Thoughts on the mechanism of societies

Instead of laying a tax on men, from whom, without rushing with open eyes into the perpetration of a thousand injuries, it is impossible to require any thing more than a personal service, when it is necessary and possible withal; instead of taxing the land, from which nothing can be expected but food, and the rough materials to which industry can give from one to many hundred degrees of value; instead of taxing that imaginary monster called luxury, which procures so substantial a support to some, and such pleasing comforts to others, lay your tax solely, and without predilection, on all those products of national and foreign industry which are more generally consumed; then, in my opinion, you will have reason to flatter yourself that riches are taxed to their very source, and without inconvenience to any one, since you tax it in the hands of those who are, by the strictest justice, authorised to a benefit for all the advances made by them to the consumer.

So then, though the tax of 10 millions be fixed on certain parts of industry, nothing will prevent the whole from rising proportionably; and for this, God alone be thanked. The whole will be then 70 millions instead of 60;—upon which the least reflexion is sufficient to make us feel the necessity of the re-actions mentioned in the foregoing system, but with this difference, that the general consumption having been taxed, the two capitalists cannot, even on the very day when the impost takes place, shut their eyes against the justice of increasing the salary of the labouring man in a due proportion.—Now, the interest of the two capitalists could not, as in the preceding system, be preserved undiminished, but by an increase from 60 to 70 millions, that is to say, 16⅔ per cent.—Now, the interest of the labouring man is, as has been observed before, equal to one half of the other two classes in the general revenue, or, in other words, equal to either;—it will therefore become necessary, in order to restore the former equilibrium, to introduce a fresh increase of 8⅓ per cent. upon every thing;—in consequence of which the price of labour, being raised 25 per cent. just as its products, both in cultivation and industry, will leave also the two classes of labourers in the same situation they were in previous to the tax; each of them was then in possession of 20 millions out of 60, each will now get 25 out of 75.

I think also that then, a Minister of finance, ever so anxious about his operations, ever so zealous for the establishment of none but productive taxes, could not conceive a single article of consumption that might suffer by this arrangement; it would appear too evidently that every one would then have the very same faculty of consuming, manufacturing, or saving, under the denomination of 25, all that he had before consumed, manufactured, or saved under the denomination of 20.

It would also be seen then, that the success of those taxes termed productive, is not to be ascribed to the abilities of the taxator, but to the abilities of the persons taxed, who have taken care to right themselves by so much as the taxator ought to have been afraid of being unjust.

Then also would every one be sensible, that the advance in all the prices could not be only of a 12th part, or 8⅓ per cent. as in the glorious system of a poll-tax established by Divine Justice, but of 25 per cent. neither more nor less than in the system of the land-tax, neither more nor less than in the system of an exclusive tax upon luxury; that consequently wheat, as well as produce of any other sort, as well as labour which gives the whole, would be indebted to the tax for a fifth part of its new nominal value, and that 50s. would be the medium price of wheat;—its necessary price, but not more necessary in that merciless taxation, than in the merciful one laid on the exclusive consumption of the rich:—and this calls for the attention of every individual; nor can it be too often repeated, because then neither hypocrites, nor enthusiasts, nor good men, nor manufacturers, nor farmers, nor proprietors, could any longer deceive themselves or others, on the price of labour; it would be too self-evident that the said price ought to increase with the taxes, and that no one would be injured by that increase.

Then it would also appear, that some people had very good reason to say, that the burden of all taxes, falls one time or another, on the landed property; but who could refuse to admit besides, that I am tolerably founded in insisting, that when taxes have in fine reached every part of the whole, no one part can feel the weight?

The money proprietor, it will be said, the lender alone will be aggrieved; he must lose the fifth part of his usual comforts, he must pay 15 for those articles which he could procure formerly for 12.

I shall confine myself to three answers:

First, Is it not self-evident, that any financiering operation, which reduces from 5 to 4, the interest of a national debt, deprives as well the lender of the fifth part of his comforts, as if the nation had loaded herself with ten millions more, to be paid annually? (such is the present hypothesis.) There stands, therefore, between the two cases no other difference, but the palpable justice and necessity of the one, and I believe we may say, the unsuspected inutility and injustice of the other.

Secondly, We have already seen that the loss of the lender, in all cases, flows essentially from the nature of his capital; that it is inseparable from the advance of prices, whether that advance originates from an accession of wealth, or is produced by taxes, or brought on by monopoly; and that besides, by lending to the State, with the certainty that the State could not pay the interest of the loan without the assistance of an import, he has beforehand submitted to the effects of an impost indispensable to his main object.

Thirdly, If we except a poll-tax, which we should suppose laid by Divine Justice, and which, in the present hypothesis, should wrest from the lender only a twelfth part of his enjoyments, where is the system, which, in the supposition of a tax of ten millions, being now necessary in England, would not deprive him of a fifth part of those enjoyments?—We shall see presently that a compound-tax would perhaps prove still less favourable; but how much has he to dread, in all cases, from the indirect taxation of the monopoly, which it is impossible duly to estimate!