HISTORICAL PRECEDENCE: ADAM SMITH AND DAVID RICARDO
An early categorization of taxation principles, which is still influential
up to the present day, stems from Adam Smith’s book of 1776 about the
“Wealth of nations”. (Smith) For our research project, especially Book V is of
importance. There he explains in part I that the sovereign/commonwealth
needs revenue to finance a standing army, in part II a system of Justice
(separated from the executive), in part III, Art 1, revenue for paying
infrastructure (“public works and institutions to facilitate commerce”); in Art
2 institutions for the education of the youth; in Art 3 institutions for the
instruction of peoples of all age, and in part IV expenses of supporting the
dignity of the sovereign. In the conclusion he emphasizes a federal principle,
i.e. that expenses done by a province or local authorities should not put at
the expense of the general public.