TAXES 587 on wealthy citizens, or an appeal was made to their patriotism. The common people, so far from paying any tax except the duty on the goods they purchased, received from the state large appropriations for public games and spec- tacles. In Eome, under the republic, the spoils of conquered nations and the annual tribute exacted from them defrayed the greater part of the expenses of the state; but under the empire it was found necessary to resort to numerous devices of taxation, portions of the territorial revenues were sequestrated, capi- tation taxes levied, tolls, taxes on corn, and legacy and hereditary duties collected, heavy sums exacted for the privilege of Roman citi- zenship, &c. During a large part of the mid- dle ages, under the feudal institutions, there was no system of taxation. The kings were maintained by the products of their land, and in case of war their vassals, the barons and knights, were under obligation to furnish their quota of men-at-arms equipped and provis- ioned without expense to the monarch ; and this military service was performed by their tenants by way of rental for the lands they cultivated. The first approach to modern sys- tems was made during the middle ages by the republic of Venice, which levied taxes on the lands of the republic, and also in the form of duties on manufactures and imports ; these duties, which brought in a large revenue, were imposed on the necessaries as well as the luxu- ries of life. In France, prior to the revolution, there was a serious obstacle to any equitable system of taxation in the fact that the nobility and clergy, the privileged classes as they were termed, were exempted from its burdens. In England the finances for centuries were badly managed; there was little encouragement to industry, and the taxes, whether direct or in- direct, were insufficient for the expenses of the government. The privileged classes were exempted as in France. Eesort was often had to the sale of monopolies, and to forced loans, contributions, and confiscations. In most of the other countries of Europe no taxes were levied on the clergy or the nobles. In the countries of western Asia, the government of provinces with the right of taxation was be- stowed on favorites, or sold to the man who would pay highest for it ; and as the duration of the government of these rulers was short, they practised the most cruel extortion, com- pletely annihilating industry, and often trans- forming countries once prosperous and popu- lous into desert wastes. Taxes are either direct or indirect. The former are those which are levied upon the persons, property, business, income, &c., of those who are to pay them ; the latter are levied on commodities in the hands of manufacturers and dealers, and will be paid ultimately by consumers as a part of the price of the commodity. Presumptively the former are paid by the persons taxed, while as to the latter the persons who make payment to the government only advance to it the taxes, expecting to reimburse the amount in their sales and thus transfer the tax to the pur- chasers. They constitute therefore as to these taxes the collectors for the government, col- lecting with ease and convenience from the whole body of consumers a tax which it would be difficult and expensive, perhaps impossible, for the government to collect from the several consumers after the articles taxed have passed into their hands. But though direct taxes presumptively fall upon the persons taxed, a portion of the burden is usually transferred to others, and is diffused through the community in a manner that renders it impossible to indi- cate the precise extent. A direct tax on lands is paid by the land owner ; but if the revenues of the state were principally collected from this source, the necessary result would be such an increase in the price of everything which the land produces as would transfer to con- sumers a large proportion of the tax, and thus have the effect of an indirect tax upon them. A like result must follow the taxation of pro- fessional incomes, unless the incomes of oth- er callings are taxed proportionably, so as to equalize the burden by the tax law itself, in- stead of leaving it to be equalized by the in- crease in price of whatever those who pay the tax have to sell, as compared with the price of what is sold by those who are not taxed. A process of equalization of this nature must always be going on when one class of property or occupation is taxed and another exempted. The true principles of taxation were little understood until the time of Adam Smith, and even now are in many particulars the subject of earnest controversy. That writer laid down maxims of taxation as follows: " 1. The sub- jects of every state ought to contribute toward the support of the government, as nearly as possible, in proportion to their respective abil- ities ; that is, in proportion to the revenue which they respectively enjoy under the pro- tection of the state. 2. The tax which each individual is bound to pay ought to be cer- tain, and not arbitrary ; the time of payment, the manner of payment, and the quantity to be paid, ought all to be clear and plain to the contributor and to every other person. 3. Every tax ought to be levied at the time and in the manner in which it is most likely to be convenient for the contributor to pay it. 4. Every tax ought to be so contrived as both to take out and keep out of the pockets of the people as little as possible over and above what it brings into the public treasury of the state." Prof. Amasa Walker, in his u Science of Wealth," adds to these the following, which he justly says has been adopted in every coun- try having any considerable taxation : " 5. The heaviest taxes should be imposed on those commodities the consumption of which is es- pecially prejudicial to the interests of the peo- ple." The first of these maxims has met with little or no recognition except in recent times. It has already been said that until recently,
