Taxes upon Consumable Commodities The impossibility of taxing the people, in proportion to their revenue, by any capitation, seems to have given occasion to the invention of taxes upon consumable commodities.The state, not knowing how to tax, directly and proportionably, the revenue of its subjects, endeavours to tax it indirectly by taxing their expense, which, it is supposed, will in most cases be nearly in proportion to their revenue.Their expense is taxed by taxing the consumable commodities upon which it is laid out.
Consumable commodities are either necessaries or luxuries.
By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without.A linen shirt, for example, is, strictly speaking, not a necessary of life.The Greeks and Romans lived, I suppose, very comfortably though they had no linen.But in the present times, through the greater part of Europe, a creditable day-labourer would be ashamed to appear in public without a linen shirt, the want of which would be supposed to denote that disgraceful degree of poverty which, it is presumed, nobody can well fall into without extreme bad conduct.Custom, in the same manner, has rendered leather shoes a necessary of life in England.The poorest creditable person of either *** would be ashamed to appear in public without them.In Scotland, custom has rendered them a necessary of life to the lowest order of men; but not to the same order of women, who may, without any discredit, walk about barefooted.In France they are necessaries neither to men nor to women, the lowest rank of both ***es appearing there publicly, without any discredit, sometimes in wooden shoes, and sometimes barefooted.Under necessaries, therefore, I comprehend not only those things which nature, but those things which the established rules of decency have rendered necessary to the lowest rank of people.All other things I call luxuries, without meaning by this appellation to throw the smallest degree of reproach upon the temperate use of them.Beer and ale, for example, in Great Britain, and wine, even in the wine countries, I call luxuries.A man of any rank may, without any reproach, abstain totally from tasting such liquors.Nature does not render them necessary for the support of life, and custom nowhere renders it indecent to live without them.
As the wages of labour are everywhere regulated, partly by the demand for it, and partly by the average price of the necessary articles of subsistence, whatever raises this average price must necessarily raise those wages so that the labourer may still be able to purchase that quantity of those necessary articles which the state of the demand for labour, whether increasing, stationary, or declining, requires that he should have.A tax upon those articles necessarily raises their price somewhat higher than the amount of the tax, because the dealer, who advances the tax, must generally get it back with a profit.
Such a tax must, therefore, occasion a rise in the wages of labour proportionable to this rise of price.
It is thus that a tax upon the necessaries of life operates exactly in the same manner as a direct tax upon the wages of labour.The labourer, though he may pay it out of his hand, cannot, for any considerable time at least, be properly said even to advance it.It must always in the long-run be advanced to him by his immediate employer in the advanced rate of his wages.His employer, if he is a manufacturer, will charge upon the price of his goods this rise of wages, together with a profit; so that the final payment of the tax, together with this overcharge, will fall upon the consumer.If his employer is a farmer, the final payment, together with a like overcharge, will fall upon the rent of the landlord.
It is otherwise with taxes upon what I call luxuries, even upon those of the poor.The rise in the price of the taxed commodities will not necessarily occasion any rise in the wages of labour.A tax upon tobacco, for example, though a luxury of the poor as well as of the rich, will not raise wages.Though it is taxed in England at three times, and in France at fifteen times its original price, those high duties seem to have no effect upon the wages of labour.The same thing may be said of the taxes upon tea and sugar, which in England and Holland have become luxuries of the lowest ranks of people, and of those upon chocolate, which in Spain is said to have become so.The different taxes which in Great Britain have in the course of the present century been imposed upon spirituous liquors are not supposed to have had any effect upon the wages of labour.The rise in the price of porter, occasioned by an additional tax of three shillings upon the barrel of strong beer, has not raised the wages of common labour in London.These were about eighteen pence and twenty pence a day before the tax, and they are not more now.
The high price of such commodities does not necessarily diminish the ability of the inferior ranks of people to bring up families.Upon the sober and industrious poor, taxes upon such commodities act as sumptuary laws, and dispose them either to moderate, or to refrain altogether from the use of superfluities which they can no longer easily afford.Their ability to bring up families, in consequence of this forced frugality, instead of being diminished, is frequently, perhaps, increased by the tax.
It is the sober and industrious poor who generally bring up the most numerous families, and who principally supply the demand for useful labour.All the poor, indeed, are not sober and industrious, and the dissolute and disorderly might continue to indulge themselves in the use of such commodities after this rise of price in the same manner as before without regarding the distress which this indulgence might bring upon their families.