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    Book V: Chapter 2

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    Chapter 35
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    The revenue which must defray, not only the expense of defending
    the society and of supporting the dignity of the chief
    magistrate, but all the other necessary expenses of government,
    for which the constitution of the state has not provided any
    particular revenue may be drawn, either, first, from some fund
    which peculiarly belongs to the sovereign or commonwealth, and
    which is independent of the revenue of the people ; or, secondly,
    from the revenue of the people.

    PART I.

    Of the Funds, or Sources, of Revenue, which may peculiarly belong
    to the Sovereign or Commowealth.

    The funds, or sources, of revenue, which may peculiarly belong to
    the sovereign or commonwealth, must consist, either in stock, or
    in land.

    The sovereign, like, any other owner of stock, may derive a
    revenue from it, either by employing it himself, or by lending
    it. His revenue is, in the one case, profit, in the other

    The revenue of a Tartar or Arabian chief consists in profit. It
    arises principally from the milk and increase of his own herds
    and flocks, of which he himself superintends the management, and
    is the principal shepherd or herdsman of his own horde or tribe.
    It is, however, in this earliest and rudest state of civil
    government only, that profit has ever made the principal part of
    the public revenue of a monarchical state.

    Small republics have sometimes derived a considerable revenue
    from the profit of mercantile projects. The republic of Hamburgh
    is said to do so from the profits of a public wine-cellar and
    apothecary's shop.{See Memoires concernant les Droits et
    Impositions en Europe, tome i. page 73. This work was compiled by
    the order of the court, for the use of a commision employed for
    some years past in considering the proper means for reforming the
    finances of France. The account of the French taxes, which takes
    up three volumes in quarto, may be regarded as perfectly
    authentic. That of those of other European nations was compiled
    from such information as the French ministers at the different
    courts could procure. It is much shorter, and probably not quite
    so exact as that of the French taxes.} That state cannot be very
    great, of which the sovereign has leisure to carry on the trade
    of a wine-merchant or an apothecary. The profit of a public bank
    has been a source of revenue to more considerable states. It
    has been so, not only to Hamhurgh, but to Venice and Amsterdam. A
    revenue of this kind has even by some people been thought not
    below the attention of so great an empire as that of Great
    Britain. Reckoning the ordinary dividend of the bank of England
    at five and a-half per cent., and its capital at ten millions
    seven hundred and eighty thousand pounds, the neat annual profit,
    after paying the expense of management, must amount, it is said,
    to five hundred and ninety-two thousand nine hundred pounds.
    Government, it is pretended, could borrow this capital at three
    per cent. interest, and, by taking the management of the bank
    into its own hands, might make a clear profit of two hundred and
    sixty-nine thousand five hundred pounds a-year. The orderly,
    vigilant, and parsimonious administration of such aristocracies
    as those of Venice and Amsterdam, is extremely proper, it appears
    from experience, for the management of a mercantile project of
    this kind. But whether such a government us that of England,
    which, whatever may be its virtues, has never been famous for
    good economy; which, in time of peace, has generally conducted
    itself with the slothful and negligent profusion that is,
    perhaps, natural to monarchies ; and, in time of war, has
    constantly acted with all the thoughtless extravagance that
    democracies are apt to fall into, could be safely trusted with
    the management of such a project, must at least be a good deal
    more doubtful.

    The post-office is properly a mercantile project. The government
    advances the expense of establishing the different offices, and
    of buying or hiring the necessary horses or carriages, and is
    repaid, with a large profit, by the duties upon what is carried.
    It is, perhaps, the only mercantile project which has been
    successfully managed by, I believe, every sort of government. The
    capital to be advanced is not very considerable. There is no
    mystery in the business. The returns are not only certain but

    Princes, however, have frequently engaged in many other
    mercantile projects, and have been willing, like private persons,
    to mend their fortunes, by becoming adventurers in the common
    branches of trade. They have scarce ever succeeded. The profusion
    with which the affairs of princes are always managed, renders it
    almost impossible that they should. The agents of a prince regard
    the wealth of their master as inexhaustible; are careless at what
    price they buy, are careless at what price they sell, are
    careless at what expense they transport his goods from one place
    to another. Those agents frequently live with the profusion of
    princes ; and sometimes, too, in spite of that profusion, and by
    a proper method of making up their accounts, acquire the fortunes
    of princes. It was thus, as we are told by Machiavel, that
    the agents of Lorenzo of Medicis, not a prince of mean abilities,
    carried on his trade. The republic of Florence was several
    times obliged to pay the debt into which their extravagance had
    involved him. He found it convenient, accordingly to give up the
    business of merchant, the business to which his family had
    originally owed their fortune, and, in the latter part of his
    life, to employ both what remained of that fortune, and the
    revenue of the state, of which he had the disposal, in projects
    and expenses more suitable to his station.

    No two characters seem more inconsistent than those of trader and
    sovereign. If the trading spirit of the English East India
    company renders them very bad sovereigns, the spirit of
    sovereignty seems to have rendered them equally bad traders.
    While they were traders only, they managed their trade
    successfully, and were able to pay from their profits a moderate
    dividend to the proprietors of their stock. Since they became
    sovereigns, with a revenue which, it is said, was originally more
    than three millions sterling, they have been obliged to beg the
    ordinary assistance of government, in order to avoid immediate
    bankruptcy. In their former situation, their servants in India
    considered themselves as the clerks of merchants ; in their
    present situation, those servants consider themselves as the
    ministers of sovereigns.

    A state may sometimes derive some part of its public revenue from
    the interest of money, as well as from the profits of stock. If
    it has amassed a treasure, it may lend a part of that treasure,
    either to foreign states, or to its own subjects.

    The canton of Berne derives a considerable revenue by lending a
    part of its treasure to foreign states, that is, by placing it in
    the public funds of the different indebted nations of Europe,
    chiefly in those of France and England. The security of this
    revenue must depend, first, upon the security of the funds in
    which it is placed, or upon the good faith of the government
    which has the management of them; and, secondly, upon the
    certainty or probability of the continuance of peace with the
    debtor nation. In the case of a war, the very first act of
    hostility on the part of the debtor nation might be the
    forfeiture of the funds of its credit or. This policy of lending
    money to foreign states is, so far as I know peculiar to the
    canton of Berne.

    The city of Hamburgh {See Memoire concernant les Droites et
    Impositions en Europe tome i p. 73.}has established a sort of
    public pawn-shop, which lends money to the subjects of the state,
    upon pledges, at six per cent. interest. This pawn-shop, or
    lombard, as it is called, affords a revenue, it is pretended, to
    the state, of a hundred and fifty thousand crowns, which, at four
    and sixpence the crown, amounts to £33,750 sterling.

    The government of Pennsylvania, without amassing any treasure,
    invented a method of lending, not money, indeed, but what is
    equivalent to money, to its subjects. By advancing to private
    people, at interest, and upon land security to double the value,
    paper bills of credit, to be redeemed fifteen years after their
    date ; and, in the mean time, made transferable from hand to
    hand, like banknotes, and declared by act of assembly to be a
    legal tender in all payments from one inhabitant of the province
    to another, it raised a moderate revenue, which went a
    considerable way towards defraying an annual expense of about
    £4,500, the whole ordinary expense of that frugal and orderly
    government. The success of an expedient of this kind must
    have depended upon three different circumstances: first, upon the
    demand for some other instrument of commerce, besides gold and
    silver money, or upon the demand for such a quantity of
    consumable stock as could not be had without sending abroad the
    greater part of their gold and silver money, in order to purchase
    it; secondly, upon the good credit of the government which made
    use of this expedient ; and, thirdly, upon the moderation with
    which it was used, the whole value of the paper bills of credit
    never exceeding that of the gold and silver money which would
    have been necessary for carrying on their circulation, had there
    been no paper bills of credit. The same expedient was, upon
    different occations, adopted by several other American colonies;
    but, from want of this moderation, it produced, in the greater
    part of them, much more disorder than conveniency.

    The unstable and perishable nature of stock and credit, however,
    renders them unfit to be trusted to as the principal funds of
    that sure, steady, and permanent revenue, which can alone give
    security and dignity to government. The government of no great
    nation, that was advanced beyond the shepherd state, seems ever
    to have derived the greater part of its public revenue from such

    Land is a fund of more stable and permanent nature ; and the rent
    of public lands, accordingly, has been the principal source of
    the public revenue of many a great nation that was much advanced
    beyond the shepherd state. From the produce or rent of the public
    lands, the ancient republics of Greece and Italy derived for a
    long the the greater part of that revenue which defrayed the
    necessary expenses of the commonwealth. The rent of the crown
    lands constituted for a long time the greater part of the revenue
    of the ancient sovereigns of Europe.

    War, and the preparation for war, are the two circumstances
    which, in modern times, occasion the greater part of the
    necessary expense or all great states. But in the ancient
    republics of Greece and Italy, every citizen was a soldier, and
    both served, and prepared himself for service, at his own
    expense. Neither of those two circumstances, therefore, cou1d
    occasion any very considerable expense to the state. The rent of
    a very moderate landed estate might be fully sufficient for
    defraying all the other necessary expenses of government.

