after the tax than before it, so, for the same 
reason, a tax upon the interest of money could 
not raise the rate of interest; the quantity of 
stock or money in the country, like the quantity 
of land, being supposed to remain the 
same after the tax as before it. The ordinary 
rate of profit, it has been shewn, in the 
first book, is everywhere regulated by the 
quantity of stock to be employed, in proportion 
to the quantity of the employment, or of 
the business which must be done by it. But 
the quantity of the employment, or of the business 
to be done by stock, could neither be 
increased nor diminished by any tax upon the 
interest of money. If the quantity of the 
stock to be employed, therefore, was neither 
increased nor diminished by it, the ordinary 
rate of profit would necessarily remain the 
same. But the portion of this profit, necessary 
for compensating the risk and trouble of 
the employer, would likewise remain the same; 
that risk and trouble being in no respect altered
The residue, therefore, that portion 
which belongs to the owner of the stock, and 
which pays the interest of money, would necessarily 
remain the same too. At first sight
therefore, the interest of money seems to be a 
subject as fit to be taxed directly as the rent 
of land
There are, however, two different circumstances
which render the interest of money
much less proper subject of direct taxation 
than the rent of land
First, the quantity and value of the land 
which any man possesses, can never be a secret
and can always be ascertained with great 
exactness. But the whole amount of the capital 
stock which he possesses is almost always 
a secret, and can scarce ever be ascertained 
with tolerable exactness. It is liable, besides, 
to almost continual variations. A year seldom 
passes away, frequently not a month, 
sometimes scarce a single day, in which it does 
not rise or fall more or less. An inquisition 
into every man's private circumstances, and 
an inquisition which, in order to accommodate 
the tax to them, watched over all the 
fluctuations of his fortune, would be a source 
of such continual and endless vexation as no 
person could support. 
Secondly, land is a subject which cannot be 
removed; whereas stock easily may. The 
proprietor of land is necessarily a citizen of 
the particular country in which his estate lies
The proprietor of stock is properly a citizen 
of the world, and is not necessarily attached 
to any particular country. He would be apt 
to abandon the country in which he was exposed 
to a vexatious inquisition, in order to 
be assessed to a burdensome tax; and would 
remove his stock to some other country, where 
he could either carry on his business, or enjoy 
his fortune more at his ease. By removing 
his stock, he would put an end to all the 
industry which it had maintained in the country 
which he left. Stock cultivates land; stock 
employs labour. A tax which tended to drive 
away stock from any particular country, would 
so far tend to dry up every source of revenue, 
both to the sovereign and to the society
Not only the profits of stock, but the rent 
of land, and the wages of labour, would necessarily 
be more or less diminished by its removal
The nations, accordingly, who have attempted 
to tax the revenue arising from 
stock, instead of any severe inquisition of this 
kind, have been obliged to content themselves 
with some very loose, and, therefore, more or 
less arbitrary estimation. The extreme inequality 
and uncertainty of a tax assessed in 
this manner, can be compensated only by its 
extreme moderation; in consequence of 
which, every man finds himself rated so very 
much below his real revenue, that he gives 
himself little disturbance though his neighbour 
should be rated somewhat lower. 
By what is called the land tax in England
it was intended that the stock should be taxed 
in the same proportion as land. When the 
tax upon land was at four shillings in the 
pound, or at one-fifth of the supposed rent
it was intended that stock should be taxed at 
one-fifth of the supposed interest. When the 
present annual land tax was first imposed, the 
legal rate of interest was six per cent. Every 
hundred pounds stock, accordingly, was supposed 
to be taxed at twenty-four shillings, 
the fifth part of six pounds. Since the legal 
rate of interest has been reduced to five per 
cent. every hundred pounds stock is supposed 
to be taxed at twenty shillings only. The 
sum to be raised, by what is called the land 
tax, was divided between the country and the 
principal towns. The greater part of it was 
laid upon the country; and of what was laid 
upon the towns, the greater part was assessed 
upon the houses. What remained to be 
assessed upon the stock or trade of the towns 
(for the stock upon the land was not meant 
to be taxed) was very much below the real 
value of that stock or trade. Whatever inequalities, 
therefore, there might be in the original 
assessment, gave little disturbance
Every parish and district still continues to be 
rated for its land, its houses, and its stock
according to the original assessment; and 
the almost universal prosperity of the country
which, in most places, has raised very much 
the value of all these, has rendered those 
inequalities of still less importance now. The 
rate, too, upon each district, continuing always 
the same, the uncertainty of this tax
so far as it might be assessed upon the stock 
of any individual, has been very much diminished
as well as rendered of much less 
consequence. If the greater part of the lands 
of England are not rated to the land tax at 
half their actual value, the greater part of the 
stock of England is, perhaps, scarce rated at