HIGH DUTIES AND LOW DUTIES.

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:—

£. s. d.

The paper for 100,000 copies of the Penny Magazine weighs 3,400 lbs., upon which a duty is paid of 3d. 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.

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.”

LONDON:—CHARLES KNIGHT, PALL-MALL EAST.

Shopkeepers and Hawkers may be supplied Wholesale by the following Booksellers:—

London, Groombridge, Panyer Alley, Paternoster Row.

Birmingham, Drake.

Bristol, Westley and Co.

Hull, Stephenson.

Leeds, Baines and Co.

Liverpool, Willmer and Smith.

Manchester, Robinson, and Webb and Simms.

Newcastle-upon-Tyne, Charnley.

Nottingham, Wright.

Dublin, Wakeman.

Edinburgh, Oliver and Boyd.

Glasgow, Atkinson and Co.

Printed by William Clowes, Stamford Street.

Transcriber’s Notes

New original cover art included with this eBook is granted to the public domain. Itemized changes from the original text:

p. 61: Added “a” to phrase “the value of a somewhat higher article.”

p. 62: Changed “here” to “there” in phrase “And we believe there is hardly a condition, however low, from which.”