An inquiry into the nature and causes of the wealth of

737

Adam Smith

tion. If the turnpike tolls of Great Britain should ever become one

of the resources of government, we may learn, by the example of

many other nations, what would probably be the consequence.

Such tolls, no doubt, are finally paid by the consumer; but the

consumer is not taxed in proportion to his expense, when he pays,

not according to the value, but according to the bulk or weight of

what he consumes. When such duties are imposed, not according

to the bulk or weight, but according to the supposed value of the

goods, they become properly a sort of inland customs or excise,

which obstruct very much the most important of all branches of

commerce, the interior commerce of the country.

In some small states, duties similar to those passage duties are

imposed upon goods carried across the territory, either by land or

by water, from one foreign country to another. These are in some

countries called transit-duties. Some of the little Italian states which

are situated upon the Po, and the rivers which run into it, derive

some revenue from duties of this kind, which are paid altogether

by foreigners, and which, perhaps, are the only duties that one

state can impose upon the subjects of another, without obstruc-

tion in any respect, the industry or commerce of its own. The

most important transit-duty in the world, is that levied by the

king of Denmark upon all merchant ships which pass through the

Sound.

Such taxes upon luxuries, as the greater part of the duties of

customs and excise, though they all fall indifferently upon every

different species of revenue, and are paid finally, or without any

retribution, by whoever consumes the commodities upon which

they are imposed; yet they do not always fall equally or propor-

tionally upon the revenue of every individual. As every man’s

humour regulates the degree of his consumption, every man con-

tributes rather according to his humour, than proportion to his

revenue: the profuse contribute more, the parsimonious less, than

their proper proportion. During the minority of a man of great

fortune, he contributes commonly very little, by his consump-

tion, towards the support of that state from whose protection he

derives a great revenue. Those who live in another country, con-

tribute nothing by their consumption towards the support of the

government of that country, in which is situated the source of

their revenue. If in this latter country there should be no land tax,

nor any considerable duty upon the transference either of move-

able or immoveable property, as is the case in Ireland, such absen-

tees may derive a great revenue from the protection of a govern-

ment, to the support of which they do not contribute a single

shilling. This inequality is likely to be greatest in a country of

which the government is, in some respects, subordinate and de-

pendant upon that of some other. The people who possess the

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738

The Wealth of Nations

most extensive property in the dependant, will, in this case, gener-

ally chuse to live in the governing country. Ireland is precisely in

this situation; and we cannot therefore wonder, that the proposal

of a tax upon absentees should be so very popular in that country.

It might, perhaps, be a little difficult to ascertain either what sort,

or what degree of absence, would subject a man to be taxed as an

absentee, or at what precise time the tax should either begin or

end. If you except, however, this very peculiar situation, any in-

equality in the contribution of individuals which can arise from

such taxes, is much more than compensated by the very circum-

stance which occasions that inequality; the circumstance that ev-

ery man’s contribution is altogether voluntary; it being altogether

in his power, either to consume, or not to consume, the commod-

ity taxed. Where such taxes, therefore, are properly assessed, and

upon proper commodities, they are paid with less grumbling than

any other. When they are advanced by the merchant or manufac-

turer, the consumer, who finally pays them, soon comes to con-

found them with the price of the commodities, and almost forgets

that he pays any tax.

Such taxes are, or may be, perfectly certain; or may be assessed,

so as to leave no doubt concerning either what ought to be paid,

or when it ought to be paid; concerning either the quantity or the

time of payment. What ever uncertainty there may sometimes be,

either in the duties of customs in Great Britain, or in other duties

of the same kind in other countries, it cannot arise from the na-

ture of those duties, but from the inaccurate or unskilful manner

in which the law that imposes them is expressed.

Taxes upon luxuries generally are, and always may be, paid piece-

meal, or in proportion as the contributors have occasion to pur-

chase the goods upon which they are imposed. In the time and

mode of payment, they are, or may be, of all taxes the most conve-

nient. Upon the whole, such taxes, therefore, are perhaps as agree-

able to the three first of the four general maxims concerning taxa-

tion, as any other. They offend in every respect against the fourth.

Such taxes, in proportion to what they bring into the public

treasury of the state, always take out, or keep out, of the pockets

of the people, more than almost any other taxes. They seem to do

this in all the four different ways in which it is possible to do it.

First, the levying of such taxes, even when imposed in the most

judicious manner, requires a great number of custom-house and

excise officers, whose salaries and perquisites are a real tax upon

the people, which brings nothing into the treasury of the state.

This expense, however, it must be acknowledged, is more moder-

ate in Great Britain than in most other countries. In the year which

ended on the 5th of July, 1775, the gross produce of the different

duties, under the management of the commissioners of excise in

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