But who does not see that this purely
theoretical distinction between capital, product, and income
falls so far as the treasury is concerned, and that the same
impossibilities which we have pointed out reappear here with all
their fatal character?
A manufacturer discovers a process by means of which, saving
twenty per cent. of his cost of production, he secures an income
of twenty-five thousand francs. The treasury calls on him for
fifteen thousand. He is obliged, therefore, to raise his prices,
since, by the fact of the tax, his process, instead of saving
twenty per cent., saves only eight per cent. Is not this as
if the treasury prevented cheapness? Thus, in trying to reach
the rich, the progressive tax always reaches the consumer; and it
is impossible for it not to reach him without suppressing
production altogether: what a mistake!
It is a law of social economy that all invested capital must
return continually to the capitalist in the form of interest.
With the progressive tax this law is radically violated, since,
by the effect of progression, interest on capital is so reduced
that industries are established only at a loss of a part or the
whole of the capital.
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