(4.xiii.6) When the tax is levied only on cultivated land; as capital passes downwards fromthe more fertile land which has been cultivated before, to the less fertile, which has not beencultivated, the tax likewise descends. The produce to be raised must yield, not only the ordinaryprofits of stock, but the tax also; such land will not be cultivated till the price of produce hasrisen sufficiently high to yield that accumulated return. The tax, therefore, is included in theprice.
(4.xiii.7) The consequence, with regard to the landlord, is beneficial. Suppose that land ofthe third degree of fertility is the last to which cultivation has descended; that such land yields at therate of two quarters per acre, land of the next degree above it at the rate of four quarters, andland of the first degree of fertility six quarters; in this case, it is evident, that two quarters uponeach acre affords both the tax, and the remuneration to the farmer. The landlord, therefore, mayderive two quarters from the acre of second quality, four quarters from the acre of first. Hedraws this quantity of produce, in both cases; as well when such a tax is levied, as when it is notlevied. But in the case of the tax, the price is raised, and each of his quarters of corn is of greatervalue. Such a tax would, therefore, raise upon the consumers, not only so much per acre to thegovernment, but a great deal more for the benefit of the landlords.
(4.xiii.8) One effect, however, of this tax would be, to retard the descent of capital to theinferior species of land. So long as fresh doses of capital, upon the land already in cultivation, were notdiminished in productive power, to the whole extent of the tax, below what would be theproductive power of capital employed upon the best of the uncultivated land, no capital wouldbe employed upon it, and, during that interval, the cost of corn would be raised to the consumer,and additional rent would go to the landlord, without affording any revenue to the state.
(4.xiii.9) When first imposed, such a tax would have the effect of throwing an inferiorspecies of land out of cultivation, wherever an additional dose of capital, on the better land, would not inproductive power fall below that, which had gone to the worse land, to an extent equal to the tax.
This would still raise the price of corn, because, by the supposition, the last portion of capitalwould be less productive than before; it would also increase the rent of landlords, but not somuch as the full operation of the tax.
Section XIV. Taxes Upon the Transfer of Property (4.xiv.1) Taxes upon the transfer of property are of several kinds; such as stamp duties uponpurchase and sale, legacy duties, duties upon the writings required in the conveying of property,and others of the same nature.
(4.xiv.2) In the case of all that property, which is the produce of labour and capital, the taxupon purchase and sale falls upon the purchaser, because the cost of production, including the profitsof stock, must be afforded along with the tax.
(4.xiv.3) Taxes upon the transfer of land, which is a source of production, and not the effectof labour and capital, fall upon the seller; because the purchaser considers what benefit he couldderive from his capital employed in another way; and if the land will not afford him anequivalent, he will refuse to exchange it for the land.
(4.xiv.4) Legacy duties, and duties upon free gifts, fall, it is evident, upon the receivers.
Section XV. Law Taxes (4.xv.1) Taxes upon proceedings at law are levied chiefly in the form of stamps, on thedifferent writings employed in the business of judicature; and in that of fees on the several steps andincidents of the judicial procedure.
(4.xv.2) It is evident enough that they fall upon the suitors. It is equally evident that they areatax upon the demand for justice.
(4.xv.3) Justice is demanded in two cases; either that, in which it is a matter of doubt towhich of two persons a certain right belongs; or that, in which the right of some person has been violated,and a remedy is required.
(4.xv.4) There is no peculiar propriety in taxing a man, because he has a right, which,unfortunately for him, is disputed. But there is the greatest of all improprieties in taxing a man,because he has sustained an act of injustice.
(4.xv.5) It is very evident that all such taxes are a bar in the way of obtaining redress ofinjury; and just in so far as any thing obstructs the redress of injury, injustice is promoted. A tax uponjustice, therefore, is a premium upon injustice.
Section XVI. Taxes on Money, and the Precious Metals (4.xvi.1) A tax upon money cannot be conveniently levied, excepting either upon theoccasion of its coinage, or that of the first acquisition of the bullion. It might be levied upon the bullion,either upon its importation from abroad; or, if the mine were within the country, upon its issuingfrom the mine.
(4.xvi.2) A tax upon coinage is the same thing, in effect, with what has been called aseignorage.
It is the paying of something more for the coins, than the quantity of bullion of which they arecomposed.
(4.xvi.3) The effect of this is evident, when a currency consists entirely of the metals. Noman will carry bullion to be coined, unless the metal in the coin is of as much more value than thebullion, as the amount of the tax. The currency, therefore, is raised in value; that is to say, themetal in the state of currency is raised in value, to an amount equal to that of the tax.
(4.xvi.4) This is a tax which possesses the peculiar property of falling upon nobody. It fallsnot upon the man who carries bullion to be coined, because he carries it only when the coins areequal in value to the tax and bullion together. It falls not upon the persons to whom the coins arepaid as the medium of exchange; because they are of the same value to them as if they containedthe whole of the bullion for which they will exchange.
