It is a singular 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 purposed - that is, an extension of the revenue.
Interpretation
Consumption taxes limit excessive spending by defining boundaries for revenue generation.
The quote highlights the inherent benefit of consumption taxes, which are designed to prevent overindulgence while simultaneously facilitating government revenue. By imposing taxes on goods and services, these taxes create a natural check on excessive consumption; if consumers were to exceed the limits set by these taxes, their spending would ultimately lead to a reduction in revenue, undermining the very purpose of these taxes. In essence, taxes on consumption serve both as a regulatory measure and a tool for economic stability.
In practice
In a discussion about fiscal policy, this quote can be used to illustrate the nature of consumption taxes.
When men, engaged in unjustifiable pursuits, are aware that obstructions may come from a quarter which bare apprehension of opposition from doing what they would with eagerness rush into if no such external impediments were to be feared.
The tendency of a national bank is to increase public and private credit. The former gives power to the state, for the protection of its rights and interests: and the latter facilitates and extends the operations of commerce among individuals. Industry is increased, commodities are multiplied, agriculture and manufacturers flourish: and herein consists the true wealth and prosperity of a state.
It's not tyranny we desire; it's a just, limited, federal government.
The Achaeans soon experienced, as often happens, that a victorious and powerful ally is but another name for a master.
The people are turbulent and changing; they seldom judge right or make good decision.
The true principle of a republic is that the people should choose whom they please to govern them. Representation is imperfect, in proportion as the current of popular favor is checked. The great source of free government, popular election, should be perfectly pure, and the most unbounded liberty allowed.
I've never believed protectionism of that kind will lead us anywhere. I think you can have certain specific rules for engaging with India.. for example, not allowing mineral resources to be taken out of the country.. but there is not a shred of doubt in my mind that when you open an economy you should do it in totality. Foreign investment adds a sense of competition; we should see this as a wake-up call to modernise and upgrade. Companies that do not will undoubtedly die.
Credit is a promise to deliver money. It will produce GDP but you'll create credit... So you reach a certain point that that you can't do that anymore... There are choices. And how do we best support, apportion the money? How much is going to be transferred?
It is credit that matters, not money (in other words, monetarism is a false ideology).
Socialism failed because it couldn't tell the economic truth. Capitalism may fail because it couldn't tell the ecological truth.
When people from organizations like the World Bank descended on Third World countries, they always tried to remove obstacles to development, to reduce economic anxiety and uncertainty.
We will not have any more crashes in our time.
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