ABSTRACT
In this chapter the author explains general principles of taxation. He directs people's attention to some of the errors, involving general principles, which, in fact, arise from a wrong way of looking at the subject, and which are, consequently, and sources of an infinite number of minor errors in the cases where these mistaken principles come to be applied. The first error is that of looking upon government as trading in taxation; that is, endeavouring to obtain largest sum possible to be raised without rebellion. The next theory respecting taxation that requires to be noticed, is one connected with Protectionism. The best way of understanding what is meant by a perfect income tax is to consider the taxes which are imposed directly on income in United Kingdom. When the cost of collecting an income tax in individual cases approaches the amount collected, as it does in the cases of very small incomes, it is mere pedantic cruelty to collect it.