    In the ancient monarchies of Europe, the manners and customs of
    the time sufficiently prepared the great body of the people for
    war; and when they took the field, they were, by the condition of
    their feudal tenures, to be maintained either at their own
    expense, or at that of their immediate lords, without bringing
    any new charge upon the sovereign. The other expenses of
    government were, the greater part of them, very moderate. The
    administration of justice, it has been shewn, instead of being a
    cause of expense was a source of revenue. The labour of the
    country people, for three days before, and for three days after,
    harvest, was thought a fund sufficient for making and maintaining
    all the bridges, highways, and other public works, which the
    commerce of the country was supposed to require. In those
    days the principal expense of the sovereign seems to have
    consisted in the maintenance of his own family and household. The
    officers of his household, accordingly, were then the great
    officers of state. The lord treasurer received his rents.
    The lord steward and lord chamberlain looked after the expense of
    his family. The care of his stables was committed to the lord
    constable and the lord marshal. His houses were all built in the
    form of castles, and seem to have been the principal fortresses
    which he possessed. The keepers of those houses or castles might
    be considered as a sort of military governors. They seem to have
    been the only military officers whom it was necessary to maintain
    in time of peace. In these circumstances, the rent of a great
    landed estate might, upon ordinary occasions, very well defray
    all the necessary expenses of government.

    In the present state of the greater part of the civilized
    monarchies of Europe, the rent of all the lands in the country,
    managed as they probably would be, if they all belonged to one
    proprietor, would scarce, perhaps, amount to the ordinary revenue
    which they levy upon the people even in peaceable times. The
    ordinary revenue of Great Britain, for example, including not
    only what is necessary for defraying the current expense of the
    year, but for paying the interest of the public debts, and for
    sinking a part of the capital of those debts, amounts to upwards
    of ten millions a-year. But the land tax, at four shillings
    in the pound, falls short of two millions a-year. This land
    tax, as it is called however, is supposed to be one-fifth, not
    only of the rent of all the land, but of that of all the houses,
    and of the interest of all the capital stock of Great Britain,
    that part of it only excepted which is either lent to the public,
    or employed as farming stock in the cultivation of land. A very
    considerable part of the produce of this tax arises from the rent
    of houses and the interest of capital stock. The land tax of the
    city of London, for example, at four shillings in the pound,
    amounts to £123,399: 6: 7; that of the city of Westminster to
    £63,092: 1: 5; that of the palaces of Whitehall and St. James's,
    to £30,754: 6: 3. A certain proportion of the land tax is, in
    the same manner, assessed upon all the other cities and towns
    corporate in the kingdom ; and arises almost altogether, either
    from the rent of houses, or from what is supposed to be the
    interest of trading and capital stock. According to the
    estimation, therefore, by which Great Britain is rated to the
    land tax, the whole mass of revenue arising from the rent of all
    the lands, from that of all the houses, and from the interest of
    all the capital stock, that part of it only excepted which is
    either lent to the public, or employed in the cultivation of
    land, does not exceed ten millions sterling a-year, the ordinary
    revenue which government levies upon the people, even in
    peaceable times. The estimation by which Great Britain is rated
    to the land tax is, no doubt, taking the whole kingdom at an
    average, very much below the real value ; though in several
    particular counties and districts it is said to be nearly equal
    to that value. The rent of the lands alone, exclusive of that of
    houses and of the interest of stock, has by many people been
    estimated at twenty millions; an estimation made in a great
    measure at random, and which, I apprehend, is as likely to be
    above as below the truth. But if the lands of Great Britain,
    in the present state of their cultivation, do not afford a rent
    of more than twenty millions a-year, they could not well afford
    the half, most probably not the fourth part of that rent, if they
    all belonged to a single proprietor, and were put under the
    negligent, expensive, and oppressive management of his factors
    and agents. The crown lands of Great Britain do not at present
    afford the fourth part of the rent which could probably be drawn
    from them if they were the property of private persons. If the
    crown lands were more extensive, it is probable, they would be
    still worse managed.

    The revenue which the great body of the people derives from land
    is, in proportion, not to the rent, but to the produce of the
    land. The whole annual produce of the land of every country,
    if we except what is reserved for seed, is either annually
    consumed by the great body of the people, or exchanged for
    something else that is consumed by them. Whatever keeps down the
    produce of the land below what it would otherwise rise to, keeps
    down the revenue of the great body of the people, still more than
    it does that of the proprietors of land. The rent of land, that
    portion of the produce which belongs to the proprietors, is
    scarce anywhere in Great Britain supposed to be more than a third
    part of the whole produce. If the land which, in one state of
    cultivation, affords a revenue of ten millions sterling a-year,
    would in another afford a rent of twenty millions ; the rent
    being, in both cases, supposed a third part of the produce, the
    revenue of the proprietors would be less than it otherwise might
    be, by ten millions a-year only; but the revenue of the great
    hotly of the people would be less than it otherwise might be, by
    thirty millions a-year, deducting only what would be necessary
    for seed. The population of the country would be less by the
    number of people which thirty millions a-year, deducting always
    the seed, could maintain, according to the particular mode of
    living, and expense which might take place in the different ranks
    of men, among whom the remainder was distributed.

    Though there is not at present in Europe, any civilized state of
    any kind which derives the greater part of its public revenue
    from the rent of lands which are the property of the state; yet,
    in all the great monarchies of Europe, there are still many large
    tracts of land which belong to the crown. They are generally
    forest, and sometimes forests where, after travelling several
    miles, you will scarce find a single tree; a mere waste and loss
    of country, in respect both of produce and population. In every
    great monarchy of Europe, the sale of the crown lands would
    produce a very large sum of money, which, if applied to the
    payment of the public debts, would deliver from mortgage a much
    greater revenue than any which those lands have even afforded to
    the crown. In countries where lands, improved and cultivated very
    highly, and yielding, at the time of sale, as great a rent as can
    easily be got from them, commonly sell at thirty years purchase;
    the unimproved, uncultivated, and low-rented crown lands, might
    well be expected to sell at forty, fifty, or sixty years
    purchase. The crown might immediately enjoy the revenue
    which this great price would redeem from mortgage. In the course
    of a few years, it would probably enjoy another revenue. When the
    crown lands had become private property, they would, in the
    course of a few years, become well improved and well cultivated.
    The increase of their produce would increase the population of
    the country, by augmenting the revenue and consumption of the
    people. But the revenue which the crown derives from the duties
    or custom and excise, would necessarily increase with the revenue
    and consumption of the people.

    The revenue which, in any civilized monarchy, the crown derives
    from tlhe crown lands, though it appears to cost nothing to
    individuals, in reality costs more to the society than perhaps
    any other equal revenue which the crown enjoys. It would, in
    all cases, be for the interest of the society, to replace this
    revenue to the crown by some other equal revenue, and to divide
    the lands among the people, which could not well be done better,
    perhaps, than by exposing them to public sale.

    Lands, for the purposes of pleasure and magnificence, parks,
    gardens, public walks, etc. possessions which are everywhere
    considered as causes of expense, not as sources of revenue, seem
    to be the only lands which, in a great and civilized monarchy,
    ought to belong to the crown.

    Public stock and public lands, therefore, the two sources of
    revenue which may peculiarly belong to the sovereign or
    commonwealth, being both improper and insufficient funds for
    defraying the necessary expense of any great and civilized state
    ; it remains that this expense must, the greater part of it, be
    defrayed by taxes of one kind or another; the people contributing
    a part of their own private revenue, in order to make up a public
    revenue to the sovereign or commonwealth.

    PART II.

    Of Taxes.

    The private revenue of individuals, it has been shown in the
    first book of this Inquiry, arises, ultimately from three
    different sources ; rent, profit, and wages. Every tax must
    finally be paid from some one or other of those three different
    sources of revenue, or from all of them indifferently. I shall
    endeavour to give the best account I can, first, of those taxes
    which, it is intended should fall upon rent; secondly, of those
    which, it is intended should fall upon profit ; thirdly, of those
    which, it is intended should fall upon wages ; and fourthly, of
    those which, it is intended should fall indifferently upon all
    those three different sources of private revenue. The particular
    consideration of each of these four different sorts of taxes will
    divide the second part of the present chapter into four articles,
    three of which will require several other subdivisions. Many of
    these taxes, it will appear from the following review, are not
    finally paid from the fund, or source of revenue, upon which it
    is intended they should fall.

    Before I enter upon the examination of particular taxes,it is
    necessary to premise the four following maximis with regard to
    taxes in general.

    1. The subjects of every state ought to contribute towards the
    support of the government, as nearly as possible, in proportion
    to their respective abilities; that is, in proportion to the
    revenue which they respectively enjoy under the protection of the
    state. The expense of government to the individuals of a great
    nation, is like the expense of management to the joint tenants of
    a great estate, who are all obliged to contribute in proportion
    to their respective interests in the estate. In the obsevation or
    neglect of this maxim, consists what is called the equality or
    inequality of taxation. Every tax, it must be observed once
    for all, which falls finally upon one only of the three sorts of
    revenue above mentioned, is necessarily unequal, in so far as it
    does not affect the other two. In the following examination of
    different taxes, I shall seldom take much farther notice of this
    sort of inequality; but shall, in most cases, confine my
    observations to that inequality which is occasioned by a
    particular tax falling unequally upon that particular sort of
    private revenue which is affected by it.

    2. The tax which each individual is bound to pay, ought to be
    certain and not arbitrary. The time of payment, the manner of
    payment, the quantity to be paid, ought all to be clear and plain
    to the contributor, and to every other person. Where it is
    otherwise, every person subject to the tax is put more or less in
    the power of the tax-gatherer, who can either aggravate the tax
    upon any obnoxious contributor, or extort, by the terror of such
    aggravation, some present or perquisite to himself. The
    uncertainty of taxation encourages the insolence, and favours the
    corruption, of an order of men who are naturally unpopular, even
    where they are neither insolent nor corrupt. The certainty of
    what each individual ought to pay is, in taxation, a matter of so
    great importance, that a very considerable degree of inequality,
    it appears, I believe, from the experience of all nations, is not
    near so great an evil as a very small degree of uncertainty.

