ncome of the country must have increased, by the
whole amount of these increased profits; and by giving a stimulus to
accumulation, must have increased the resources of the state.[18]

Without calling in question the policy, which dictated this alteration
of the tax, I may be permitted to doubt whether it gave any great
stimulus to accumulation. If the profits of the fisherman and others
engaged in the trade, were doubled in consequence of more fish being
consumed, capital and labour must have been withdrawn from other
occupations to engage them in this particular trade. But in those
occupations capital and labour were productive of profits, which must
have been given up when they were withdrawn. The ability of the country
to accumulate was only increased by the difference between the profits
obtained in the business in which the capital was newly engaged, and
those obtained in that from which it was withdrawn.

Whether taxes be taken from revenue or capital, they diminish the
taxable commodities of the state. If I cease to expend 100_l._ on wine,
because by paying a tax of that amount I have enabled Government to
expend 100_l._ instead of expending it myself, one hundred pounds worth
of goods are necessarily withdrawn from the list of taxable
commodities. If the revenue of the individuals of a country be 10
millions, they will have at least 10 millions worth of taxable
commodities. If by taxing some, one million be transferred to the
disposal of Government, their revenue will still be nominally 10
millions, but they will remain with only nine millions worth of taxable
commodities. There are no circumstances under which taxation does not
abridge the enjoyments of those on whom the taxes ultimately fall, and
no means by which those enjoyments can again be extended, but the
accumulation of new revenue.

Taxation can never be so equally applied, as to operate in the same
proportion on the value of all commodities, and still to preserve them
at the same relative value. It frequently operates very differently from
the intention of the legislature, by its indirect effects. We have
already seen, that the effect of a direct tax on corn and raw produce,
is, if money be also produced in the country, to raise the price of all
commodities, in proportion as raw produce enters into their composition,
and thereby to destroy the natural relation which previously existed
between them. Another indirect effect is, that it raises wages,