Effects of a Land-Tax.
All taxes, it is said, fall on the land at last. Land is the true, the only spring of wealth; wealth should be taxed at its very source.
It is certain, that merely by knowing how the matter stands, we know how to proceed accordingly; and that, in the long-run, every thing arranges itself in the least exceptionable manner that the system of taxation will permit. The following is probably the course which things would take, in the system of a land-tax, if itwere necessary now to lay on the land a new tax of 10 millions annually, supposing always the landed revenue at 60 millions, and the quarter of wheat at 40 shillings.
(I must premise, that in all I have now to say, not only on the present hypothesis, but on all those that follow, I build on this principle;that, from the moment every individual pays the tax, nobody pays it;that nevertheless its produce reverts to the creditors of the State, and that therefore every body is interested in carrying matters to that issue as soon as possible.—If there never existed in the average of prices any revolution so sudden, so great, and constant in its effect, as the one which I am about to suppose; it is because it never was necessary to lay all at once 10 millions of taxes. The effect produced by one million on a revenue like that whichEnglandenjoys, is so trifling, so gradual, that it never can be felt.—But to my hypothesis).
The march of industry is always firm; she can never be bewildered by her guide. A tax of 2 shillings upon a hat will soon occasion either an alteration in the quality, or a proportionate increasein its price[7].Nothing more just.But agriculture has only one resource; she cannot alter the quality of her productions, and she is always timid when she wants to increase their prices. Let it be granted, however, that the first attempt of the cultivator will be to enhance boldly the price of his goods, in a proportion which may return him the amount of the tax supposed to be of 10 millions: his wheat, of course, will rise from 40 to 46s.8d.and so with regard to other productions; then his revenue, instead of 60, will be 70 millions; but, being obliged to lay down 10 for the tax, he will have only 60 millions left.
Let us now observe, that when the operations of agriculture are talked of in consequence of taxes, the land proprietor is alluded to; and from him they suppose that the ten millions are taken, just as the fleece is shorn from the sheep; but, on the other hand, that proprietor, though not very clear in his idea of what is best for him to do, feels mechanically that he has a right to defend his fleece, that is, to increase the price of the productions of his land, because without them, neither the manufacturer nor theMinister of Finance can subsist, and to raise that price to such a level as will subject him to pay only just as much as the minister and the manufacturer: andthis again appears to me extremely just.
Now this very proprietor receives of his 60 millions revenue, or rather of the revenue of his land, no more than about 20 millions; (this is nearly the result of Mr.Young’s statement: it will be seen, in the sequel, that more or less would only alter the proportion of the shares, without having the least influence either on the application of the principle, or on its consequences): the 40 millions overplus is swallowed up,viz.for the daily pay of the labourer, 20 millions, and 20 millions for the other charges with which the estates are encumbered, tythes, profits of farmers, &c. &c. It follows, of course,
Either
That the proprietor’s share must be advanced to 30 millions, if he alone be taxed; and this will leave each of the other parts interested in the landed revenue, in possession of its 20 millions, as well after as before the tax;
Or,
That each of the three parts taxed singly, at 3,333,333l.6s.8d.and enabled to pay the impost by an advance of price, both in the productionsand in the wages of labour, be reduced to its primitive 20 millions, after the payment of the tax.
One is evidently equal to the other; but what is not so, is, thatindustry, who paid her workmen with 20 millions when the quarter of wheat was at 40s.cannot pay them since the wheat is increased to 46s.8d.but by adding to the former wages, 3,333,333l.6s.8d.an advance which, when divided on the total of her products, heretofore rated at 60 millions, raises each third part of 20 to 21,111,111, and some trifling fractions.—Now, there remains in the hands of each of the parties concerned in agriculture, only 20 millions over and above the payment of the tax.—Those who are in the persuasion that the discharge of the import must lessen, by its whole amount at least, the revenue of those who pay it, think, no doubt, that agriculture is very well off, to have, by raising the price of its commodities two thirds, lightened the weight of so terrible a burden; yet if it were possible by a vigorous exertion, by an additional increase in the price of provisions, to make it null to every body, I do not see that it would be reasonable to oppose such exertion; for, after all,
Either
The first increase, brought on byagriculture, was unjust; the proprietor was doomed to sustain alone the whole weight of the tax, if we allowthe taxator, the man who laid the tax, to have had a single thought on the subject:
Or,
The further advance in the prices of agriculture is of the most indispensable necessity, if thetaxatorhas only thought of getting the amount of the tax with the least trouble to himself, leaving to Nature the care of distributingto every onecomplete justice,—to Nature, who never fails to do it, and who, in so complicated an operation, employs only the simple spring of that private cupidity, with which she has armed and shielded every individual; just as, in order to settle the most exact symmetry in that admirable edifice commonly called a hive, she employs no other agent than the reciprocalpressureof that multitude of architects who work at it, each of whom thinks of nothing but to secure a little cell for himself.
Let us then suppose that agriculture, judiciously determined by wisdom not to suffer theleast encroachments on any part of hercell, or mechanically led by cupidity to justice, boldly raises the price of her wheat from 40 to 50s.and the rest of her products in a due proportion; her general revenues will then be increased from 60 to 75 millions; each of the three parts interested therein will therefore stand at 25 millions, but will be reduced to 21,666,666l.13s.4d.when the tax is paid off;—
Industry, compelled also by the advanced prices of the productions of the earth, to pay her workmen 25 instead of the 20 millions which they required in the first instance, will divide the additional 5 millions amongst the 60 millions of her former returns; each third share therefore, rated hitherto at 20 millions, will, by means of the addition, rise to 21,666,666l.13s.4d.—which is the exact balance of the like sum left in the hands of each of the three branches of agriculture, after having discharged the tax.
In a system of taxation which should be imposed only on the land, an impost of 10 millions annually, on a revenue of 60 millions, whether it fall on the proprietor, or be divided between him, the farmer, the cultivator, and other parties concerned, requires of course an addition of 25per cent.tothe price of the productions of the earth, that agriculture may not be sacrificed to industry; but it must be observed, that immediately after the reaction of the one upon the other shall be completed, the burden of the tax will evidently benull, sincethe price of labour will have increased equally in both, in proportion to that of their respective products.