at the maximum of taxation, because by increasing the
rate, he cannot increase the amount of any one of these taxes. But in
this conclusion he will not be always correct, for it is very possible
that such a country could bear a very great addition to its burdens
without infringing on the integrity of its capital.

CHAPTER XV.

TAXES ON OTHER COMMODITIES THAN RAW PRODUCE.

On the same principle that a tax on corn would raise the price of corn,
a tax on any other commodity would raise the price of that commodity. If
the commodity did not rise by a sum equal to the tax, it would not give
the same profit to the producer which he had before, and he would remove
his capital to some other employment.

The taxing of all commodities, whether they be necessaries or luxuries,
will, while money remains at an unaltered value, raise their prices by a
sum at least equal to the tax.[19] A tax on the manufactured necessaries
of the labourer would have the same effect on wages as a tax on corn,
which differs from other necessaries only by being the first and most
important on the list; and it would produce precisely the same effects
on the profits of stock and foreign trade. But a tax on luxuries would
have no other effect than to raise their price. It would fall wholly on
the consumer, and could neither increase wages, nor lower profits.

Taxes which are levied on a country for the purpose of supporting war,
or for the ordinary expenses of the state, and which are chiefly devoted
to the support of unproductive labourers, are taken from the productive
industry of the country; and every saving which can be made from such
expenses will be generally added to the income, if not to the capital of
the contributors. When for the expenses of a year's war, twenty millions
are raised by means of a loan, it is the twenty millions which are
withdrawn from the productive capital of the nation. The million per
annum which is raised by taxes to pay the interest of this loan, is
merely transferred from those who pay it to those who receive it, from
the contributor to the tax to the national creditor. The real expense is
the twenty millions, and not the interest which must be paid for it.[20]
Whether the interest be or be not paid, the country will neither be
richer nor poorer. Government might at once have required the twenty
millions in the shape of taxes; in which case it would not have been
necessary to raise annual taxes to the amount o