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# Tax on Necessaries

## Definition

A tax imposed on goods that are essential for life or considered necessary
by social custom, which raises the price of these goods and consequently the
wages of labour, ultimately falling on landlords through reduced rent and
on consumers through higher prices.

## Source Chapter

Book V, Chapter 2

## Context

Smith argues that taxes on necessaries are particularly burdensome because
they affect the poor most heavily and raise the cost of production throughout
the economy, making them less desirable than taxes on luxuries.

## Economic Domain

General Theory

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