Winston Churchill, like Benjamin Franklin and Mark Twain, has been the putative source of many a pseudonymous or misattributed quotation. However, one of his best-known aphorisms about taxes is authentic – but misunderstood.

Churchill did, in fact, say, “To think you can make a man richer by putting on a tax is like a man thinking that he can stand in a bucket and lift himself up by the handle.” The quotation has had a long and storied history in U.S. politics, where it is not always accurately quoted. The truism applies to e or wealth taxes. But Churchill’s topic was not actually taxation – at least, not as we think about it.

His es from a speech Churchill gave to the Free Trade League on February 19, 1904 – the same year he defected to the Liberal Party. Churchill said:

It is the theory of the Protectionist that imports are an evil. He thinks that if you shut out the foreign-imported manufactured goods you will make these goods yourselves, in addition to the goods which you make now, including those goods which we make to exchange for the foreign goods e in. If a man can believe that he can believe anything. [Laughter.] We Free-traders say it is not true. To think you can make a man richer by putting on a tax is like a man thinking that he can stand in a bucket and lift himself up by the handle.

Free trade wagers, correctly, that there more jobs to be had creating goods to sell on the global market than from focusing exclusively on domestic consumption. Trade wars often destroy the residue of jobs created by exports.

Churchill understood that tariffs are taxes paid by consumers. By driving up prices, tariffs force people to purchase less at a higher cost. Meanwhile, the increased sales volume is enjoyed, not usually by the tariff-imposing nation, but by the next-lowest-priced producer allowed pete in its market.

Like much of what Churchill said, this quotation deserves to be remembered – in its proper wording and context.

You can read his full speech here.

Minister Winston Churchill, taken between 1939 and 1945. Public domain.)