RAW NOTIONS ON RAW MATERIAL OF TAXATION.
Ma. DISRAELI cannot understand how Mr. John Stuart Mill de- nies that the land is " raw material." Mr. Mill explains raw ma-
terial to be that which is taken by industry from the land to be worked up : Mr. Disraeli contends that land must be included in
the same category, because, he insists "man made the land "! A bold assertion. However, he justifies it. "What I maintain is, that man did make the land—that you, the farmers of Buckinghamshire, did make the land of South Bucks. I say that it is your cultivation, your manures—your artificial manures—your various pro- cesses to which the land is subjected under your science and experience-- that invest it with certain creative qualities ; that a portion of those quali- ties is wasted by every crop that you produce, and is in fact the raw mate- rial of your manufacture ; m fact, if you did not cultivate the land, it would cease to produce your manufacture. Your machinery is the plough, the clod-crusher, the thrasher, but not the soil. The soil is the raw material, and it is created by you; and every time that the crop is produced, some creative qualities of that raw material are expended—some portion, in fact, of that raw material which you must supply by renovated skill, by renewed experiments, and by increased culture. Therefore, I say, that land is the raw material of the British farmer, and that in this country you tax his raw material, whereas the raw material of the manufacturer is not taxed ; and you announce this to be the great principle of your new and enlightened system of commerce, that no raw material of manufacture should be taxed ; and you don't apply to agriculture the same principle that you do to com- merce."
Thus Mr. Disraeli develops his argument, like a song of Handel, twice over—both movements repeated. The melody is not the more powerful for the repetition. Mr. Alcock comes nearer to the
truth, when he says that guano is the true "raw material." Accord- ing to Mr. Disraeli's classification, the raw material of cotton gowns
would be the building called fahory—the "loons in quo." Into
such traps do ingenious men fall when they wander among meta- phors.
The confusion originates probably in the generally confused state of ideas on the subject of taxation and its incidence ; a confusion dispelled if the reasoner would only keep his mind fixed on a few broad truths. Taxes are paid out of produce ; in fact, in any but a very infant country) a portion of the aggregate produce is called into being by the anticipative demands for the support of govern- ment; and, however the process may be disguised, first by ex- changes, and subsequently by being lumped under the head of "taxation," that portion of produce is specially created for the purpose in question. As it is never made in kind, but always made in the form of a money payment, it may be exacted at any stage in the process of taxation. ow, usually, it can be most conveniently ex- acted, for allparties, when the process of creating the produce is com- plete. If it is taken at any earlier stage, the producer has to anticipate the partition of the fruits of his labour ; and, disguise it as you will, that anticipation must be made at the expense of discount; and as the discount also is chargeable on the article, a charge made on the process enhances the price to the consumer by more than the amount of the tax. It also obliges the producer to keep a larger capital in the work. Thus it impedes both produc- tion on the one side and consumption on the other. Of course the discount, as we have called it, must be the greater the earlier the stage in the process of industry : the earliest of all stages is that which has realised "raw material" ; hence, as economists have commonly agreed, it is most objectionable to tax that raw material.
Direct taxation is based on totally different grounds. "Pro- perty " is taken as an index of the command which the owner pos- sesses over current produce ; and thus, by a refinement, direct taxation may be considered as the more indirect process. It does not impede any process of industry ; but it may be miscalculated. It would not be at all facilitated by calling land " raw material." Nor is there much chance that anybody will be talked over into deeming that raw material, which, to prove its crudity, Mr. Dis- raeli proves to have been long and elaborately cooked.
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