THE INCIDENCE OF TAXATION 289

knowledge of the proportions of the incomes of different
classes of citizens which are absorbed by tax payments, and
to adopt such forms of taxation as are likely to yield a
result in conformity with the standards of equity which are
recognised, as well as to be convenient from the point of view
of the tax-levying authority.
It is of importance, too, to remember that, though
competition may, after the lapse of a sufficient period of
time, effect the transfer of tax burdens to such classes as
may be indicated in discussions resembling the foregoing, the
burden may, for a long period, be placed elsewhere. It is
by no means a matter of indifference how the first impact of
a tax may be arranged. Even the final incidence is not independent
 of the first impact, on account of the imperfections
of competition, and the economic weakness of some classes
which is one of the causes of such failures to arrive at perfect
competition. The general maxim, that taxes which have
been for a long time in operation have the burdens resulting
from them distributed with a close approach to equity
among different classes, is worthy of particular attention.
It is based on the view that, if any industry be specially
favoured or penalised by the working of the tax, there will
be brought about a transfer of productive power to the
favoured industry, or from the penalised one, making competition
 keener in the one, less acute in the other, and thus
proportioning the remuneration in each to the efforts and
abstinences imposed by each. This view is certainly a sound
one, though the maxim has not a universal applicability.
To illustrate the imperfection and slowness with which
readjustment of burdens occurs, let us briefly consider some
features of a tax on houses proportioned to their annual
rental value. If the tax be originally imposed on the owners,
it will reduce the profits of house-proprietorship, and check
the increase of rentable property : it will, further, stimulate to
the reduction of expenditure in construction, in order to
meet those who are more willing to accept a house offering
less convenience than able to pay increased rent. In so far,
too, as house building is checked, the demand for suitable
sites will be reduced, and the owners of such sites may
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