    3. Every tax ought to be levied at the time, or in the manner, in
    which it is most likely to be convenient for the contributor to
    pay it. A tax upon the rent of land or of houses, payable at the
    same term at which such rents are usually paid, is levied at the
    time when it is most likely to be convenient for the contributor
    to pay ; or when he is most likely to have wherewithall to pay.
    Taxes upon such consumable goods as are articles of luxury, are
    all finally paid by the consumer, and generally in a manner that
    is very convenient for him. He pays them by little and little, as
    he has occasion to buy the goods. As he is at liberty too, either
    to buy or not to buy, as he pleases, it must be his own fault if
    he ever suffers any considerable inconveniecy from such taxes.

    4. Every tax ought to be so contrived, as both to take out and to
    keep out of the pockets of the people as little as possible, over
    and above what it brings into the public treasury of the state. A
    tax may either take out or keep out of the pockets of the people
    a great deal more than it brings into the public treasury, in the
    four following ways. First, the levying of it may require a great
    number of officers, whose salaries may eat up the greater part of
    the produce of the tax, and whose perquisites may impose another
    additional tax upon the people. Secondly, it may obstruct the
    industry of the people, and discourage them from applying to
    certain branches of business which might give maintenance and
    employment to great multitudes. While it obliges the people
    to pay, it may thus diminish, or perhaps destroy, some of the
    funds which might enable them more easily to do so. Thirdly, by
    the forfeitures and other penalties which those unfortunate
    individuals incur, who attempt unsuccessfully to evade the tax,
    it may frequently ruin them, and thereby put an end to the
    benefit which the community might have received from the
    employment of their capitals. An injudicious tax offers a great
    temptation to smuggling. But the penalties of smuggling must
    arise in proportion to the temptation. The law, contrary to all
    the ordinary principles of justice, first creates the temptation,
    and then punishes those who yield to it; and it commonly enhances
    the punishment, too, in proportion to the very circumstance which
    ought certainly to alleviate it, the temptation to commit the
    crime.{ See Sketches of the History of Man page 474, and Seq.}
    Fourthly, by subjecting the people to the frequent visits and the
    odious examination of the tax-gatherers, it may expose them to
    much unnecessary trouble, vexation, and oppression ; and though
    vexation is not, strictly speaking, expense, it is certainly
    equivalent to the expense at which every man would be willing to
    redeem himself from it. It is in some one or other of these four
    different ways, that taxes are frequently so much more burdensome
    to the people than they are beneficial to the sovereign.

    The evident justice and utility of the foregoing maxims have
    recommended them, more or less, to the attention of all nations.
    All nations have endeavoured, to the best of their judgment, to
    render their taxes as equal as they could contrive ; as certain,
    as convenient to the contributor, both the time and the mode of
    payment, and in proportion to the revenue which they brought to
    the prince, as little burdensome to the people. The following
    short review of some of the principal taxes which have taken
    place in different ages and countries, will show, that the
    endeavours of all nations have not in this respect been equally

    ARTICLE I. ˜ Taxes upon Rent ˜ Taxes upon the Rent of Land.

    A tax upon the rent of land may either be imposed according to a
    certain canon, every district being valued at a curtain rent,
    which valuation is not afterwards to be altered; or it may be
    imposed in such a manner, as to vary with every variation in the
    real rent of the land, and to rise or fall with the improvement
    or declension of its cultivation.

    A land tax which, like that of Great Britain, is assessed upon
    each district according to a certain invariable canon, though it
    should be equal at the time of its first establishment,
    necessarily becomes unequal in process of time, according to the
    unequal degrees of improvement or neglect in the cultivation of
    the different parts of the country. In England, the valuation,
    according to which the different counties and parishes were
    assessed to the land tax by the 4th of William and Mary, was very
    unequal even at its first establishment. This tax, therefore, so
    far offends against the first of the four maxims above mentioned.
    It is perfectly agreeable to the other three. It is perfectly
    certain. The time of payment for the tax, being the same as that
    for the rent, is as convenient as it can be to the contributor.
    Though the landlord is, in all cases, the real contributor, the
    tax is commonly advanced by the tenant, to whom the landlord is
    obliged to allow it in the payment of the rent. This tax is
    levied by a much smaller number of officers than any other which
    affords nearly the same revenue. As the tax upon each district
    does not rise with the rise of the rent, the sovereign does not
    share in the profits of the landlord's improvements. Those
    improvements sometimes contribute, indeed, to the discharge of
    the other landlords of the district. But the aggravation of the
    tax, which this may sometimes occasion upon a particular estate,
    is always so very small, that it never can discourage those
    improvements, nor keep down the produce of the land below what it
    would otherwise rise to. As it has no tendency to diminish the
    quantity, it can have none to raise the price of that produce.
    It does not obstruct the industry of the people; it subjects the
    landlord to no other inconveniency besides the unavoidable one of
    paying the tax.

    The advantage, however, which the land-lord has derived from the
    invariable constancy of the valuation. by which all the lands of
    Great Britain are rated to the land-tax, has been principally
    owing to some circumstances altogether extraneous to the nature
    of the tax

    It has been owing in part, to the great prosperity of almost
    every part of the country, the rents of almost all the estates of
    Great Britain having, since the time when this valuation was
    first established, been continually rising, and scarce any of
    them having fallen. The landlords, therefore, have almost all
    gained the difference between the tax which they would have paid,
    according to the present rent of their estates, and that which
    they actually pay according to the ancient valuation. Had the
    state of the country been different, had rents been gradually
    falling in consequence of the declension of cultivation, the
    landlords would almost all have lost this difference. In the
    state of things which has happened to take place since the
    revolution, the constancy of the valuation has been advantageous
    to the landlord and hurtful to the sovereign. In a different
    state of things it might have been advantageous to the sovereign
    and hurtful to the landlord.

    As the tax is made payable in money, so the valuation of the land
    is expressed in money. Since the establishment of this valuation,
    the value of silver has been pretty uniform, and there has been
    no alteration in the standard of the coin, either as to weight or
    fineness. Had silver risen considerably in its value, as it seems
    to have done in the course of the two centuries which preceded
    the discovery of the mines of America, the constancy of the
    valuation might have proved very oppressive to the landlord. Had
    silver fallen considerably in its value, as it certainly did for
    about a century at least after the discovery of those mines, the
    same constancy of valuation would have reduced very much this
    branch of the revenue of the sovereign. Had any considerable
    alteration been made in the standard of the money, either by
    sinking the same quantity of silver to a lower denomination, or
    by raising it to a higher ; had an ounce of silver, for example,
    instead of being coined into five shillings and two pence, been
    coined either into pieces which bore so low a denomination as two
    shillings and seven pence, or into pieces which bore so high a
    one as ten shillings and four pence, it would, in the one case,
    have hurt the revenue of the proprietor, in the other that of the

    In circumstances, therefore, somewhat different from those which
    have actually taken place, this constancy of valuation might have
    been a very great inconveniency, either to the contributors or to
    the commonwealth. In the course of ages, such circumstances,
    however, must at some time or other happen. But though empires,
    like all the other works of men, have all hitherto proved mortal,
    yet every empire aims at immortality. Every constitution,
    therefore, which it is meant should be as permanent as the empire
    itseif, ought to be convenient, not in certain circumstances
    only, but in all circumstances; or ought to be suited, not to
    those circumstances which are transitory, occasional, or
    accidental, but to those which are necessary, and therefore
    always the same.

    A tax upon the rent of land, which varies with every variation of
    the rent, or which rises and falls according to the improvement
    or neglect of cultivation, is recommended by that sect of men of
    letters in France, who call themselves the economists, as the
    most equitable of all taxes. All taxes, they pretend, fall
    ultimately upon the rent of land, and ought, therefore, to be
    imposed equally upon the fund which must finally pay them. That
    all taxes ought to fall as equally as possible upon the fund
    which must finally pay them, is certainly true. But without
    entering into the disagreeable discussion of the metaphysical
    arguments by which they support their very ingenious theory, it
    will sufficiently appear, from the following review, what are the
    taxes which fall finally upon the rent of the land, and what are
    those which fall finally upon some other fund.

    In the Venetian territory, all the arable lands which are given
    in lease to farmers are taxed at a tenth of the rent. { Memoires
    concernant les Droits, p. 240, 241.} The leases are recorded in a
    public register, which is kept by the officers of revenue in each
    province or district. When the proprietor cultivates his own
    lands, they are valued according to an equitable estimation, and
    he is allowed a deduction of one-fifth of the tax; so that for
    such land he pays only eight instead of ten per cent. of the
    supposed rent.

    A land-tax of this kind is certainly more equal than the land-tax
    of England. It might not, perhaps, be altogether so certain, and
    the assessment of the tax might freqnently occasion a good deal
    more trouble to the landlord. It might, too, be a good deal more
    expensive in the levying.

    Such a system of administration, however, might, perhaps, be
    contrived, as would in a great measure both prevent this
    uncertainty, and moderate this expense.

