Direct Taxation Was a (Classical) Liberal Project of Governance Producing Small Government and Engaged Tax Payers Who Closely Scrutinized Government Spending

Fiscal restraint was one way of reining in local governments, in keeping with Macdonald's larger scheme for centralizing as much power as he could. Taxpayers did not feel indirect taxation so intimately and so governments that taxed indirectly could extract more and rationalize less. Direct taxation was a liberal project of governance: it tended to produce small government and vigilant, engaged tax payers who closely scrutinized government spending. English Liberal leader William Gladstone embraced direct taxation and so did George Brown in the Globe, which regularly asserted, in the words of a public meeting at Glenmorris, South Dumfries, in 1867, "Protective duties are unjust in principle and mischievous in practice." In British Columbia, John Sebastian Helmecken opposed Confederation and favoured direct taxation. And, as Andrew Smith has observed, opponents of Confederation across British North America recognized that the scheme was likely to lead to inflated federal taxes and it would not only perpetuate, but expand Macdonald's high-spending ways.

--E.A. Heaman, "Macdonald and Fiscal Realpolitik," in Macdonald at 200: New Reflections and Legacies, ed. Patrice Dutil and Roger Hall (Toronto: Dundurn, 2014), 198.