Page:Manual of Political Economy.djvu/44

Rh Contents. xxxiii BOOK IV. TAXATION. Chapter I. On the Oeneral Principles of Taxation. Mr. Mill and others give to this portion of the subject the general title 'The influence of €k>vernment' — We think it aavisable to limit this portion of our subject to an inquiry into taxation — Adam Smith's four rules, or * canons' of taxation are the following — ist. Taxation should be equal; 2nd. Taxation should be certain in its amount; 3rd. Taxes should be levied at the time and in the mode which cause the least inconvenience to the tax -paver ; 4th. A tax ought to obtain for the Government as much as possiole of the whole amount which is levied from the tax-payer— Equality of taxation is impracticable, if it means taxing people in proportion to their means ; this illustrated by the case of two individuals possessing equal incomes, one of whom is married, and the other not — With the view of obtaining equality of taxation, it would be useless to attempt to tax people in proportion to the protection which they derive from Government— The first principle of taxation is enunciated by Adam Smith in very ambiguous language ; he affirms that when there is equality of taxation, people are taxed in proportion to their ability to pay — Equality of taxation will not be secured, if it is attempted to apply this principle to one special tax — Equality of taxation is best secured by a rough process of compensation — A consideration of the policy of reducing national debts, either by devotion of the surplus and the immediate cancelling of debt, or by the creation of terminable annuities ....pages 533 — 542 Chapter II. On Ike Income-tax, The proposal that temporary incomes should be taxed at a lower rate than permanent incomes is supported, by some persons, first upon arithmetical grounds, and secondly, upon the general principles of taxation— The arithmetical argument is conclusive, that temporary incomes ought to be taxed at the same rate as permanent incomes, if it is assumed that the income-tax is uniform in amount, and permanent — Temporary and permanent incomes ought to be taxed at a different rate, if the continuance of the income-tax could ever be restricted to a definite peri(M — Experience proves that this is impos- sible — The difficulty and expense of collectmg the income-tax would be greatly increased, if an equitable rating of temporary and perma- nent incomes should be attempted — It is generally affirmed that the income-tax ought to be so adjusted, that each person shall contribute to it in proportion to his means — This principle, even if it could be carried out, would not necessarily secure equality of taxation ; this proposition illustrated by considerins the remission of the tax upon small incomes— Various other diffictuties described, which render the Digitized by Google