    The landlord and tenant, for example, might jointly be obliged to
    record their lease in a public register. Proper penalties might
    be enacted against concealing or misrepresenting any of the
    conditions; and if part of those penalties were to be paid to
    either of the two parties who informed against and convicted the
    other of such concealment or misrepresentation, it would
    effectually deter them from combining together in order to
    defraud the public revenue. All the conditions of the lease might
    be sufficiently known from such a record.

    Some landlords, instead of raising the rent, take a fine for the
    renewal of the lease. This practice is, in most cases, the
    expedient of a spendthrift, who, for a sum of ready money sells a
    future revenue of much greater value. It is, in most cases,
    therefore, hurtful to the landlord; it is frequently hurtful to
    the tenant ; and it is always hurtful to the community. It
    frequently takes from the tenant so great a part of his capital,
    and thereby diminishes so much his ability to cultivate the land,
    that he finds it more difficult to pay a small rent than it would
    otherwise have been to pay a great one. Whatever diminishes his
    ability to cultivate, necessarily keeps down, below what it would
    otherwise have been, the most important part of the revenue of
    the community. By rendering the tax upon such fines a good deal
    heavier than upon the ordinary rent, this hurtful practice might
    be discouraged, to the no small advantage of all the different
    parties concerned, of the landlord, of the tenant, of the
    sovereign, and of the whole community.

    Some leases prescribe to the tenant a certain mode of
    cultivation, and a certain succession of crops, during the whole
    continuance of the lease. This condition, which is generally the
    effect of the landlord's conceit of his own superior knowledge (a
    conceit in most cases very ill-founded), ought always to be
    considered as an additional rent, as a rent in service, instead
    of a rent in money. In order to discourage the practice, which is
    generally a foolish one, this species of rent might be valued
    rather high, and consequently taxed somewhat higher than common

    Some landlords, instead of a rent in money, require a rent in
    kind, in corn, cattle, poultry, wine, oil, etc. ; others, again,
    require a rent in service. Such rents are always more hurtful to
    the tenant than beneficial to the landlord. They either take
    more, or keep more out of the pocket of the former, than they put
    into that of the latter. In every country where they take
    place, the tenants are poor and beggarly, pretty much according
    to the degree in which they take place. By valuing, in the same
    manner, such rents rather high, and consequently taxing them
    somewhat higher than common money-rents, a practice which is
    hurtful to the whole community, might, perhaps, be sufficiently

    When the landlord chose to occupy himself a part of his own
    lands, the rent might be valued according to an equitable
    arbitration of the farmers and landlords in the neighbourhood,
    and a moderate abatement of the tax might be granted to him, in
    the same manner as in the Venetian territory, provided the rent
    of the lands which he occupied did not exceed a certain sum. It
    is of importance that the landlord should be encouraged to
    cultivate a part of his own land. His capital is generally
    greater than that of the tenant, and, with less skill, he can
    frequently raise a greater produce. The landlord can afford to
    try experiments, and is generally disposed to do so. His
    unsuccessful experiments occasion only a moderate loss to
    himself. His successful ones contribute to the improvement and
    better cultivation of the whole country. It might be of
    importance, however, that the abatement of the tax should
    encourage him to cultivate to a certain extent only. If the
    landlords should, the greater part of them, be tempted to farm
    the whole of their own lands, the country (instead of sober and
    industrious tenants, who are bound by their own interest to
    cultivate as well as their capital and skill will allow them)
    would be filled with idle and profligate bailiffs, whose abusive
    management would soon degrade the cultivation, and reduce the
    annual produce of the land, to the diminution, not only of the
    revenue of their masters, but of the most important part of that
    of the whole society.

    Such a system of administration might, perhaps, free a tax of
    this kind from any degree of uncertainty, which could occasion
    either oppression or inconveniency to the contributor ; and
    might, at the same time, serve to introduce into the common
    management of land such a plan of policy as might contribute a
    good deal to the general improvement and good cultivation of the

    The expense of levying a land-tax, which varied with every
    variation of the rent, would, no doubt, be somewhat greater than
    that of levying one which was always rated according to a fixed
    valuation. Some additional expense would necessarily be incurred,
    both by the different register-offices which it would be proper
    to establish in the different districts of the country, and by
    the different valuations which might occasionally be made of the
    lands which the proprietor chose to occupy himself. The expense
    of all this, however, might be very moderate, and much below what
    is incurred in the levying of many other taxes, which afford a
    very inconsiderable revenue in comparison of what might easily be
    drawn from a tax of this kind.

    The discouragement which a variable land-tax of this kind might
    give to the improvement of land, seems to be the most important
    objection which can be made to it. The landlord would certainly
    be less disposed to improve, when the sovereign, who contributed
    nothing to the expense, was to share in the profit of the
    improvement. Even this objection might, perhaps, be obviated, by
    allowing the landlord, before he began his improvement, to
    ascertain, in conjunction with the officers of revenue, the
    actual value of his lands, according to the equitable arbitration
    of a certain number of landlords and farmers in the
    neighbourhood, equally chosen by both parties: and by rating him,
    according to this valuation, for such a number of years as might
    be fully sufficient for his complete indemnification. To draw the
    attention of the sovereign towards the improvement of the land,
    from a regard to the increase of his own revenue, is one or the
    principal advantages proposed by this species of land-tax. The
    term, therefore, allowed, for the indemnification of the
    landlord, ought not to he a great deal longer than what was
    necessary for that purpose, lest the remoteness of the interest
    should discourage too much this attention. It had better,
    however, be somewhat too long, than in any respect too short. No
    incitement to the attention of the sovereign can ever
    counterbalance the smallest discouragement to that of the
    landlord. The attention of the sovereign can be, at best, but a
    very general and vague consideration of what is likely to
    contribute to the better cultivation of the greater part of his
    dominions. The attention of the landlord is a particular and
    minute consideration of what is likely to be the most
    advantageous application of every inch of ground upon his estate.
    The principal attention of the sovereign ought to be, to
    encourage, by every means in his power, the attention both of the
    landlord and of the farmer, by allowing both to pursue their own
    interest in their own way, and according to their own judgment ;
    by giving to both the most perfect security that they shall enjoy
    the full recompence of their own industry ; and by procuring to
    both the most extensive market for every part of their produce,
    in consequence of establishing the easiest and safest
    communications, both by land and by water, through every part of
    his own dominions, as well as the most unbounded freedom of
    exportation to the dominions of all other princes.

    If, by such a system of administration, a tax of this kind could
    be so managed as to give, not only no discouragement, but, on the
    contrary, some encouragement to the improvement or land, it does
    not appear likely to occasion any other inconveniency to the
    landlord, except always the unavoidable one of being obliged to
    pay the tax.

    In all the variations of the state of the society, in the
    improvement and in the declension of agriculture ; in all the
    variations in the value of silver, and in all those in the
    standard of the coin, a tax of this kind would, of its own
    accord, and without any attention of government, readily suit
    itself to the actual situation of things, and would be equally
    just and equitable in all those different changes. It would,
    therefore, be much more proper to be established as a perpetual
    and unalterable regulation, or as what is called a fudamental law
    of the commonwealth, than any tax which was always to be levied
    according to a certain valuation.

    Some states, instead of the simple and obvious expedient of a
    register of leases, have had recourse to the laborious and
    expensive one of an actual survey and valuation of all the lands
    in the country. They have suspected, probably, that the lessor
    and lessee, in order to defraud the public revenue, might combine
    to conceal the real terms of the lease. Doomsday-book seems to
    have been the result of a very accurate survey of this kind.

    In the ancient dominions of the king of Prussia, the land-tax is
    assessed according to an actual survey and valuation, which is
    reviewed and altered from time to time.{ Memoires concurent les
    Droits, etc. tom, i. p. 114, 115, 116, etc.} According to that
    valuation, the lay proprietors pay from twenty to twenty-five per
    cent. of their revenue; ecclesiastics from forty to forty-five
    per cent. The survey and valuation of Silesia was made by order
    of the present king, it is said, with great accuracy. According
    to that valuation, the lands belonging to the bishop of Breslaw
    are taxed at twenty-five per cent. of their rent. The other
    revenues of the ecclesiastics of both religions at fifty per
    cent. The commanderies of the Teutonic order, and of that of
    Malta, at forty per cent. Lands held by a noble tenure, at
    thirty-eight and one-third per cent. Lands held by a base
    tenure, at thirty-five and one-third per cent.

    The survey and valuation of Bohemia is said to have been the work
    of more than a hundred years. It was not perfected till after the
    peace of 1748, by the orders of the present empress queen. {
    Id.tom i p.85,84.} The survey of the duchy of Milan, which was
    begun in the time of Charles VI., was not perfected till after
    1760 It is esteemed one of the most accurate that has ever been
    made. The survey of Savoy and Piedmont was executed under the
    orders of the late king of Sardinia. {Id. p. 280, etc. ; also p,
    287. etc. to 316.}

    In the dominions of the king of Prussia, the revenue of the
    church is taxed much higher than that of lay proprietors. The
    revenue of the church is, the greater part of it, a burden upon
    the rent of land. It seldom happens that any part of it is
    applied towards the improvement of land; or is so employed as to
    contribute, in any respect, towards increasing the revenue of the
    great body of the people. His Prussian majesty had probably, upon
    that account, thought it reasonable that it should contribute a
    good deal more towards relieving the exigencies of the state. In
    some countries, the lands of the church are exempted from all
    taxes. In others, they are taxed more lightly than other lands.
    In the duchy of Milan, the lands which the church possessed
    before 1575, are rated to the tax at a third only or their value.

