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The Wealth of Nations Book 5 Chapter 2 Part 2 Article 2 - Taxes on Profits of Stock
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How do governments tax profits from stock — and who really ends up paying? In this video, we’ll explore how taxes on business profits, interest, and stock work, and why they often shift the burden to consumers, investors, or landowners. We’ll explain why taxing surplus profit is difficult since businesses can raise prices or reduce interest payments to cover the cost. You'll learn why taxing stock is harder than taxing land — stock is mobile and harder to track, while land is fixed and easier to assess. We’ll also cover how different countries, like England, France, and Holland, have tried to tax profits with mixed success. France’s "taille" tax system on agricultural stock was unpredictable and often unfair, while Holland’s wealth tax worked briefly but couldn't be sustained long-term. We’ll also explore how business taxes, like those on licenses and shop owners, are usually passed to consumers through higher prices. Finally, we’ll discuss why taxing agricultural profits lowers rents rather than raising food prices and why taxes on enslaved laborers functioned similarly to agricultural stock taxes in colonial economies. Find out why taxing profits is complex — and why governments often fail to do it fairly.
Questions answered in the video:
What are the two components of profit from stock?
Why is taxing surplus profit difficult?
How does taxing stock differ from taxing land?
Why do businesses pass profit taxes to consumers?
How did England and France tax business profits differently?
Why did France’s "taille" tax system cause problems for farmers?
How do agricultural taxes reduce rents rather than increase food prices?
Why did Holland’s wealth tax work temporarily but not long-term?
How do business licenses and trade taxes affect consumer prices?
Why do taxes on enslaved laborers resemble agricultural stock taxes?
00:00 - Introduction to Taxes on the Profit of Stock
00:14 - Profits from Stock
00:56 - Interest on Money
01:36 - Countries that have tried taxing stock profits
02:16 - Hamburg, Zurich and Underwald
02:49 - Taxes in Holland
03:13 - England’s stock tax
03:33 - Taxes on specific industries
04:08 - A tax on business profits
04:52 - Taxes on Profits in France
05:36 - The French personal taille
06:12 - Taxes on profits from trade
06:41 - Farmers in France
07:23 - Household servant taxes
07:47 - Taxes on business profits
08:21 - Outro
#ProfitTax #EconomicPolicy #Taxation
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