axation were announced by Adam Smith
more than a hundred years ago, and have commended themselves to students
of the subject ever since. It is evident that the last three are more
explicit methods for carrying out the first. Most briefly stated; they
imply equity, definiteness, convenience of paying, and economy in
collecting.

Most legislation with reference to taxes shows some effort to carry out
one, if not all, of these requirements. It is evident that a tax may be
conveniently paid in connection with ordinary expenditures, and at the
same time be very indefinite and quite inequitable. Many taxes upon
articles of every-day use in the home are of this nature. A very equitable
tax may be so inconvenient from its interference with private interests,
and require so many officials for collection, as to make it a serious
burden to all. Such a tax would be one levied upon net income, supposing
it possible to discover the exact facts for such a levy. Taxes levied
without consideration of these principles are defended as means of
checking extravagance or vice, as equalizing other conditions of welfare,
or as correcting inequalities from other existing methods of taxation.
Even these last assume the necessity of equity in the entire system or
group of systems.

_Direct and indirect taxation._--For convenience of study, taxes are spoken
of as either direct or indirect; that is, a tax may be levied upon one
whose property or earnings must be reduced by the amount of the tax, or a
tax may be levied upon one whose property when sold, or whose service when
rendered to another, will be worth as much more as the burden of the tax
he has paid. A poll tax, an income tax, a tax on the farm, or a tax on
household goods and jewelry, is assumed to be paid by the owner or user,
without reimbursement. But a tax on stock in trade--like the farmer's live
stock--or upon the machinery of production or service--like railroads,
insurance companies and banks--is assumed to be transferred as an
additional expense to the one who finally enjoys the wealth.

It is easy to see that such a distinction is difficult. Every owner of
wealth will consider taxes connected with its possession a part of the
cost of such wealth, and wherever possible in the conditions of the market
will count a tax in the selling price. It is impossible to judge from the
form of wealth or the nature of the service when the tax can be
transferred to a final user. A farmer's whe