    In Silesia, lands held by a noble tenure are taxed three per
    cent. higher than those held by a base tenure. The honours and
    privileges of different kinds annexed to the former, his Prussian
    majesty had probably imagined, would sufficiently compensate to
    the proprietor a small aggravation of the tax; while, at the same
    time, the humiliating inferiority of the latter would be in some
    measure alleviated, by being taxed somewhat more lightly. In
    other countries, the system of taxation, instead of alleviating,
    aggravates this inequality. In the dominions of the king of
    Sardinia, and in those provinces of France which are subject to
    what is called the real or predial taille, the tax falls
    altogether upon the lands held by a base tenure. Those held by a
    noble one are exempted.

    A land tax assessed according to a general survey and valuation,
    how equal soever it may be at first, must, in the course of a
    very moderate period of time, become unequal. To prevent its
    becoming so would require the continual and painful attention of
    government to all the variations in the state and produce of
    every different farm in the country. The governments of Prussia,
    of Bohemia, of Sardinia, and of the duchy of Milan, actually
    exert an attention of this kind ; an attention so unsuitable to
    the nature of government, that it is not likely to be of long
    continuance, and which, if it is continued, will probably, in the
    long-run, occasion much more trouble and vexation than it can
    possibly bring relief to the contributors.

    In 1666, the generality of Montauban was assessed to the real or
    predial taille, according, it is said, to a very exact survey and
    valuation. { Memoires concernant les Droits, etc. tom. ii p. 139,
    etc.} By 1727, this assessment had become altogether unequal. In
    order to remedy this inconveniency, government has found no
    better expedient, than to impose upon the whole generality an
    additional tax of a hundred and twenty thousand livres. This
    additional tax is rated upon all the different districts subject
    to the taille according to the old assessment. But it is levied
    only upon those which, in the actual state of things, are by that
    assessment under-taxed ; and it is applied to the relief of those
    which, by the same assessment, are over-taxed. Two districts, for
    example, one of which ought, in the actual state of things, to be
    taxed at nine hundred, the other at eleven hundred livres, are,
    by the old assessment, both taxed at a thousand livres. Both
    these districts are, by the additional tax, rated at eleven
    hundred livres each. But this additional tax is levied only upon
    the district under-charged, and it is applied altogether to the
    relief of that overcharged, which consequently pays only nine
    hundred livres. The government neither gains nor loses by the
    additional tax, which is applied altogether to remedy the
    inequalities arising from the old assessment. The application
    is pretty much regulated according to the discretion of the
    intendant of the generality, and must, therefore, be in a great
    measure arbitrary.

    Taxes which are proportioned, not in the Rent, but to the
    Produce of Land.

    Taxes upon the produce of land are, In reality, taxes upon
    the rent ; and though they may be originally advanced by the
    farmer, are finally paid by the landlord. When a certain portion
    of the produce is to be paid away for a tax, the farmer computes
    as well as he can, what the value of this portion is, one year
    with another, likely to amount to, and he makes a proportionable
    abatement in the rent which he agrees to pay to the landlord.
    There is no farmer who does not compute beforehand what the
    church tythe, which is a land tax of this kind, is, one year with
    another, likely to amount to.

    The tythe, and every other land tax of this kind, under the
    appearance of perfect equality, are very unequal taxes; a certain
    portion of the produce being in differrent situations, equivalent
    to a very different portion of the rent. In some very rich
    lands, the produce is so great, that the one half of it is fully
    sufficient to replace to the farmer his capital employed in
    cultivation, together with the ordinary profits of farming stock
    in the neighbourhood. The other half, or, what comes to the
    same thing, the value of the other half, he could afford to pay
    as rent to the landlord, if there was no tythe. But if a tenth of
    the produce is taken from him in the way of tythe, he must
    require an abatement of the fifth part of his rent, otherwise he
    cannot get back his capital with the ordinary profit. In
    this case, the rent of the landlord, instead of amounting to a
    half, or five-tenths of the whole produce, will amount only to
    four-tenths of it. In poorer lands, on the contrary, the produce
    is sometimes so small, and the expense of cultivation so great,
    that it requires four-fifths of the whole produce, to replace to
    the farmer his capital with the ordinary profit. In this
    case, though there was no tythe, the rent of the landlord could
    amount to no more than one-fifth or two-tenths of the whole
    produce. But if the farmer pays one-tenth of the produce in
    the way of tythe, he must require an equal abatement of the rent
    of the landlord, which will thus be reduced to one-tenth only of
    the whole produce. Upon the rent of rich lands the tythe may
    sometimes be a tax of no more than one-fifth part, or four
    shillings in the pound ; whereas upon that of poorer lands, it
    may sometimes be a tax of one half, or of ten shillings in the

    The tythe, as it is frequently a very unequal tax upon the rent,
    so it is always a great discouragement, both to the improvements
    of the landlord, and to the cultivation of the farmer. The one
    cannot venture to make the most important, which are generally
    the most expensive improvements; nor the other to raise the most
    valuable, which are generally, too, the most expensive crops;
    when the church, which lays out no part of the expense, is to
    share so very largely in the profit. The cultivation of madder
    was, for a long time, confined by the tythe to the United
    Provinces, which, being presbyterian countries, and upon that
    account exempted from this destructive tax, enjoyed a sort of
    monopoly of that useful dyeing drug against the rest of Europe.
    The late attempts to introduce the culture of this plant into
    England, have been made only in consequence of the statute, which
    enacted that five shillings an acre should be received in lieu of
    all manner of tythe upon madder.

    As through the greater part of Europe, the church, so in many
    different countries of Asia, the state, is principally supported
    by a land tax, proportioned not to the rent, but to the produce
    of the land. In China, the principal revenue of the sovereign
    consists in a tenth part of the produce of all the lands of the
    empire. This tenth part, however, is estimated so very
    moderately, that, in many provinces, it is said not to exceed a
    thirtieth part of the ordinary produce. The land tax or land rent
    which used to be paid to the Mahometan government of Bengal,
    before that country fell into the hands of the English East India
    company, is said to have amounted to about a fifth part of the
    produce. The land tax of ancient Egypt is said likewise to have
    amounted to a fifth part.

    In Asia, this sort of land tax is said to interest the sovereign
    in the improvement and cultivation of land. The sovereigns
    of China, those of Bengal while under the Mahometan govermnent,
    and those of ancient Egypt, are said, accordingly, to have been
    extremely attentive to the making and maintaining of good roads
    and navigable canals, in order to increase, as much as possible,
    both the quantity and value of every part of the produce of the
    land, by procuring to every part of it the most extensive market
    which their own dominions could afford. The tythe of the church
    is divided into such small portions that no one of its
    proprietors can have any interest of this kind. The parson of a
    parish could never find his account. in making a road or canal to
    a distant part of the country, in order to extend the market for
    the produce of his own particular parish. Such taxes, when
    destined for the maintenance of the state, have some advantages,
    which may serve in some measure to balance their inconveniency.
    When destined for the maintenance of the church, they are
    attended with nothing but inconveniency.

    Taxes upon the produce of land may be levied, either in kind, or,
    according to a certain valuation in money.

    The parson of a parish, or a gentleman of small fortune who lives
    upon his estate, may sometimes, perhaps find some advantage in
    receiving, the one his tythe, and the other his rent, in kind.
    The quantity to be collected, and the district within which it is
    to be collected, are so small, that they both can oversee, with
    their own eyes, the collection and disposal of every part of what
    is due to them. A gentleman of great fortune, who lived in the
    capital, would be in danger of suffering much by the neglect, and
    more by the fraud, of his factors and agents, if the rents of an
    estate in a distant province were to be paid to him in this
    manner. The loss of the sovereign, from the abuse and depredation
    of his tax-gatherers, would necessarily be much greater. The
    servants of the most careless private person are, perhaps, more
    under the eye of their master than those of the most careful
    prince; and a public revenue, which was paid in kind, would
    suffer so much from the mismanagement of the collectors, that a
    very small part of what was levied upon the people would ever
    arrive at the treasury of the prince. Some part of the public
    revenue of China, however, is said to be paid in this manner. The
    mandarins and other tax-gatherers will, no doubt, find their
    advantage in continuing the practice of a payment, which is so
    much more liable to abuse than any payment in money.

    A tax upon the produce of land, which is levied in money, may be
    levied, either according to a valuation, which varies with all
    the variations of the market price ; or according to a fixed
    valuation, a bushel of wheat, for example, being always valued at
    one and the same money price, whatever may be the state of the
    market. The produce of a tax levied in the former way will vary
    only according to the variations in the real produce of the land,
    according to the improvement or neglect of cultivation. The
    produce of a tax levied in the latter way will vary, not only
    according to the variations in the produce of the land, but
    according both to those in the value of the precious metals, and
    those in the quantity of those metals which is at different times
    contained in coin of the same denomination. The produce of the
    former will always bear the same proportion to the value of the
    real produce of the land. The produce of the latter may, at
    different times, bear very different proportions to that value.

    When, instead either of a certain portion of the produce of land,
    or of the price of a certain portion, a certain sum of money is
    to be paid in full compensation for all tax or tythe; the tax
    becomes, in this case, exactly of the same nature with the land
    tax of England. It neither rises nor falls with the rent of the
    land. It neither encourages nor discourages improvement. The
    tythe in the greater part of those parishes which pay what is
    called a modus, in lieu of all other tythe is a tax of this kind.
    During the Mahometan government of Bengal, instead of the payment
    in kind of the fifth part of the produce, a modus, and, it is
    said, a very moderate one, was established in the greater part of
    the districts or zemindaries of the country. Some of the servants
    of the East India company, under pretence of restoring the public
    revenue to its proper value, have, in some provinces, exchanged
    this modus for a payment in kind. Under their management,
    this change is likely both to discourage cultivation, and to give
    new opportunities for abuse in the collection of the public
    revenue, which has fallen very much below what it was said to
    have been when it first fell under the management of the company.
    The servants of the company may, perhaps, have profited by the
    change, but at the expense, it is probable, both of their masters
    and of the country.

