TAXATION

A tax is a rate or duty laid by government on the incomes or property of individuals, or on the product! consumed by them; the produce of such duty or rate being placed at the disposal of government. A tax may be either general or particular; that is, it may either affect all cla es indiscriminately, or only one or more cla es. Taxation (Lat. taxatio) is the general term used to expre the aggregate of particular taxes. It is also the name given to that branch of the science of political economy which explains the mode in which the revenue required for the public service may be most advantageously raised. It would be quite superfluous to enter into any lengthened arguments to show the utility, or rather nece ity, of raising a revenue for the use of the public. JWyuc quiet gentium, sine arm is; neque arm a, sine stipend i is; nequt stipend i a, sine tri but is habere qucunt. (Tacit. Hist., iv., cap. 74.) It is admitted on all hands that security from foreign invasion, the speedy and impartial administration of justice, and the maintenance of good order and tranquillity, are absolutely indispensable to the succe ful exertion of industry, and to the advancement of society. And when such is the case, no individual can justly complain that he is made to contribute, in the same proportion to his means as others, for the attainment of such objects; or, which is the same thing, that he is made to pay his fair share of the sum required to procure the services of the soldiers and sailors nece ary to repel hostile aggre ion, and to support the various institutions and public functionaries required to maintain internal peace, to promote prosperity, and to protect every citizen in the undisturbed enjoyment of his property and rights. In most countries the public has frequently had to contribute larger sums than have been required for the ends of good government. But abuses of this kind obviously originate either in the misconduct of administration, or in the defective political organization of the states in which they occur, and do not, therefore, properly come within the scope of our inquiries. In treating of taxation, the object of the political economist is, not to inquire whether the revenue raised by the state exceed its nece ary wants, or whether it be judiciously expended: but to point out the effect of taxation on individual and public wealth, and, by analyzing the various methods in which a revenue may be raised and comparing them together, to show which is most advantageous,or rather which is least injurious. But as such inquiries, were they prosecuted at any considerable length, would involve discu ions nowise suited for a work of this kind, and far exceed its limits, we must confine ourselves to a few observations illustrative of the principles that should taxes. be especially kept in view in the imposition of Taxes may be either direct or indirect; that is, they maybe either imposed on the incomes or property of individuals, or on the articles on which these incomes or property are expended. But before proceeding to inquire into the nature and influence of different taxes, it may be proper to piemise the maxims laid down by Adam Smith with respect to taxes in general, inasmuch as they are drawn up with singular judgment and comprehensivene . First Maxim — "The subjects of every state ought to con tribute towards the support of the government, as nearly ns po ible 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. In the observation or neglect of this maxim consists what is called the equality or inequality of taxation." Second — " 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. When it is otherwise, every person subject to the tax is put, more or le , in the power of the tix gatherer, who can either aggravate the tax upon any obnoxious contributor, or extort, by the terror of such airura vation, some present or perquisite to himself. The uncer tainty 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, of so great importance, that a very considerable degrqe of inequality, it ap|>cnrs, I believe from the experience of all nations, is not so great an evil as a very small degree of uncertainty."Third — " Every tax ought to be levied at the time and in [s. 1232]