The incidence of a land tax like the English differs somewhat from that of the land tax as part of the general property tax, inasmuch as it stands entirely apart from the system. Still there are some points in common. Both these taxes may be capitalised. That is the taxed property will sell for less than it would bring untaxed by the amount of the capital sum which, if put at interest, would yield the amount of the tax. In the case of the general property tax, which really falls upon well nigh all land of any value whatever, the tax as we have seen falls most heavily upon the producer of agricultural commodities. But the English land tax has been capitalised and was paid for all succeeding owners by the owner at the time of its assessment, since it did not affect all lands and has become a fixed charge upon the property. The same is generally true of all taxes upon land which are in addition to a regular system of taxes a part of which covers the revenue from land.

1 For the rest of this intricate subject the student is referred to the larger treatises.

The same may be said of a special building tax.1

1 See Seligman, p. 117.

Special taxes upon certain forms of fixed capital, especially when they stand beside a general system which is fairly universal, may be capitalised in the same way. The incidence oftaxes on profits is determined by the control which the recipient of profits has over the profits. If the control is so great that he can virtually raise them at will, then he can shift the burden. But, inasmuch as it is generally true, that he is taking all that he can whether he be taxed or not, it is clear that he cannot as a rule shift them. Generally speaking, then, taxes upon profits are not shifted. A tax on successions, also, cannot in any conceivable way be shifted.

Poll or capitation taxes cannot be shifted at all. The only conceivable case in which they might be shifted is when levied upon a wage-earner at the point of starvation. The same is true ofa tax on the lowest wages. The burden would mean higher wages in order for the labourer to live and meet the tax. But when the wage-earner is of a higher class, it is to be presumed that he cannot shift his tax at all, for that presupposes that he can control his wages sufficiently to raise them. If that were the case we may safely assume that he would raise them whether the tax were imposed or not. He cannot therefore shift them at all.

A tax upon income cannot be shifted if the assessment is general and uniform. But as a matter of fact no such tax is general or uniform, and it will be shifted or not according as it splits up into other taxes upon rent, interest, wages, etc.

In conclusion : the intention of the law-giver as to the incidence of taxation will be fully realised only, (1) when the system is theoretically perfect, and (2) when the execution of the law is perfect. The worst cases of shifting arise when serious gaps are left in the tax system, or when the administration of the system is so lax in parts as to result in a crippling of the whole. Shifting always acts to intensify existing inequalities. The problems of incidence are among the most important of our subject. The law-maker may with the best of intentions work the greatest imaginable injury; and the necessity for a careful study of the probable effects of each new tax cannot be over-estimated.