On the general principles of taxation, as illustrating the advantages of a perfect income tax

Abstract

Gentlemen?The duties of a government, as enumerated by Adam Smith, are four in number:? 1st?To guard against foreign aggression. 2nd?To secure against internal fraud or violence. 3rd?To maintain public institutions which private individuals cannot support with profit. 4th?To make all the subjects of the state contribute their fair share towards the necessary expenses of government, by the payment of taxes. Now, in this paper, I propose to direct your attention to the last duty, or in other words, to explain the general principles of taxation. There are few branches of political economy more interesting in themselves, or of more importance at the present time, than the subject of taxation, and yet there is scarcely any on which greater errors are prevalent. I shall, in the first instance, direct your attention to some of those errors, involving general principles, which, in fact, arise from a wrong way of looking at the subject, and which are, consequently, sources of an infinite number of minor errors in the cases where these mistaken principles come to be applied.