oaded, materially impedes the conveyance of it into those
hands, where it would probably be made most productive. And if it be
considered, that land, regarded as a fit subject for exclusive
taxation, would not only be reduced in price, to compensate for the risk
of that taxation, but in proportion to the indefinite nature and
uncertain value of the risk, would become a fit subject for
speculations, partaking more of the nature of gambling, than of sober
trade, it will appear probable, that the hands into which land would in
that case be most apt to fall, would be the hands of those, who possess
more of the qualities of the gambler, than of the qualities of the
sober-minded proprietor, who is likely to employ his land to the
greatest advantage.

CHAPTER XIII.

TAXES ON PROFITS.

Taxes on those commodities, which are generally denominated luxuries,
fall on those only who make use of them. A tax on wine is paid by the
consumer of wine. A tax on pleasure horses, or on coaches, is paid by
those who provide for themselves such enjoyments, and in exact
proportion as they provide them. But taxes on necessaries do not affect
the consumers of necessaries, in proportion to the quantity that may be
consumed by them, but often in a much higher proportion. A tax on corn,
we have observed, not only affects a manufacturer in the proportion that
he and his family may consume corn, but it alters the rate of profits of
stock, and therefore also affects his income. Whatever raises the wages
of labour, lowers the profits of stock; therefore every tax on any
commodity consumed by the labourer, has a tendency to lower the rate of
profits.

A tax on hats will raise the price of hats; a tax on shoes, the price of
shoes; if this were not the case, the tax would be finally paid by the
manufacturer; his profits would be reduced below the general level, and
he would quit his trade. A partial tax on profits will raise the price
of the commodity on which it falls: a tax, for example, on the profits
of the hatter, would raise the price of hats; for if his profits were
taxed, and not those of any other trade, his profits, unless he raised
the price of his hats, would be below the general rate of profits, and
he would quit his employment for another.

In the same manner a tax on the profits of the farmer would raise the
price of corn; a tax on the profits of the clothier, the price of cloth;
and if a tax in proportion to profits were laid