It is a well-known principle, that in taxation two and two do not make
four--that is, if a government receive one sum from a low or a moderate
duty upon an article of common use, that receipt will not be doubled by
doubling the duty. In some cases it will be even lessened. This result
is produced by the diminished consumption, arising out of the higher
price to the consumer; which higher price includes the additional profit
which the manufacturer and the retailer must charge for the additional
capital employed upon the article in consequence of the tax. Suppose a
tax of a penny were put upon the ‘Penny Magazine.’ Let us see, in that
case, how the tax would affect the consumption, and what the government
would gain by the tax. In the first place the tax would raise the price
of the Magazine to _three_-pence; for, as the retailer receives
one-third of the present price, he would also require to receive
one-third of the additional price:--the stamp of a penny would therefore
immediately become three half-pence to the consumer, by the profit of
the retailer alone. The remaining half-penny would be necessary to
compensate the publisher for this additional advance of capital, and for
the diminished return upon the original outlay for authors, artists, and
that branch of the printing process which is called composition. There
are certain expenses which are the same whether a work sells one hundred
copies, or one hundred thousand. The price being therefore raised to
three-pence, we may fairly conclude that the consumption would be
diminished nine-tenths--that ten thousand copies would be sold instead
of a hundred thousand. Let us see how the revenue would be affected by
these altered circumstances:--
The paper for 100,000 copies of the Penny Magazine
weighs 3,400 lbs., upon which a duty is paid of 3d. £. s. d.
per lb., amounting to 42 10 0
The imposition of a stamp of 1d. per copy would have
the effect of raising the retail price of the Penny
Magazine to 3d. At that rate it is presumed that
the sale of the _Three_-penny Magazine, instead of
being 100,000 copies, would be reduced to 10,000
at the utmost.
Upon 10,000 copies, with 1d. stamp, the revenue
would receive as under: £. s. d. £. s. d. £. s. d.
Duty of 3d. in the lb. upon paper. 4 5 0
Stamp of 1d. upon 10,000 41 13 0
Deduct discount of twenty per cent.
allowed upon news stamps 8 6 6
________ 33 6 6
________ 37 11 6
________
_Weekly_ loss to the revenue from the high duty 4 18 6
________
Or, _Annual_ duty upon sixty-four impressions of 100,000
copies of the Penny Magazine, using 217,600 lbs. of
paper, taxed at 3d. per lb 2,720 0 0
_Annual_ produce of a penny stamp, and paper duty upon
10,000 copies 2,404 16 0
___________
_Annual_ loss to the revenue from the high duty 315 4 0
By this operation, therefore, the government would sustain that loss
which invariably results from the diminished consumption of an article
of general use upon which a high duty is imposed; and ninety thousand
persons would be excluded from the purchase of a little work from which
they derive instruction and amusement. By this diminished consumption of
nine-tenths of the Penny Magazine, nearly nine-tenths of the
paper-makers, printers, type-founders, ink-makers, bookbinders,
carriers, and retailers, to whom the sale of a hundred thousand copies
weekly affords profitable employment, would, as far as the Penny
Magazine goes, be deprived of that employment; and that diminution of
profitable employment would in a degree diminish their power of
continuing consumers of other articles contributing to the revenue, and
thus still more affect the amount of taxation dependent upon the Penny
Magazine.
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_Perseverance_.--“I recollect,” says Sir Jonah Barrington, “in Queen’s
County, to have seen a Mr. Clerk, who had been a working carpenter, and
when making a bench for the session justices at the Court-house, was
laughed at for taking peculiar pains in planing and smoothing the seat
of it. He smilingly observed, that he did so _to make it easy for
himself_, as he was resolved he would never die till he had a right to
sit thereupon, and he kept his word. He was an industrious man--honest,
respectable, and kind-hearted. He succeeded in all his efforts to
accumulate an independence; he did accumulate it, and uprightly. His
character kept pace with the increase of his property, and he lived to
sit as a magistrate on that very bench that he sawed and planed.”
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