TAX ON SALT

In order to vote in favour of reducing such taxes, it is necessary to start by not voting constantly in favour of more government spending.

Frédéric Bastiat
Complete Works, Volume 2, pages 225 to 228 (in French)
June 20th, 1847

In volume 2 of the Complete Works (1862), this article is erroneously dated in 1841 but it was indeed published in 1847 further to the discussions in parliament of the proposition of Auguste Demesmay who had been elected for the first time in 1842.

The reasoning by Frédéric Bastiat here pertains to the price elasticity of salt. Indeed, the discussions for or against a reduction in the tax on salt focused on the incidence it would have on the budget. The argument of those in favour of the reduction was that the increase in consumption would compensate the reduction of the tax rate (thanks to an increase of the tax base) while the protectionists argued that the price elasticity would be nil because the salt consumption was already at its peak. If the former are right, the reduction will then be beneficial because it will increase consumption (thus meeting a real need of the population) but if the latter were right, the reduction would be legitimate because it would prove that the tax is so high that the population needs to reduce its consumption of other goods in order to obtain a quantity of salt that is absolutely necessary to its survival.

This is the framework in which today’s quote inserts itself, signifying that the debate on the consequences of this tax upon the revenues of government is not appropriate if it does not include a deeper consideration upon government spending.

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