7.- Direct and Indirect Taxation
(a) No modification of the form of taxation can produce any important change in the relations of labour and capital.
(b) Nevertheless, having to choose between two systems of taxation, we recommend the total abolition of indirect taxes, and the general substitution of direct taxes.(1)
Because indirect taxes enhance the prices of commodities, the tradesmen adding to those prices not only the amount of the indirect taxes, but the interest and profit upon the capital advanced in their payment;
Because indirect taxes conceal from an individual what he is paying to the state, whereas a direct tax is undisguised, unsophisti-cated, and not to be misunderstood by the meanest capacity. Direct taxation prompts therefore every individual to control the governing powers while indirect taxation destroys all tendency to self-government.