    Taxes upon the Rent of Houses.

    The rent of a house may be distinguished into two parts, of which
    the one may very properly be called the building-rent; the other
    is commonly called the ground-rent.

    The building-rent is the interest or profit of the capital
    expended in building the house. In order to put the trade of a
    builder upon a level with other trades, it is necessary that this
    rent should be sufficient, first, to pay him the same interest
    which he would have got for his capital, if he had lent it upon
    good security ; and, secondly, to keep the house in constant
    repair, or, what comes to the same thing, to replace, within a
    certain term of years, the capital which had been employed in
    building it. The building-rent, or the ordinary profit of
    building, is, therefore, everywhere regulated by the ordinary
    interest of money. Where the market rate of interest is four per
    cent. the rent of a house, which, over and above paying the
    ground-rent, affords six or six and a-half per cent. upon the
    whole expense of building, may, perhaps, afford a sufficient
    profit to the builder. Where the market rate of interest is five
    per cent. it may perhaps require seven or seven and a half per
    cent. If, in proportion to the interest of money, the trade of
    the builders affords at any time much greater profit than this,
    it will soon draw so much capital from other trades as will
    reduce the profit to its proper level. If it affords at any time
    much less than this, other trades will soon draw so much capital
    from it as will again raise that profit.

    Whatever part of the whole rent of a house is over and above what
    is sufficient for affording this reasonable profit, naturally
    goes to the ground-rent; and, where the owner of the ground and
    the owner of the building are two different persons, is, in most
    cases, completely paid to the former. This surplus rent is the
    price which the inhabitant of the house pays for some real or
    supposed advantage of the situation. In country houses, at a
    distance from any great town, where there is plenty of ground to
    chuse upon, the ground-rent is scarce anything, or no more than
    what the ground which the house stands upon would pay, if
    employed in agriculture. In country villas, in the neighbourhood
    of some great town, it is sometimes a good deal higher; and the
    peculiar conveniency or beauty of situation is there frequently
    very well paid for. Ground-rents are generally highest in the
    capital, and in those particular parts of it where there happens
    to be the greatest demand for houses, whatever be the reason of
    that demand, whether for trade and business, for pleasure and
    society, or for mere vanity and fashion.

    A tax upon house-rent, payable by the tenant, and proportioned to
    the whole rent of each house, could not, for any considerable
    time at least, affect the building-rent. If the builder did not
    get his reasonable profit, he would be obliged to quit the trade;
    which, by raising the demand for building, would, in a short
    time, bring back his profit to its proper level with that of
    other trades. Neither would such a tax fall altogether upon the
    ground-rent; but it would divide itself in such a manner, as to
    fall partly upon the inhabitant of the house. and partly upon the
    owner of the ground.

    Let us suppose, for example, that a particular person judges that
    he can afford for house-rent all expense of sixty pounds a-year;
    and let us suppose, too, that a tax of four shillings in the
    pound, or of one-fifth, payable by the inhabitant, is laid upon
    house-rent. A house of sixty pounds rent will, in that case, cost
    him seventy-two pounds a-year, which is twelve pounds more than
    he thinks he can afford. He will, therefore, content himself with
    a worse house, or a house of fifty pounds rent, which, with the
    additional ten pounds that he must pay for the tax, will make up
    the sum of sixty pounds a-year, the expense which he judges he
    can afford, and, in order to pay the tax, he will give up a part
    of the additional conveniency which he might have had from a
    house of ten pounds a-year more rent. He will give up, I say, a
    part of this additional conveniency; for he will seldom be
    obliged to give up the whole, but will, in consequence of the
    tax, get a better house for fifty pounds a-year, than he could
    have got if there had been no tax for as a tax of this kind, by
    taking away this particular competitor, must diminish the
    competition for houses of sixty pounds rent, so it must likewise
    diminish it for those of fifty pounds rent, and in the same
    manner for those of all other rents, except the lowest rent, for
    which it would for some time increase the competition. But
    the rents of every class of houses for which the competition was
    diminished, would necessarily be more or less reduced. As no part
    of this reduction, however, could for any considerable time at
    least, affect the building-rent, the whole of it must, in the
    long-run, necessarily fall upon the ground-rent. The final
    payment of this tax, therefore, would fall partly upon the
    inhabitant of the house, who, in order to pay his share, would be
    obliged to give up a part of his conveniency ; and partly upon
    the owner of the ground, who, in order to pay his share, would be
    obliged to give up a part of his revenue. In what proportion this
    final payment would be divided between them, it is not, perhaps,
    very easy to ascertain. The division would probably be very
    different in different circumstances, and a tax of this kind
    might, according to those different circumstances, affect very
    unequally, both the inhabitant of the house and the owner of the

    The inequality with which a tax of this kind might fall upon the
    owners of different ground-rents, would arise altogether from the
    accidental inequality of this division. But the inequality
    with which it might fall upon the inhabitants of different
    houses, would arise, not only from this, but from another cause.
    The proportion of the expense of house-rent to the whole expense
    of living, is different in the different degrees of fortune. It
    is, perhaps, highest in the highest degree, and it diminishes
    gradually through the inferior degrees, so as in general to be
    lowest in the lowest degree. The necessaries of life occasion the
    great expense of the poor. They find it difficult to get food,
    and the greater part of their little revenue is spent in getting
    it. The luxuries and vanities of life occasion the principal
    expense of the rich ; and a magnificent house embellishes and
    sets off to the best advantage all the other luxuries and
    vanities which they possess. A tax upon house-rents, therefore,
    would in general fall heaviest upon the rich ; and in this sort
    of inequality there would not, perhaps, be any thing very
    unreasonable It is not very unreasonable that the rich should
    contribute to the public expense, not only in proportion to their
    revenue, but something more than in that proportion.

    The rent of houses, though it in some respects resembles the rent
    of land, is in one respect essentially different from it. The
    rent of land is paid for the use of a productive subject. The
    land which pays it produces it. The rent of houses is paid for
    the use of an unproductive subject. Neither the house, nor the
    ground which it stands upon, produce anything. The person who
    pays the rent, therefore, must draw it from some other source of
    revenue, distinct from and independent of this subject. A tax
    upon the rent of houses, so far as it falls upon the inhabitants,
    must be drawn from the same source as the rent itself, and must
    be paid from their revenue, whether derived from the wages of
    labour, the profits of stock, or the rent of land. So far as it
    falls upon the inhabitants, it is one of those taxes which fall,
    not upon one only, but indifferently upon all the three different
    sources of revenue ; and is, in every respect, of the same nature
    as a tax upon any other sort of consumable commodities. In
    general, there is not perhaps, any one article of expense or
    consumption by which the liberality or narrowness of a man's
    whole expense can be better judged of than by his house-rent. A
    proportional tax upon this particular article of expense might,
    perhaps, produce a more considerable revenue than any which has
    hitherto been drawn from it in any part of Europe. If the tax,
    indeed, was very high, the greater part of people would endeavour
    to evade it as much as they could, by contenting themselves with
    smaller houses, and by turning the greater part of their expense
    into some other channel.

    The rent of houses might easily be ascertained with sufficient
    accuracy, by a policy of the same kind with that which would be
    necesary for ascertaining the ordinary rent of land. Houses not
    inhabited ought to pay no tax. A tax upon them would fall
    altogether upon the proprietor, who would thus be taxed for a
    subject which afforded him neither conveniency nor revenue.
    Houses inhabited by the proprietor ought to be rated, not
    according to the expense which they might have cost in building,
    but according to the rent which an equitable arbitration might
    judge them likely to bring if leased to a tenant. If rated
    according to the expense which they might have cost in building,
    a tax of three or four shillings in the pound, joined with other
    taxes, would ruin almost all the rich and great families of this,
    and, I believe, of every other civilized country. Whoever will
    examine with attention the different town and country houses of
    some of the richest and greatest families in this country, will
    find that, at the rate of only six and a-half, or seven per cent.
    upon the original expense of building, their house-rent is nearly
    equal to the whole neat rent of their estates. It is the
    accumulated expense of several successive generations, laid out
    upon objects of great beauty and magnificence, indeed, but, in
    proportion to what they cost, of very small exchangeable value.{
    Since the first publication of this book, a tax nearly upon the
    above-mentioned principles thas been imposed.}

    Ground-rents are a still more proper subject of taxation than the
    rent of houses. A tax upon ground-rents would not raise the rent
    of houses; it would fall altogether upon the owner of the
    ground-rent, who acts always as a monopolist, and exacts the
    greatest rent which can be got for the use of his ground. More or
    less can be got for it, according as the competitors happen to be
    richer or poorer, or can afford to gratify their fancy for a
    particular spot of ground at a greater or smaller expense.
    In every country, the greatest number of rich competitors is in
    the capital, and it is there accordingly that the highest
    ground-rents are always to be found. As the wealth of those
    competitors would in no respect be increased by a tax upon
    ground-rents, they would not probably be disposed to pay more for
    the use of the ground. Whether the tax was to be advanced by the
    inhabitant or by the owner of the ground, would be of little
    importance. The more the inhabitant was obliged to pay for the
    tax, the less he would incline to pay for the ground ; so that
    the final payment of the tax would fall altogether upon the owner
    of the ground-rent. The ground-rents of uninhabited houses ought
    to pay no tax.

