purchase.The crown might immediately enjoy the revenue which this great price would redeem from mortgage.In the course of a few years it would probably enjoy another revenue.When the crown lands had become private property, they would, in the course of a few years, become well improved and well cultivated.The increase of their produce would increase the population of the country by augmenting the revenue and consumption of the people.But the revenue which the crown derives from the duties of customs and excise would necessarily increase with the revenue and consumption of the people.
The revenue which, in any civilised monarchy, the crown derives from the crown lands, though it appears to cost nothing to individuals, in reality costs more to the society than perhaps any other equal revenue which the crown enjoys.It would, in all cases, be for the interest of the society to replace this revenue to the crown by some other equal revenue, and to divide the lands among the people, which could not well be done better, perhaps, than by exposing them to public sale.
Lands for the purposes of pleasure and magnificence- parks, gardens, public walks, etc., possessions which are everywhere considered as causes of expense, not as sources of revenue- seem to be the only lands which, in a great and civilised monarchy, ought to belong to the crown.
Public stock and public lands, therefore, the two sources of revenue which may peculiarly belong to the sovereign or commonwealth, being both improper and insufficient funds for defraying the necessary expense of any great and civilised state, it remains that this expense must, the greater part of it, be defrayed by taxes of one kind or another; the people contributing a part of their own private revenue in order to make up a public revenue to the sovereign or commonwealth.
PART 2
Of Taxes THE private revenue of individuals, it has been shown in the first book of this Inquiry, arises ultimately from three different sources: Rent, Profit, and Wages.Every tax must finally be paid from some one or other of those three different sorts of revenue, or from all of them indifferently.I shall endeavour to give the best account I can, first, of those taxes which, it is intended, should fall upon rent; secondly, of those which, it is intended, should fall upon profit; thirdly, of those which, it is intended, should fall upon wages; and, fourthly, of those which, it is intended, should fall indifferently upon all those three different sources of private revenue.The particular consideration of each of these four different sorts of taxes will divide the second part of the present chapter into four articles, three of which will require several other subdivisions.Many of those taxes, it will appear from the following review, are not finally paid from the fund, or source of revenue, upon which it was intended they should fall.
Before I enter upon the examination of particular taxes, it is necessary to premise the four following maxims with regard to taxes in general.
I.The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.The expense of government to the individuals of a great nation is like the expense of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the estate.In the observation or neglect of this maxim consists what is called the equality or inequality of taxation.Every tax, it must be observed once for all, which falls finally upon one only of the three sorts of revenue above mentioned, is necessarily unequal in so far as it does not affect the other two.In the following examination of different taxes I shall seldom take much further notice of this sort of inequality, but shall, in most cases, confine my observations to that inequality which is occasioned by a particular tax falling unequally even upon that particular sort of private revenue which is affected by it.
II.The tax which each individual is bound to pay ought to be certain, and not arbitrary.The time of payment, the manner of payment, the quantity to be paid, ought all to be clear and plain to the contributor, and to every other person.Where it is otherwise, every person subject to the tax is put more or less in the power of the tax-gathered, who can either aggravate the tax upon any obnoxious contributor, or extort, by the terror of such aggravation, some present or perquisite to himself.The uncertainty of taxation encourages the insolence and favours the corruption of an order of men who are naturally unpopular, even where they are neither insolent nor corrupt.The certainty of what each individual ought to pay is, in taxation, a matter of so great importance that a very considerable degree of inequality, it appears, I believe, from the experience of all nations, is not near so great an evil as a very small degree of uncertainty.
III.Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it.A tax upon the rent of land or of houses, payable at the same term at which such rents are usually paid, is levied at the time when it is most likely to be convenient for the contributor to pay; or, when he is most likely to have wherewithal to pay.Taxes upon such consumable goods as are articles of luxury are all finally paid by the consumer, and generally in a manner that is very convenient for him.He pays them by little and little, as he has occasion to buy the goods.
As he is at liberty, too, either to buy, or not to buy, as he pleases, it must be his own fault if he ever suffers any considerable inconveniency from such taxes.