There is a maxim that prevails among those whom in this country we call “ways and means” men, and who are denominated financiers and maltotiers in France, that every new tax creates a new ability in the subject to bear it, and {p79} that each increase of public burdens increases proportionably the industry of the people. This maxim is of such a nature as is most likely to be extremely abused, and is so much the more dangerous, as its truth cannot be altogether denied; but it must be owned, when kept within certain bounds, to have some foundation in reason and experience.
When a tax is laid upon commodities which are consumed by the common people, the necessary consequence may seem to be that either the poor must retrench something from their way of living, or raise their wages so as to make the burden of the tax fall entirely upon the rich. But there is a third consequence which very often follows upon taxes—viz., that the poor increase their industry, perform more work, and live as well as before without demanding more for their labour. Where taxes are moderate, are laid on gradually, and affect not the necessaries of life, this consequence naturally follows; and it is certain that such difficulties often serve to excite the industry of a people, and render them more opulent and laborious than others who enjoy the greatest advantages. For we may observe, as a parallel instance, that the most commercial nations have not always possessed the greatest extent of fertile land; but, on the contrary, that they have laboured under many natural disadvantages. Tyre, Athens, Carthage, Rhodes, Genoa, Venice, Holland are strong examples to this purpose; and in all history we find only three instances of large and fertile countries which have possessed much trade—the Netherlands, England, and France. The two former seem to have been allured by the advantages of their maritime situation, and the necessity