$100, the one producer may have to sell produce to the value of $1,100, the other only to the value of $500. If on these two branches of industry a tax be imposed of five per cent ad valorem, the last will be charged only with $25, the first with $55; leaving to the one $75 profit, to the other only $45. To equalize, therefore, their expectation of profit, the one commodity must rise in price, or the other must fall, or both.343 Commodities made chiefly by immediate labor must rise in value, as compared with those which are chiefly made by machinery. It is unnecessary to prosecute this branch of the inquiry any further.
§ 2. Taxes on particular commodities fall on the consumer.
A tax on any one commodity, whether laid on its production, its importation, its carriage from place to place, or its sale, and whether the tax be a fixed sum of money for a given quantity of the commodity, or an ad valorem duty, will, as a general rule, raise the value and price of the commodity by at least the amount of the tax. There are few cases in which it does not raise them by more than that amount. In the first place, there are few taxes on production on account of which it is not found or deemed necessary to impose restrictive regulations on the manufacturers or dealers, in order to check evasions of the tax. These [pg 564] regulations are always sources of trouble and annoyance, and generally of expense, for all of which, being peculiar disadvantages, the producers or dealers must have compensation in the price of their commodity. These restrictions also frequently interfere with the processes of manufacture, requiring the producer to carry on his operations in the way most convenient to the revenue, though not the cheapest or most efficient for purposes of production. Any regulations whatever, enforced by law, make it difficult for the producer to adopt new and improved processes.