The Fairfield herald. [volume] (Winnsboro, S.C.) 1849-1876, 1867-02-20
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Who Pays the Cotton Tax7

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Who Pays the Cotton Tax2
Having been led to the conclusion
that the cotton producer in Fairfield
pays the tax of three cents as pro-
ducer, or in other words, that the tax
is direct one and each one pays in
proportion TO the amount of property
in cotton he holds, we arc now to no.
tice another relation sustained by the
producer to tho income derived by
Government or by trade from the ar
ticlo of cotton.
The first point deserving attention
is that every cotton producer in Fair
field is also q consumer. This is a
point giving risc to considerable con
fusion. The confusion is in confound-
ing direct with an indirect tax.
There can, however, be no conflicting
here. Either the producer pays oil
tho tax, or the consumer does it,, An
cxafhplo will perhaps best illustrate
this proposition.
Assuming that free trade is ostab.
lishcd between the United States and
England, the producer would realize
q profit upon his cotton equal to the
amount he received for it in Liverpool,
less the costs of production and trans
portation. Of course that profit
would be In proportion to the cost of
production with the demand for cot
ton. But now suppose revenue
duty to be imposed to tho amount Of
three cents pound. 1t is certain
that the importer of cotton goods
must pay in addition to the profits al
lowed by demand, thrco moro cents
moro cents upon his manufactured
cotton goods than he otherwise would
have to do. Now if that importer is
only consumer, as for example q
planter, he has of course tho revenue
topay upon cotton cloth, and he only
has it to pay. It's true, contingcn-
cics may arise when cotton goods may
be bought by tho consumer and he
not have the duty to pay, MS when II
broken merchant is sold out at public
out-cry below cost.
But suppose in addition to tho tar
iif upon cotton goods, tax of three
cents pound is imposed upon tho
raw material, Which is really now tho
cnsc--does tho producer pay part OF
that three cents and The consumer an
other part : Is tho tax divided be-
twcon thom or does tho producer pay
tho whole Of that tax2
OF course our remarks apply now
particularly, to the cotton producer Of
Fairfield. They arc applicable to
what is really tho case hero now, and
not to what might be tho case if so and
so wcrc true.
If cotton producers could control
tho demand for cotton by controlling
its supply, they could then mako the
burden of direct tax Of thrco cents
pound fall upon the consumer.
But they have no ooatrol whatever
over tho demand.
A supposablc case Of control might
arise under the following circumstan-
ccs If ovcry mill in England and
the North wcro still to-day for the
want of raw cotton, and overy pro-
duccr in the South and in all other
countries where cotton is grown, held
the cotton and had no immediate use
for tho money, then tho cost of produc-
tion, and the tax of three cents, as
we'll rs fair profit upon the capital
invested in cotton, might bc realized.
But such q case is not possible, aud
therefore any additional cost to the
producer in tho way of n tax upon the
raw material, is that much added to
the cost of production, and tho whole
of it must be paid by the producer,
without probable reimbursement by
tho consumer.
Our remarks are made more to
draw out discussion upon tho subject
involved that MS final exposition of
tho principles in political economy
embraced in it.