17: Taxes on Commodities (other than raw produce)
The tax on any commodity, necessity or luxury, will result in an increase of the price of that commodity, as it constitutes an expense to a producer who will seek to preserve his income, and must seek to cover his expenses, from the revenue he derives from the sale of his product.
It is suggested that a tax on necessities will also increase the required income (wages or profits) of all individuals in a market, increasing the prices of other goods; and it has been suggested that a tax on luxuries has no such effect. (EN: Though there is some conjecture, as what is considered a necessity or luxury is highly subjective to the person who decides what they "need" and what income is necessary to obtain it.)
All taxes levied on a nation divert capital from productive to nonproductive activities; and when a nation borrows to pay an expense, the diversion takes place over the course of a number of years rather than all at once, and with interest. If the nation borrows from a domestic creditor, the working capital removed from the working capital of the nation, which may have been put to productive use.
There's a bit of a ramble that seems to address government promotion of industry: grants and favorable loans are extended to some who would ostensibly make productive use of it and taken from those who have no more productive use of it. This is entirely conjecture and propaganda, as there is little way to ascertain that one will in fact make more productive use of capital than the other might have. (EN: Ricardo seems to balk at going further, but I don't think it would be inaccurate to say it's rare that any undertaking that requires public funding is actually productive - if it had any merit, there would be no lack of private funding.)
Ricardo points to a number of problems with state debt: that having unlimited credit makes politicians and supporters of certain causes less thrifty, burdens the future, and other factors that make debt by the state as bad a notion as debt by any individual, but compounded by the fact that the state can arbitrarily refuse to pay interests, or repay debts at all, leaving creditors with no resource, or to burden the public with heavy taxes or debase the national currency.
"A country that has accumulated a large debt is placed in a most artificial situation," Ricardo observes. The greater amount of capital that must be directed to repaying the debt, to ensure credit can be obtained in future, cripples the productive faculties of a nation, on which the state must depend to generate capital to repay the debt, and encourages those who have capital to move its investment overseas to achieve better returns rather than investing in domestic production. In Ricardo's time, as in the present one, economics are the primary reason for the emigration of people among nations: where the present and future misery arise from past debt, people simply remove themselves to a less burdened market.
Neither is it possible to mitigate the detrimental effects of fiscally irresponsibility by the state. Even where the state amasses a sinking fund to retire debt, or a war chest to spend from without incurring debt, this capital has still been removed from the productive sectors of the economy. To overburden citizens with taxation to provide for future spending is no less reprehensible than to burden them with taxation to pay for past spending - and is likely worse, as any war chest becomes a surplus to be mismanaged and squandered.
Another digression considers "monopoly pricing", which is the very highest price customers are willing to pay to purchase a given good. (EN: This seems nonsensical - as any price in a free market is the highest that buyers will pay and the lowest sellers will accept.) More specifically, Ricardo considers it to be the price that is paid when the quantity of a good is fixed (EN: Which is also nonsensical - as present quantity is always fixed and future quantity is never so.) He then makes a more sensible assertion, that certain goods are available in much shorter supply than they are demanded (such as exquisite wines) and their rarity causes the price to be inflated well beyond the cost of production.
Except in times of disaster, raw produce and basic necessities are rarely monopoly price: their plentitude ensures that the price demanded is driven more by costs of production and required return on capital than any premium by discrepancies in supply and demand. As such, there is competition among many sellers to counterbalance the competition among many buyers, and some quantity will remain unsold unless an agreement can be struck.
It is theoretically possible for raw produce to become monopoly priced, but this occurs only when every acre of land that can be employed in their production is in use and the quantity cannot be increased by domestic production, nor can any amount be added by importation. In this unlikely event, the price of a good exceeds its costs significantly, and the addition of taxation is likely to reduce the excess profits of the seller rather than increasing the price to the buyer.
All of this seems to be in rebuttal to some of Ricardo's contemporaries, who theorized that commodities are always at monopoly prices to suggest taxes fall on the landlord rather than the consumer. The details go on for a while, but ultimately, the arguments that such taxes fall on any other person are merely playing with the accounting of costs to suggest a party other than the consumer would bear the cost of taxation.
(EN: Given the amount of churn here, I am led to believe that there can be no universal answer. The tax is levied directly on one party, but the degree to which they diminish their own income and the degree to which they increase their prices to other parties will vary, to the extent that they can absorb or tolerate the loss.)