It is always observed in years of scarcity, if it be not extreme, that the poor labour more and really live better than in years of great plenty, when they indulge themselves in idleness and riot. I have been told by a considerable manufacturer that in the year 1740, when bread and provisions of all kinds were very dear, his workmen not only made a shift to live, but paid debts which they had {p81} contracted in former years that were much more favourable and abundant.
This doctrine, therefore, with regard to taxes may be admitted to some degree, but beware of the abuse. Exorbitant taxes, like extreme necessity, destroy industry by producing despair; and even before they reach this pitch they raise the wages of the labourer and manufacturer, and heighten the price of all commodities. An attentive, disinterested legislature will observe the point when the emolument ceases and the prejudice begins; but as the contrary character is much more common, it is to be feared that taxes all over Europe are multiplying to such a degree as will entirely crush all art and industry; though perhaps their first increase, together with circumstances, might have contributed to the growth of these advantages.
The best taxes are such as are levied upon consumptions, especially those of luxury, because such taxes are less felt by the people. They seem, in some measure, voluntary, since a man may choose how far he will use the commodity which is taxed: they are paid gradually and insensibly, and being confounded with the natural price of the commodity, they are scarcely perceived by the consumers. Their only disadvantage is that they are expensive in the levying.
Taxes upon possessions are levied without expense, but have every other disadvantage. Most states, however, are obliged to have recourse to them, in order to supply the deficiencies of the other.
But the most pernicious of all taxes are those which are arbitrary. They are commonly converted by their management into punishments on