewholeofsuchexpencesisthrownintocirculation，asmuchasiftherichproprietorshadlaiditoutthemselvesuponarticlesentirelyadaptedtotheirowntaste。
Isitnotevident，thatinthiswayofappropriatingtheincomeofacountry，itmustproduceamoreextensiveencouragementtoindustryofallkinds，thaniftheproprietorsonlyhadspentit？Theyneverwouldhavethoughtofbecomingmerchants，orofsettingupmanufacturesforthesupplyofforeignmarkets:theirwholeexpencewouldhavebeencalculatedtosupplytheirownwantsrealorimaginary；anditwouldhavebeenindifferenttothemwhethertheseweresuppliedbynativesorbystrangers。
Letusapplythisdoctrinetocommonexperience。Letuscomparethenatureofcirculationinatradingtown，withthatofacountryplace，wheremanygentlemenoflargefortunesreside。
Howextensivetheobjectsofthefirst！howcontractedthoseofthelatter！
Letuscompareagaintheexigenciesofgovernment，withthoseofatradingcity，whatavarietyofnewwantshereoccurtobesupplied，whichthecitynevercouldhaveoccasionfor？