    Both ground-rents, and the ordinary rent of land, are a species
    of revenue which the owner, in many cases, enjoys without any
    care or attention of his own. Though a part of this revenue
    should be taken from him in order to defray the expenses of the
    state, no discouragement will thereby be given to any sort of
    iudustry. The annual produce of the land and labour of the
    society, the real wealth and revenue of the great body of the
    people, might be the same after such a tax as before.
    Ground-rents, and the ordinary rent of land, are therefore,
    perhaps, the species of revenue which can best bear to have a
    peculiar tax imposed upon them.

    Ground-rents seem, in this respect, a more proper subject of
    peculiar taxation, than even the ordinary rent of land. The
    ordinary rent of land is, in many cases, owing partly, at least,
    to the attention and good management of the landlord. A very
    heavy tax might discourage, too much, this attention and good
    management. Ground-rents, so far as they exceed the ordinary rent
    of land, are altogether owing to the good government of the
    sovereign, which, by protecting the industry either of the whole
    people or of the inhabitants of some particular place, enables
    them to pay so much more than its real value for the ground which
    they build their houses upon; or to make to its owner so much
    more than compensation for the loss which he might sustain by
    this use of it. Nothing can be more reasonable, than that a fund,
    which owes its existence to the good government of the state,
    should be taxed peculiarly, or should contribute something more
    than the greater part of other funds, towards the support of that

    Though, in many different countries of Europe, taxes have been
    imposed upon the rent of houses, I do not know of any in which
    ground-rents have been considered as a separate subject of
    taxation. The contrivers of taxes have, probably, found some
    difficulty in ascertaining what part of the rent ought to be
    considered as ground-rent, and what part ought to be considered
    as building-rent. It should not, however, seem very difficult to
    distinguish those two parts of the rent from one another.

    In Great Britain the rent of houses is supposed to be taxed in
    the same proportion as the rent of land, by what is called the
    annual land tax. The valuation, according to which each different
    parish and district is assessed to this tax, is always the same.
    It was originally extremely unequal, and it still continues to be
    so. Through the greater part of the kingdom this tax falls still
    more lightly upon the rent of houses than upon that of land.
    In some few districts only, which were originally rated high, and
    in which the rents of houses have fallen considerably, the land
    tax of three or four shillings in the pound is said to amount to
    an equal proportion of the real rent of houses. Untenanted
    houses, though by law subject to the tax, are, in most districts,
    exempted from it by the favour of the assessors; and this
    exemption sometimes occasions some little variation in the rate
    of particular houses, though that of the district is always the
    same. Improvements of rent, by new buildings, repairs, etc. go to
    the discharge of the district, which occasions still further
    variations in the rate of particular houses.

    In the province of Holland,{ Memoires concernant les Droits, etc.
    p. 223.} every house is taxed at two and a-half per cent. of its
    value, without any regard, either to the rent which it actually
    pays, or to the circumstance of its being tenanted or untenanted.
    There seems to be a hardship in obliging the proprietor to pay a
    tax for an untenanted house, from which he can derive no revenue,
    especially so very heavy a tax. In Holland, where the market rate
    of interest does not exceed three per cent., two and a-half per
    cent. upon the whole value of the house must, in most cases,
    amount to more than a third of the building-rent, perhaps of the
    whole rent. The valuation, indeed, according to which the houses
    are rated, though very unequal, is said to be always below the
    real value. When a house is rebuilt, improved, or enlarged, there
    is a new valuation, and the tax is rated accordingly.

    The contrivers of the several taxes which in England have, at
    different times, been imposed upon houses, seem to have imagined
    that there was some great difficulty in ascertaining, with
    tolerable exactness, what was the real rent of every house. They
    have regulated their taxes, therefore, according to some more
    obvious circumstance, such as they had probably imagined would,
    in most cases, bear some proportion to the rent.

    The first tax of this kind was hearth-money; or a tax of two
    shillings upon every hearth. In order to ascertain how many
    hearths were in the house, it was necessary that the tax-gatherer
    should enter every room in it. This odious visit rendered the tax
    odious. Soon after the Revolution, therefore, it was abolished as
    a badge of slavery.

    The next tax of this kind was a tax of two shillings upon every
    dwelling-house inhabited. A house with ten windows to pay four
    shillings more. A house with twenty windows and upwards to pay
    eight shillings. This tax was afterwards so far altered, that
    houses with twenty windows, and with less than thirty, were
    ordered to pay ten shillings, and those with thirty windows and
    upwards to pay twenty shillings. The number of windows can, in
    most cases, be counted from the outside, and, in all cases,
    without entering every room in the house. The visit of the
    tax-gatherer, therefore, was less offensive in this tax than in
    the hearth-money.

    This tax was afterwards repealed, and in the room of it was
    established the window-tax, which has undergone two several
    alterations and augmentations. The window tax, as it stands at
    present (January 1775), over and above the duty of three
    shillings upon every house in England, and of one shilling upon
    every house in Scotland, lays a duty upon every window, which in
    England augments gradually from twopence, the lowest rate upon
    houses with not more than seven windows, to two shillings, the
    highest rate upon houses with twenty-five windows and upwards.

    The principal objection to all such taxes is their inequality; an
    inequality of the worst kind, as they must frequently fall much
    heavier upon the poor than upon the rich. A house of ten pounds
    rent in a country town, may sometimes have more windows than a
    house of five hundred pounds rent in London ; and though the
    inhabitant of the former is likely to be a much poorer man than
    that of the latter, yet, so far as his contribution is regulated
    by the window tax, he must contribute more to the support of the
    state. Such taxes are, therefore, directly contrary to the first
    of the four maxims above mentioned. They do not seem to offend
    much against any of the other three.

    The natural tendency of the window tax, and of all other taxes
    upon houses, is to lower rents. The more a man pays for the tax,
    the less, it is evident, he can afford to pay for the rent. Since
    the imposition of the window tax, however, the rents of houses
    have, upon the whole, risen more or less, in almost every town
    and village of Great Britain, with which I am acquainted.
    Such has been, almost everywhere, the increase of the demand for
    houses, that it has raised the rents more than the window tax
    could sink them ; one of the many proofs of the great prosperity
    of the country, and of the increasing revenue of its inhabitants.
    Had it not been for the tax, rents would probably have risen
    still higher.

    ARTICLE II. ˜ Taxes upon Profit, or upon the Revenue arising
    from Stock.

    The revenue or profit arising from stock naturally divides itself
    into two parts; that which pays the interest, and which belongs
    to the owner of the stock ; and that surplus part which is over
    and above what is necessary for paying the interest.

    This latter part of profit is evidently a subject not taxable
    directly. It is the compensation, and, in most cases, it is no
    more than a very moderate compensation for the risk and trouble
    of employing the stock. The employer must have this compensation,
    otherwise he cannot, consistently with his own interest, continue
    the employment. If he was taxed directly, therefore, in
    proportion to the whole profit, he would be obliged either to
    raise the rate of his profit, or to charge the tax upon the
    interest of money ; that is, to pay less interest. If he raised
    the rate of his profit in proportion to the tax, the whole tax,
    though it might be advanced by him, would be finally paid by one
    or other of two different sets of people, according to the
    different ways in which he might employ the stock of which he had
    the management. If he employed it as a farming stock, in the
    cultivation of land, he could raise the rate of his profit only
    by retaining a greater portion, or, what comes to the same thing,
    the price of a greater portion, of the produce of the land; and
    as this could be done only by a reduction of rent, the final
    payment of the tax would fall upon the landlord. If he employed
    it as a mercantile or manufacturing stock, he could raise the
    rate of his profit only by raising the price of his goods; in
    which case, the final payment of the tax would fall altogether
    upon the consumers of those goods. If he did not raise the rate
    of his profit, he would be obliged to charge the whole tax upon
    that part of it which was allotted for the interest of money. He
    could afford less interest for whatever stock he borrowed, and
    the whole weight of the tax would, in this case, fall ultimately
    upon the interest of money. So far as he could not relieve
    himself from the tax in the one way, he would be obliged to
    relieve himself in the other.

    The interest of money seems, at first sight, a subject equally
    capable of being taxed directly as the rent of land. Like the
    rent of land, it is a neat produce, which remains, after
    completely compensating the whole risk and trouble of employing
    the stock. As a tax upon the rent of land cannot raise rents,
    because the neat produce which remains, after replacing the stock
    of the farmer, together with his reasonable profit, cannot be
    greater after the tax than before it, so, for the same reason, a
    tax upon the interest of money could not raise the rate of
    interest; the quantity of stock or money in the country, like the
    quantity of land, being supposed to remain the same after the tax
    as before it. The ordinary rate of profit, it has been shewn, in
    the first book, is everywhere regulated by the quantity of stock
    to be employed, in proportion to the quantity of the employment,
    or of the business which must be done by it. But the quantity
    of the employment, or of the business to be done by stock, could
    neither be increased nor diminished by any tax upon the interest
    of money. If the quantity of the stock to be employed, therefore,
    was neither increased nor diminished by it, the ordinary rate of
    profit would necessarily remain the same. But the portion of this
    profit, necessary for compensating the risk and trouble of the
    employer, would likewise remain the same ; that risk and trouble
    being in no respect altered. The residue, therefore, that portion
    which belongs to the owner of the stock, and which pays the
    interest of money, would necessarily remain the same too. At
    first sight, therefore, the interest of money seems to be a
    subject as fit to be taxed directly as the rent of land.

