Types of Taxation

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Types of Taxation

Taxation in 1889

The following information about Taxation is from the Cyclopaedia of Political Science, Political Economy, and the Political History of the United States by the Best American and European Writers:

“(…) it is possible, if possible at all, only if we consider the different kinds of taxes apart from one another, and according to their special assessment. It is necessary to consider apart their accidental and their permanent effects, their temporary and definitive effects. We must remark, also, that both for taxation and for the cost of production, the law of supply and demand is predominant. That law it is which permits, according to very variable cases and circumstances, the landowner, capitalist or workman to have the tax reimbursed to him by the leaseholder, the manufacturer, or the merchant, and which permits these latter to have themselves reimbursed, in turn, by the consumers; or which compels each of them to pay a part of the tax.

It is, therefore, erroneous to affirm that the producer has himself always and equally reimbursed by the consumer. At the end of a period of time, the tax imposed on one or many categories of individuals is repercussed on other classes, and in the end fiscal charges weigh on all the classes of the population, even the taxes on the wealthy, which fall indirectly and in a certain proportion on the poor themselves, since for the labor of the poor there is less demand by the wealthy, whose saving or consumption the tax has curtailed.

Lorenz von Stein, in his Finanzwissenschaft, maintains that all taxes, and even the fines paid by criminals, finally become component parts of the prices of things, just as do the costs of production, and in the last analysis fall on the consumer. Etienne Laspeyres, in the article Staatswirthschaft, in Bluntschli’s Staatswörterbuch, defends the same view. As far back as 1790 the Marquis de Cassux published a work, “The Absurdity of the Land Tax,” demonstrated by showing that all taxes, no matter of what kind, ultimately become part of the prices of commodities. (…)

The method in which taxation diffuses itself has been thus illustrated by M. Thiers, in his work “Rights to Property.” “In the same manner,” he says, “as our senses, deceived by appearances, tell us that it is the sun which moves and not the earth; so a particular tax appears to fall upon one class, and another tax upon another class when in reality it is not so. The tax really best suited to the poorest member of society is that which is best suited to the general fortune of the state; a fortune which is much more for the possession and enjoyment of the poor man than it is for the rich; a fact of which we are never sufficiently convinced.

But of the manner, nevertheless, in which taxes are divided among the different classes of the state, the most certain thing we can say is: That they are divided in proportion to what each man consumes, and for a reason not generally recognized or understood, namely, that taxes are reflected, as it were, to infinity, and from reflection to reflection become eventually an integral part of the prices of things. Hence the greatest purchasers and consumers are everywhere the greatest tax payers. This is what I call ‘diffusion of taxation,’ to borrow a term from physical science, which applies the expression ‘diffusion of light’ to those numberless reflections, in consequence of which the light which has penetrated the slightest aperture spreads itself around in every direction, and in such a manner as to reach all the objects which it renders visible. So a tax which at first sight appears to be paid directly, in reality is only advanced by the individual who is first called upon to pay it.”

Other Popular Tax Definitions in the World Legal Encyclopedia

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