wages; the business man, of his profits; and the capitalist, of his interest, or rent.

Every man knows, or should know, that when he creates any kind of wealth, a share of it belongs to government. Hę, in fact, creates a fund out of which government is to be supported. For example, should a man pre-empt a section of land on the western prairies, and by his labor make it of the value of ten thousand dollars, government has a lien upon it equal to all the taxation it may choose to impose. The value of the farm is just so much less than it would otherwise be, by the burdens which it is known the government will lay upon it. For example, if the owner could sell it, free of all taxation, instead of ten thousand dollars, he could get, say, eleven thousand dollars for it. If we suppose that the annual tax imposed on the farm will be equal to the income on one thousand dollars, then the farm is worth one thousand dollars less on this account.

If the seller buys another farm, or any other property, with his ten thousand dollars, he gets it at just the same reduction as he sold his own farm; and, for the same reason, all property, whether personal or real, whether land or merchandise, is exchanged under these conditions; and therefore all parties creating wealth are placed on a level.

The paramount question, in regard to taxation, is, On what principles shall it be founded? Adam Smith, in his "Wealth of Nations," written almost a century ago, laid down four maxims, or principles, which have been so generally concurred in from that day to this, that, as J. Stuart Mill says, "they have become classic."

I. "The subjects of every state ought to contribute to the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue they enjoy under the protection of the state. In the observation or neglect of this maxim consists what is called the equality or inequality of taxation."

In examining this proposition, our first inquiry is, What is meant by "subjects"? We answer, Every inhabitant, old or young, male or female. Women? Certainly if they have a revenue or income, they are as justly bound to contribute to the government as men, and in the same proportion. Many women have large wealth: why should it go untaxed? Children? There are some such who are millionaires: why should they be exempt?

Idiots, lunatics, cripples? Yes, if they have "revenues." Many such persons have large estates, which should contribute to the public treasury.

It is not the ability to hear or see or walk that is taxed, but the income, or "revenue."

We next notice the condition mentioned, "as nearly as possible."

This implies that it may not be practicable to secure perfect equality; indeed, we know it is not, but such should be the aim of government.

II. "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 to be clear and plain to the contributor, and every other person."

(a) "Certain, and not arbitrary." By this, Dr. Smith evidently meant that the taxes should be assessed by competent authority, and upon fixed and well-known principles. In many countries, taxes have been, and in some are still, farmed out in gross to a publican, or tax-gatherer, who, under the authority of government, imposes such sums as he pleases to exact.

(b) The time of payment should be "clear and plain." The citizen should know when he pays; be conscious of the fact that he is paying the government a certain sum at the time he actually does it. Otherwise, he will be liable to great impositions, in one form or another.

(c) "The manner and the quantity plain." This for

the same reasons as just stated. He certainly ought to know how he pays, and how much.

(d) Should be known "to the contributor, and everybody else." In the method of taxation, the people are joint partners: what one does not pay, another must. If A pays less than he should, B and C must pay more; hence the right of every man to know, not only what he pays, but what his neighbor does. Otherwise, how can he judge whether he is overtaxed or not?

It is on this account that the publication of tax-lists is a duty on the part of the taxing power. Then, if any property is omitted by accident or design, it will probably be found out; for, being a copartner, each man is interested in the taxes of every other, and has a right to know what they are, and will or ought to give notice of any omission or incorrect valuation.

III. "Every tax should be levied at the time, or in the manner, which is most likely to be convenient to the contributor to pay it."

As, for example, when the harvest has been secured, and is ready for market; when the fisherman returns with his fare," &c. This, though not a very important consideraeration, will readily be admitted as proper.

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IV. "Every tax ought to be so contrived as to take out and keep out of the pockets of the people as little as possible, over and above what it brings into the treasury of the state."

Although the soundness of this principle would seem indisputable, and will doubtless be theoretically admitted by all, yet Dr. Smith proceeds to enumerate several modes in which the opposite result may be brought about.

First, By levying the tax in such a manner that a great many officers will be required for its collection, who will consume a great part of the produce of the tax. This will depend in great measure on the machinery employed in collecting the public imposts.

Second, By diverting a portion of the labor of a community from a more to a less profitable employment. For example, so heavy a tax might be laid on carriages as to reduce their use or consumption to such an extent that the manufacturer might be compelled to go into some other business less productive. This has often been done by unwise legislation.

Third, By attaching such heavy duties as to occasion smuggling, and thus create a multitude of officers to guard the revenue.

This result has often been brought about in European countries, and is now beginning to be seriously felt in the United States, under the heavy duties at present imposed.

Fourth, By subjecting the people to frequent and inquisitorial visits, and interruptions in the pursuit of business and in their domestic affairs, thus causing annoyance and dissatisfaction.

We now add still another principle, which, though not among those laid down by Dr. Smith, has been adopted in every country having any considerable taxation:

V. The heaviest taxes should be imposed on those commodities, the consumption of which is especially prejudicial to the interests of the people.

Having stated the maxims or principles which should govern the imposition of taxes, we now come to consider the different forms of taxation which have been adopted, and, to a great extent, are still in use, by the different governments of the world, in order to ascertain in how far they conform to principles universally admitted as correct.

FORMS OF AMERICAN TAXATION.

Preliminary to an examination of the different modes of taxation, it may be proper to say, that there are, in the United States, two general systems; viz., by national and

by State authority. The national government imposes taxes in every form, direct and indirect, except upon the poll. The State governments generally rely upon direct taxation; and the poll-tax is one of the forms adopted.

Under State authority, counties, cities, towns, and schooldistricts impose taxes; so, also, parishes and religious corporations: but the latter, generally, only on voluntary membership.

Taxes may first be divided into two kinds,- direct and indirect. A direct tax is demanded of the person who it is intended shall pay it. Indirect taxes are demanded from one person, in the expectation that he will indemnify himself at the expense of others. Such are customs and excise.

In our further examination of the subject, we shall refer to the national taxation of the United States, and the State taxation of Massachusetts; selecting the latter State only for being the most convenient, and as representing that of the individual States generally with considerable exactness.

CHAPTER X.

NATIONAL TAXATION.-I. CUSTOMS.

THESE are taxes upon importations, and collected through the custom-houses. Government establishes a tariff; that is, a list of duties upon such articles as it deems best: these are paid by the importer before he can gain possession of his goods.

Duties are generally of two kinds, - specific and ad-valorem. Specific duties are imposed by the pound, yard, gallon, &c. Ad-valorem duties, as the term imports, are charged upon the value of the goods, as twenty per cent upon an invoice of silks, hardware, sugar, &c.

In some of the American tariffs, the specific principle has predominated; in others, the ad-valorem. There has always

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