On The Principles of Political Economy, and Taxation

by David Ricardo

In the case of a tax on raw produce, of a land tax, or tithes, the corn rent of land will vary, while the money rent will remain as before.

If, as we have before supposed, the land in cultivation were of three qualities, and that with an equal amount of capital,

180 qrs. of corn were obtained from land		No. 1.
170	from	2.
160	from	3.

the rent of No. 1 would be 20 quarters, the difference between that of No. 3 and No. 1; and of No. 2, 10 quarters, the difference between that of No. 3 and No. 2; while No. 3 would pay no rent whatever.

Now if the price of corn were 4l. per quarter, the money rent of No. 1 would be 80l., and that of No. 2, 40l.

Suppose a tax of 8s. per quarter to be imposed on corn; then the price would rise to 4l. 8s.; and if the landlords obtained the same corn rent as before, the rent of No. 1 would be 88l., and that of No. 2, 44l. But they would not obtain the same corn rent; the tax would fall heavier on No. 1 than on No. 2, and on No. 2 than on No. 3, because it would be levied on a greater quantity of corn. It is the difficulty of production on No. 3 which regulates price; and corn rises to 4l. 8s., that the profits of the capital employed on No. 3 may be on a level with the general profits of stock.

The produce and tax on the three qualities of land will be as follows:

No. 1, yielding	180	qrs. at 4l. 8s. per qr.	£792
Deduct the value of	16.3	or 8s. per qr. on 180 qrs.	72
	——		——
Net corn produce	163.7	Net money produce	£720
	——		——
No. 2, yielding	170	qrs. at 4l. 8s. per qr.	£748
Deduct the value of	15.4	qrs. at 4l. 8s. or 8s. per qr. on 170 qrs.	68
	——		——
Net corn produce	154.6	Net money produce	£680
	——		——
No. 3,	160	qrs. at 4l. 8s.	£704
Deduct the value of	14.5	qrs. at 4l. 8s. or 8s. per qr. on 160	64
	——		——
Net corn produce	145.5	Net money produce	£640
	——		——