Economic Sophisms/54

<pagequality level="4" user="Zoeannl" />style="background: #ececec; text-align: left; padding-left: 0.5em; font-weight: bold;" class="table-rh"protectionist sophisms are not only not true but are the very reverse of true.

If taxes are unproductive, suppress them, if you can; but assuredly the strangest mode of neutralizing their effect is to add individual to public taxes. Fine compensation truly! You tell us that the State taxes are too much; and you give that as a reason why we should tax one another!

A protective duty is a tax directed against a foreign product; but we must never forget that it falls back on the home consumer. Now the consumer is the tax-payer. The agreeable language you address to him is this: "Because your taxes are heavy, we raise the price of everything you buy; because the State lays hold of one part of your income, we hand over another to the monopolist."

But let us penetrate a little deeper into this sophism, which is in such repute with our legislators, although the extraordinary thing is that it is just the very people who maintain unproductive taxes who attribute to them our industrial inferiority, and in that inferiority find an excuse for imposing other taxes and restrictions.

It appears evident to me that the nature and effects of protection would not be changed, were the State to levy a direct tax and distribute the money afterwards in premiums and indemnities to the privileged branches of industry.

Suppose that while foreign iron cannot be sold in our market below eight francs, French iron cannot be sold for less than twelve francs.

On this hypothesis, there are two modes in which the State can secure the home market to the producer.

The first mode is to lay a duty of five francs on foreign iron. It is evident that that duty would exclude it, since it could no longer be sold under thirteen francs, namely, eight francs for the cost price, and five francs for the tax, and at that price it would be driven out of the market by French iron, the price of which we suppose to be only twelve francs. In this case, the purchaser, the consumer, would be at the whole cost of the protection.

Or again, the State might levy a tax of five francs from