Which one of the following canons of taxation was not advocated by Adam Smith in his classic work on the wealth of nations?

Introduction / Context:
Adam Smith, often called the father of modern economics, laid down certain principles for a good tax system in his classic work on the wealth of nations. These principles are known as canons of taxation and are frequently tested in examinations on public finance and Indian economy. This question asks which of the listed canons was not part of Adam Smith original set.

Given Data / Assumptions:

• The options mention canon of equity, canon of certainty, canon of convenience and canon of fiscal adequacy.
• Adam Smith is known to have proposed a specific set of four canons in his work.
• We assume that the learner is familiar with those four original canons.

Concept / Approach:
Adam Smith classical canons are often summarised as equity, certainty, convenience and economy. Later writers have added additional canons such as productivity, elasticity and fiscal adequacy. Therefore, by comparing the classical list to the options, we can identify which one belongs to later additions rather than to Adam Smith original formulation. That later addition is canon of fiscal adequacy.

Step-by-Step Solution:
Step 1: Recall Adam Smith four basic canons of taxation: equity, certainty, convenience and economy. Step 2: Equity means that taxes should be in proportion to the ability to pay, ensuring fairness. Step 3: Certainty means the tax which each individual must pay ought to be certain and not arbitrary in amount or time of payment. Step 4: Convenience means that every tax should be levied at the time and manner that is most convenient for the taxpayer. Step 5: Economy means that the cost of collection should be as small as possible relative to the tax revenue collected. Step 6: Option A, canon of equity, is clearly one of Adam Smith canons. Step 7: Option B, canon of certainty, is also one of Adam Smith original canons. Step 8: Option C, canon of convenience, is again part of the original list. Step 9: Option D, canon of fiscal adequacy, is a later addition by other economists who emphasised that the tax system should yield adequate revenue for government expenditure, but it is not one of Adam Smith four classic canons. Step 10: Therefore the correct answer is canon of fiscal adequacy.

Verification / Alternative check:
Any standard public finance or Indian economy textbook summarises Adam Smith contribution by listing the four canons and often contrasts them with additional canons suggested later. The four listed almost always match the words equity, certainty, convenience and economy. Fiscal adequacy appears in these texts under the heading of modern or additional canons. This pattern confirms that fiscal adequacy was not part of the original Smithian list.

Why Other Options Are Wrong:

• Canon of equity is one of the classic canons, focusing on fairness of taxation.
• Canon of certainty is clearly mentioned by Adam Smith to avoid arbitrariness.
• Canon of convenience is another original canon, dealing with ease of payment for taxpayers.

Common Pitfalls:
Learners sometimes confuse canon of economy with fiscal adequacy, thinking that both sound like concerns about government finances. Economy, however, is about minimising collection costs, while adequacy is about sufficient revenue. Another pitfall is to memorise lists from different authors without distinguishing which items were proposed by Adam Smith and which were developed later. A simple memory aid is to remember the initials E, C, C, E (equity, certainty, convenience, economy) as the four classic canons.

Final Answer:
Canon of fiscal adequacy