Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1890-11-18
who Pays the TariT-Tax?


To the Ed,tOr ofthe Dispatch:
In your issue of the Goth ultimo you
have q communication signed "Sub-
scriber." in which he undertakes to
show that in all cases the consumer pays
the tarif-iax. Now, please allow another
subscriber space in your paper Tor few
words in reply. "Subscnber com
mences by saying that he considered it
q seli-evident proposition that tho con-
sumer pays the tax, and he thinks ne
has proved this by stating a case IN
which the imported article has been sold
with the tax added to the price for
which it would have been sold but for
the tax. His argument, if such it can
be called, only amounts to saying that
when the consumer pays the tax he pays
it. "Subscriber makes the violent as
sumption that the seller can always put
his own price upon his goods, and
that the consumer is always compelled
to buy at that price. If that were the
case subscriber " is very liberal to the
consumer in allowing the seller only 10
per cent. profit when he could get 900
per cent. as easily as he could 10, accord
ing to Subscribers theory. "Sub-
| scriber" would be right in assuming that
the seller could put his own price on ms
| goods if there were only one seller and
! millions Of consumers. But while there
may be millions of consumers there are
also thousands of sellers. If "Sub-
scriber" has ever studied political econo-
nv ho has evidently forgotten its funda-
mental principles. lie should have
known that the prices Of things, accord
ing to the science of political economy,
are regulated by the relation Of supply
and demand and not by the arbitrary
will of the seller. Take, for In
stance, bis own illustration in which
he says the merchant sells O SUIT
of imported clothes for S33, when
he would sell them for S2S, were it not
for the import tax of s.. But, suppose
the consumer should say TO the mer.
chant 81 viii not pay that price can
buy rs good suit elsewhere for S2S,
and the merchant having larger stock
than he can carry is compelled to knock
of the import duty in order to realize,
Who then pays the tax? Why, the mer-
chant and not the consumer. Suppose,
then, this state of affairs is brought home
TO the British manufacturer and he is In
formed that he cannot get 900 for such
goods, for they cannot be sold here ex
cept at loss after paying the tax
and the supply OF the British
manufacturer exceeding the demand
and being unwilling to lose his
American market, he is compelled to put
these goods down to 3l5. Who then pay!
the tax ? Why the British manufac
tureT, because he is compelled to sell
these goods for 81 less than he would
have sold them if there had beenno tariff.
tax. Subscriber says that the goods
he mentions ore now sold in England for
500. Itwas essential to his argument
that he should have shown that they
would also sell in England at this price
under free trade. for aught he knows OF
has shown, these very goods under free
trade would sell in England for S2J. In
that case, then, according to "Sub-
scribers" own illustration, the British
manufacturer pays the tax in advance.
The British Government has heavy
|
contended that this import duty fell
wholly on the British consumer {? The
British Government knows it is tax
also on the American producer, and all
American producers of tobacco have al
ways contended the same thing as di
mlnishing tho demand in England and
lowering the price British importers are
willing to pay. The relative amount Of
this tax paid by the British consumer
and the American producer depending
again wholly on the huctuating relation
OF supply and demand. We have been
contending in Virginia for the last ten
years, and / suspect that "Subscriber
was among those SO contending, that the
internal revenue tax of cents pound
upon tobacco was an unjust and oppres-
siye tax upon producers OF tobacco. But
If "Subscriber DO right in his commu.
nication to the Dispatch, then he and
all OF Us have been wholly mistaken
about the matter, for according to hin
the consumer pays the whole OF this
tax and the producer gets just as much
for his tobacco as he would get il there
were no tax on it The truth of the
matter seems to be that when there are
enormous supplies of tobacco on hand,
or very limited demand, tho producer
pays all the tax. Reverse the case and
an enormous demand, coupled with q
very limited supply, makes the consumer
pay all the tax. But the last case sell
dom II ever occurs. The producer is
I'generally tie chief sufferer, though oc-
casionally tho tax will fall partly on the
| consumer OK partly on the lnaplfnctpxeI