On the Collection of Revenue [pp. 47-61]

COLLECTION OF REVENUE.
tation. And when we have moved things into what we call permanent form, they become capital-such as houses, or mills, or
improvements upon land, or gold and silver money; but still,
effort, movement or labor must be applied to keep the mills in
motion, to work the land or the mines; capital renders labor
more effective, causes it to yield a larger product, but can never
take its place.
It seems but simple justice, that the capital of the country
should bear the largest share of the taxes; but how can it be
reached? An arbitrary division is impracticable, and a tax upon
the income of capital is simply a share of the product of labor,
which product the use of the capital has increased, not thereby
displacing the labor. Labor, after all, gives the result; and a tax
upon the income of capital is simply a tax upon the labor or
effort which capital has caused to be put in motion, and thereby
rendered more effective.
Is not the income or profit of capital a charge made by capital
for the service which it renders in causing labor to be more productive? When capital took the form of a spinning jenny with
eight spindles, and displaced the old spinning. wheel of one spindle, it rendered service to labor by making it possible for labor in
one hour to produce eight.times as much as it did before. For
thie service of one hour of the spinning jenny of eight spindles,
the laborer may pay to the owner the product of four spindles,
and yet have four times as much left for his own use as he would
have had by continuing to use the single spindle. The business
being very profitable, the capitalist will continue to build spinning jennies until the demand is fully supplied; but, if you take a
portion of his income by a tax, the rate at which he will build
spinning jennies is retarded, and his share of the product is maintained much longer at a high point; so that ultimately the labor
will have paid the tax in the form of a higher rate of profit upon
capital than it could otherwise have commanded.
Capital is of no use to the owner, when hoarded; it must be put
into some form in which it can render a service to labor; and, as
wealth or capital accumulates in a geometrical ratio, while population or labor only increases in an arithmetical ratio, the rate of
interest or profit which capital can command must be continually
less and less, if the whole matter is left to natural law. On the
other hand, labor may continue to work wearily at the spinning
wheel of one spindle, until supplemented by capital in the form of
a jenny, and will do so, unless some one, by an effort of invention
or superior industry, provide suceh a machine.
It is a well understood rule, that the rate of interest or profit
which capital can command of labor, for its annual use, is in the
proportion which accumulated capital bears to the number of
persons desiring its use; and their desire is in proportion to their
intelligence and education. This law which regulates the profits
of capital is fully proved by the high rates of interest always
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