§ 5. A Résumé of the general principles of taxation.
After the manner of our classification and résumé of the subject of value and money, it may be convenient to here insert a recapitulation of the various principles under the treatment of taxation.[354]
Comparison Between Direct And Indirect Taxation.
Adam Smith's “Canons of Taxation.”—A tax should be: I. Equal (in amount of sacrifice entailed). II. Certain. III. Timely. IV. All for the state.
A Tax is either:
Direct.
Indirect (on commodities.)
Direct taxes are:
On Income.
On Expenditure.
Taxes on Income are:
General.
Special.
General income taxes. The best of taxes, if people were all honest. As it is, it falls most heavily on the conscientious. Should be reserved for emergency. All savings and a fixed amount in all incomes should be exempt.
Special taxes are on:
Rent.
Wages.
Profits.
Taxes on Rent. Agricultural rent is meant. It falls entirely on the landlord, and, if not balanced by taxes on other classes, is unjust. May be blended with a tax on profits, if on rent due to landlord's improvements.