consumption tax

is always the least burdensome, because it is the least felt, and is borne by those who are both willing and able to pay.

Taxes on consumption are always least burdensome, because they are least felt, and are borne too by those who are both willing and able to pay them... that of all taxes on consumption, those on foreign commerce are most compatible with the genius and policy of free States. JAMES MADISON (1751-1836) Address to the States, April 25, 1783

is beneficial in that very few people are provident in laying aside lump sums of money. Direct taxation threatens to take away a mans business. It makes far more sense to collect taxes when a man is taking his pleasure, and feels generous.

Direct taxation can go but little way towards raising a revenue. To raise money in this way, people must be provident... they must be constantly laying up money to answer the demands of the collector. But you cannot make people thus provident... if you would do anything to purpose you must come in when they are spending, and take a part with them. This does not take away the tools of a man's business, or the necessary utensils of his family: It only comes in when he is taking his pleasure, and feels generous. OLIVER ELLSWORTH (1745-1807) Connecticut Ratifying Convention, 1788

has the advantage that it contain in its own nature a security against excess, in that if too high, consumption goes down and lessens revenue, thus defeating the original purpose of the tax.

It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit... which cannot be exceeded without defeating the end proposed-that is an extension of the revenue. . . . If duties are too high, they lessen the consumption... the collection is eluded... and the product to the treasury is not so great as when they are confined within proper and moderate bounds. ALEXANDER HAMILTON The Federalist Papers 1787

consumption tax, n.Definitions

consumption tax