DR. FINDLAY AND ADAM SMITH.

Dominion, Volume 2, Issue 599, 30 August 1909, Page 5

DR. FINDLAY AND ADAM SMITH.

. Sir,—ln your issue of August. 19, you reprint the following [quotation from Adam Smith, which the "Otago Daily Times"'hnd published in 'connection: with Dr.". Findlay's recent addresses on the subject oMaxation:—: • ''If my- income belong: to nic to f-pciul for my own' comfort and-gratification, without, any. deduction for the' uses of the state, why. should I; lose my right -.to any part beoajise-l have •saved itf To tax realised'wealth is .to, punish men for' nqt.■spending their.earhingffns they, receive them. - Yet, -it is eminently tor the public interest that: men, should save to inpreaso the capital of their'country." . This is- an extract' from .Chapter 11, Book, ,V, of Adam -Smith's' monumental work,- - "All Inquiry in the-Nature and' Causes of the, Wealth' of ;Nations," commonly .referred to. as -."The Wealth ■of Nations." • In order to appreciate: the quotation, and-whatits author intended. to i convoy, liowover, the entire chapter, of .which it is. a part, should bo. read together. :.'. Smith' •is comparing; ../different-"'.-..systems 'of taxation, .and,.while it can' scarcely -bo said' that' he! probounces' unreservedly in .favour- of any particular' ; tax, -he emphatically -prefers direct taxato/indirect.. -Here, .for: example, are' some other excerpts' rfrom. the., samS-'chapter.:— f >' ; "The ' subjects of every State ought. to' con-, ,tribute<towards ;the .support of .the Government as nearly as - possible m f proportion ' to; their respective abilities; . that; is,' in proportion ,to ',the -.revenue" -which ;they : . respectively enjoy under ".the- protection of the : State. The. expense of ; government -to -the 1 individuals Oof a-great nation is -like tho expense of the management to the joint tenants of .a great Restate, who "are: ail obliged to contribute in proportion to" their respective; interests; jin the -iState.ln"■the'ob:servation; of. neglect'. of,:/this...maxim I '"consists, what is called equality -of inequality of taxa-. tiori." . ... . XX -"-v'- ~-.:X'

. a tax wnicn eacnindividual is Douna, to pay. ought to bo, certain and not arbitrary. The . time- of'.payment, the 'manner) of payment; the, '.quantity., to !'be' paid/.- ought all' to 'be'clear and-;, plain' to •; the "contributor, and; to evory o'the?person.: ■ . : . Every tax ought to"'; be . so .contrived -as both to takeout, and \to keep i out'lflf the pockets : o£ -the-people- as : little , as. possible; over and above ..what, it .into ; the treasury.of. the State".. . . ;/■,Try-the'great .bolt, of-the. taxes levied in .this ■ 'country-'by "the foregoing' tests, • and- what ;miist ye : conclude? ; Does our Custom s: tariff; accord: with Hhem ?;: ;Do any of our, taxes, except the small modicum of -revenue we raise'.by,* direct ! taxation? :\Yhat the great Scotchman .' thinks ■ .of Customs, - may, . ' no t, sufficient ly'convincmg, ~be gathered;.from ' the .'following' extracts:from the same"'chapter: ;','>!. f law, contrary-;to all.' ' pnnciples of ' iustico, : first creates ;;the, : tatioji,; arid then'punishes ' those ' who -yield ;to;: .it; and it common ly'enliances tlie punishment in .proportion to fhe. very circumstances wliich ought :certainly.'-to) aneyiate. it,; .the; temptation' to commit;the: crime/' v..' ' ; : , : :i • VAdam,Smith then-prbceeds .to denounce direct tixes'iiupen .-.'wages',;as^:''absurd..and.v , destruc-, the." . • • 1 . .■(..--.lnitlie 'chapter alliided'-,to.\Smith .shows that the ;of sound - taxation 'are that (1) tit. must • 'be/.oh'eap and easy -to ;(2) of-the. people,' ani (3)' it must .iiot:'encouruge' 'evasion. The .unfortunate 1 individuals who have lately been ' pnflished ;.iri<:;iWellirigton V for bringing" - asKoro un-Gustomedgoddsmay console' thepselves by the giants mind,; of^ ; Adam, Smith,' iri_spito . ofthe fact ' that he was both: a university; profess'pr ,arid,; the tutor: of a .duke, dared;; to,- proclaim.;'the' truth ithat. smuggling is a . merely mm-made crime—tho result of State interference' with individual rights. 'But thero is more to follow. -Listen, ye critics ot . land-value taxation, to the ,'following quotations from -the 6ame chapter:— ' •v ''Both, ground rent; of houses and. .the .ordin-, ary r6nt 'of land. are ; a' species of revenuewhich the, owner in 'many teases; en joys'without.any bare! of bis 'own. Though a ;,part, of "this revenue should be taken .; to defray- the', expenses ■; of J the ; . Stite, ,no; discouragement f, will; thereby; be : 'giv.eh' to any sory of ;inaustry, ; The annual'produce of r the.land and - labour, the real wealth androvenue of the greai.body'of, the people' might 'be the same ifter such a\tax as before.' Ground rents - reitts of houses are, therefore, -perhaps a species -.'of revenue 'which, canbest bear to' have -a peculiar tax imposed upon! :.themjV:.'.ii'';''. ; ( not; raise the 'rent of- houses/. It-would fall al'together: upon .the'owner. who acts always aa greatest. rent, -which can! be;got' :for'' the' uses of his ground.' 'There 'are;; however, 'two 'differentlcircum-, stanccs which'.render the interestof. m.oney ; .h ijiuplil?ss'proper .subject ',pf direct ;taxntiQn_fhnn •value of land can never be a secret, and can always V bei .asijertained. -with;; great''exactness.' The; whole amount of,: capital- stock 'which ;a_, mail possesses; js /alnibsii>%uways > : ; , can scarco ever bo ascertained with -tolerable exactness." - 1 After elaborating a- system of of -land for, the, purposes'.of.taxation, -Smith' pro-' ceeds:- j ' ; • , ."If -by such a system of administration, n tax of this , kind - could -be so, managed , as, to give, not only no discouragement, .but, on the contrary; some; encouragement to the improvement of 'land, ;? notappear, likely, to occasion any ,- inconvenienco to the lfindlord, except always the unavoidable one of being obliged to pay the• tax." ...1".,.,; ', What have our territorial land monopolists and our "blaze Sf glory" syndicate promoters -to-flay 1 to- that?';\£'sia Free-trader;ana,a'single taxer, ,1 am I .quite'prepared to abide •by the authority or/'The 'Wealth of. Nations." If Dr! Findlay'a critics tfant to discredit his scholarly a'ddrKSes.' oti . taxation', , they! had: better' .be silent about iidam "Smith.—r am, : etc.,'

: August ':26.. ■': ' ; ' . IJ. O'RiEGAN. ;fOno extract- from''Adam Smith's worlf .deal: ing \vith, ; taxation !of-. the.'necessaries .'of. life and smuggling ~has;':been:.omitted'.from' .this .'letter, •for" space reasons.].. •• '.. ; .