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Often appears with: taxation, tribute, and revenue · trade, markets, and merchants · crime and punishment · wool export · unequal tax distribution · unequal tax burdens among states · tax collection costs · tariff effects on manufacturing · simplifying customs · replacing burdensome taxes with export taxes · monopoly duties · malt spirits materials
Usually: argument (6) · censure (3) · skepticism (2) · reflection (1) · temptation (1) · exhortation (1) · indignation (1)
“High taxes, sometimes by diminishing the consumption of the taxed commodities, and sometimes by encouraging smuggling, frequently afford a smaller revenue to government than what might be drawn from more moderate taxes.” Adam Smith, An Inquiry Into the Nature and Causes of the Wealth · insight
Hamilton argues that restricting federal taxation to specific objects like import duties would create two evils—oppression of industries and unequal tax burdens—since extreme duties encourage smuggling and distort commerce.
imposition laid upon it. The merchant, especially in a country of small commercial capital, is often under a necessity of keeping prices down in order to a more expeditious sale. The maxim that the consumer is the payer, is so much oftener true than the reverse of the proposition, that it is far more equitable that the duties on imports should go into a common stock, than that they should redound to the exclusive be…
Hamilton warns that limiting federal taxation to narrow objects like import duties would create unequal burdens, encourage smuggling, distort industry through excessive tariffs, and leave importing states and merchants bearing unfair costs.
imposition laid upon it. The merchant, especially in a country of small commercial capital, is often under a necessity of keeping prices down in order to a more expeditious sale. The maxim that the consumer is the payer, is so much oftener true than the reverse of the proposition, that it is far more equitable that the duties on imports should go into a common stock, than that they should redound to the exclusive be…
Smith argues that export prohibitions, even with harsh penalties, do not stop wool export and encourage smuggling, and he suggests legal exports with moderate taxes could raise revenue with less harm.
to pay. It is scarce possible to devise a tax which could produce any considerable revenue to the sovereign, and at the same time occasion so little inconveniency to anybody. The prohibition, notwithstanding all the penalties which guard it, does not prevent the exportation of wool. It is exported, it is well known, in great quantities. The great difference between the price in the home and that in…
Smith states four maxims of taxation: proportional contribution by ability, certainty not arbitrariness, convenience of payment timing and method, and minimizing extraction/vexation beyond government revenue.
a very considerable degree of inequality, it appears, I believe, from the experience of all nations, is not near so great an evil as a very small degree of uncertainty. 3. Every tax ought to be levied at the time, or in the manner, in which it is most likely to be convenient for the contributor to pay it. A tax upon the rent of land or of houses, payable at the same term at which such rents are usu…
He claims many taxes on foreign manufactures exist to grant monopolies and protect home merchants, and that lowering taxes when revenue falls can reduce smuggling while better administration can increase smuggling difficulty.
monopoly, or to give our own merchants an advantage in the home market. By removing all prohibitions, and by subjecting all foreign manufactures to such moderate taxes, as it was found from experience, afforded upon each article the greatest revenue to the public, our own workmen might still have a considerable advantage in the home market; and many articles, some of which at present aff…
He argues heavy customs duties raise smuggling and cause importers to under-declare and exporters to over-declare; he compares customs’ complexity and uncertainty with excise and proposes narrowing customs to fewer goods.
Heavy duties being imposed upon almost all goods imported, our merchant importers smuggle as much, and make entry of as little as they can. Our merchant exporters, on the contrary, make entry of more than they export; sometimes out of vanity, and to pass for great dealers in goods which pay no duty and sometimes to gain a bounty or a drawback. Our exports, in consequence of these different frauds, appear upon the cus…
Smith extends the malt-tax argument to spirits, claiming higher malt duties could reduce smuggling, while beer and ale taxes could be adjusted to discourage harmful spirits without reducing their price.
metheglin. The produce of those different taxes will probably much more than counterbalance that of the duties imposed, by what is called the annual malt tax, upon cyder and mum. Malt is consumed, not only in the brewery of beer and ale, but in the manufacture of low wines and spirits. If the malt tax were to be raised to eighteen shillings upon the quarter, it might be necessary to make some abatement in the differ…