    There are, however, two different circumstances, which render the
    interest of money a much less proper subject of direct taxation
    than the rent of land.

    First, the quantity and value of the land which any man
    possesses, can never be a secret, and can always be ascertained
    with great exactness. But the whole amount of the capital stock
    which he possesses is almost always a secret, and can scarce ever
    be ascertained with tolerable exactness. It is liable, besides,
    to almost continual variations. A year seldom passes away,
    frequently not a month, sometimes scarce a single day, in which
    it does not rise or fall more or less. An inquisition into every
    man's private circumstances, and an inquisition which, in order
    to accommodate the tax to them, watched over all the fluctuations
    of his fortune, would be a source of such continual and endless
    vexation as no person could support.

    Secondly, land is a subject which cannot be removed; whereas
    stock easily may. The proprietor of land is necessarily a citizen
    of the particular country in which his estate lies. The
    proprietor of stock is properly a citizen of the world, and is
    not necessarily attached to any particular country. He would be
    apt to abandon the country in which he was exposed to a vexatious
    inquisition, in order to be assessed to a burdensome tax ; and
    would remove his stock to some other country, where he could
    either carry on his business, or enjoy his fortune more at his
    ease. By removing his stock, he would put an end to all the
    industry which it had maintained in the country which he left.
    Stock cultivates land ; stock employs labour. A tax which tended
    to drive away stock from any particular country, would so far
    tend to dry up every source of revenue, both to the sovereign and
    to the society. Not only the profits of stock, but the rent of
    land, and the wages of labour, would necessarily be more or less
    diminished by its removal.

    The nations, accordingly, who have attempted to tax the revenue
    arising from stock, instead of any severe inquisition of this
    kind, have been obliged to content themselves with some very
    loose, and, therefore, more or less arbitrary estimation. The
    extreme inequality and uncertainty of a tax assessed in this
    manner, can be compensated only by its extreme moderation; in
    consequence of which, every man finds himself rated so very much
    below his real revenue, that he gives himself little disturbance
    though his neighbour should be rated somewhat lower.

    By what is called the land tax in England, it was intended that
    the stock should be taxed in the same proportion as land. When
    the tax upon land was at four shillings in the pound, or at
    one-fifth of the supposed rent, it was intended that stock should
    be taxed at one-fifth of the supposed interest. When the present
    annual land tax was first imposed, the legal rate of interest was
    six per cent. Every hundred pounds stock, accordingly, was
    supposed to be taxed at twenty-four shillings, the fifth part of
    six pounds. Since the legal rate of interest has been reduced to
    five per cent. every hundred pounds stock is supposed to be taxed
    at twenty shillings only. The sum to be raised, by what is called
    the land tax, was divided between the country and the principal
    towns. The greater part of it was laid upon the country; and of
    what was laid upon the towns, the greater part was assessed upon
    the houses. What remained to be assessed upon the stock or trade
    of the towns (for the stock upon the land was not meant to be
    taxed) was very much below the real value of that stock or trade.
    Whatever inequalities, therefore, there might be in the original
    assessment, gave little disturbance. Every parish and district
    still continues to be rated for its land, its houses, and its
    stock, according to the original assessment; and the almost
    universal prosperity of the country, which, in most places, has
    raised very much the value of all these, has rendered those
    inequalities of still less importance now. The rate, too, upon
    each district, continuing always the same, the uncertainty of
    this tax, so far as it might he assessed upon the stock of any
    individual, has been very much diminished, as well as rendered of
    much less consequence. If the greater part of the lands of
    England are not rated to the land tax at half their actual value,
    the greater part of the stock of England is, perhaps, scarce
    rated at the fiftieth part of its actual value. In some towns,
    the whole land tax is assessed upon houses; as in Westminster,
    where stock and trade are free. It is otherwise in London.

    In all countries, a severe inquisition into the circumstances of
    private persons has been carefully avoided.

    At Hamburg, {Memoires concernant les Droits, tom. i, p.74} every
    inhabitant is obliged to pay to the state one fourth per cent. of
    all that he possesses; and as the wealth of the people of Hamburg
    consists principally in stock, this tax maybe considered as a tax
    upon stock. Every man assesses himself, and, in the presence
    of the magiatrate, puts annually into the public coffer a certain
    sum of money, which he declares upon oath, to be one fourth per
    cent. of all that he possesses, but without declaring what it
    amounts to, or being liable to any examination upon that subject.
    This tax is generally suppused to be paid with great fidelity. In
    a small republic, where the people have entire confidence in
    their magistrates, are convinced of the necessity of the tax for
    the support of the state, and believe that it will be faithfully
    applied to that purpose, such conscientious and voluntary payment
    may sometimes be expected. It is not peculiar to the people of

    The canton of Underwald, in Switzerland, is frequently ravaged by
    storms and inundations, and it is thereby exposed to
    extraordinary expenses. Upon such occasions the people
    assemble, and every one is said to declare with the greatest
    frankness what he is worth, in order to be taxed accordingly. At
    Zurich, the law orders, that in cases of necessity, every one
    should be taxed in proportion to his revenue; the amount of which
    he is obliged to declare upon oath. They have no suspicion, it is
    said, that any of their fellow citizens will deceive them.
    At Basil, the principal revenue of the state arises from a small
    custom upon goods exported. All the citizens make oath, that
    they will pay every three months all the taxes imposed by law.
    All merchants, and even all inn-keepers, are trusted with keeping
    themselves the account of the goods which they sell, either
    within or without the territory. At the end of every three
    months, they send this account to the treasurer, with the amount
    of the tax computed at the bottom of it. It is not suspected
    that the revenue suffers by this confidence.{ Memoires concernant
    les Droits, tom. i p. 163, 167,171.}

    To oblige every citizen to declare publicly upon oath, the amount
    of his fortune, must not, it seems, in those Swiss cantons, be
    reckoned a hardship. At Hamburg it would be reckoned the
    greatest. Merchants engaged in the hazardous projects of trade,
    all tremble at the thoughts of being obliged, at all times, to
    expose the real state of their circumstances. The ruin of their
    credit, and the miscarriage of their projects, they foresee,
    would too often be the consequence. A sober and parsimonious
    people, who are strangers to all such projects, do not feel that
    they have occasion for any such concealment.

    In Holland, soon after the exaltation of the late prince of
    Orange to the stadtholdership, a tax of two per cent. or the
    fiftieth penny, as it was called, was imposed upon the whole
    substance of every citizen. Every citizen assesed himself, and
    paid his tax, in the same manner as at Hamburg, and it was in
    general supposed to have been paid with great fidelity. The
    people had at that time the greatest affection for their new
    government, which they had just established by a general
    insurrection. The tax was to be paid but once, in order to
    relieve the state in a particular exigency. It was, indeed, too
    heavy to be permanent. In a country where the market rate of
    interest seldom exceeds three per cent., a tax of two per cent.
    amounts to thirteen shillings and four pence in the pound, upon
    the highest neat revenue which is commonly drawn from stock. It
    is a tax which very few people could pay, without encroaching
    more or less upon their capitals. In a particular exigency, the
    people may, from great public zeal, make a great effort, and give
    up even a part of their capital, in order to relieve the state.
    But it is impossible that they should continue to do so for any
    considerable time; and if they did, the tax would soon ruin them
    so completely, as to render them altogether incapable of
    supporting the state.

    The tax upon stock, imposed by the land tax bill in England,
    though it is proportioned to the capital, is not intended to
    diminish or, take away any part of that capital. It is meant
    only to be a tax upon the interest of money, proportioned to that
    upon the rent of land; so that when the latter is at four
    shillings in the pound, the former may be at four shillings in
    the pound too. The tax at Hamburg, and the still more moderate
    taxes of Underwald and Zurich, are meant, in the same manner, to
    be taxes, not upon the capital, but upon the interest or neat
    revenue of stock. That of Holland was meant to be a tax upon the

    Taxes upon the Profit of particular Employments.

    In some countries, extraordinary taxes are imposed upon the
    profits of stock ; sometimes when employed in particular branches
    of trade, and sometimes when employed in agriculture.

    Of the former kind, are in England, the tax upon hawkers and
    pedlars, that upon hackney-coaches and chairs, and that which the
    keepers of ale-houses pay for a licence to retail ale and
    spiritous liquors. During the late war, another tax of the same
    kind was proposed upon shops. The war having been undertaken, it
    was said, in defence of the trade of the country, the merchants,
    who were to profit by it, ought to contribute towards the support
    of it.

    A tax, however, upon the profits of stock employed in any
    particular branch of trade, can never fall finally upon the
    dealers (who must in all ordinary cases have their reasonable
    profit, and, where the competition is free, can seldom have more
    than that profit), but always upon the consumers, who must be
    obliged to pay in the price of the goods the tax which the dealer
    advances ; and generally with some overcharge.

    A tax of this kind, when it is proportioned to the trade of the
    dealer, is finally paid by the consumer, and occasions no
    oppression to the dealer. When it is not so proportioned, but is
    the same upon all dealers, though in this case, too, it is
    finally paid by the consumer, yet it favours the great, and
    occasions some oppression to the small dealer. The tax of
    five shillings a-week upon every hackney coach, and that of ten
    shillings a-year upon every hackney chair, so far as it is
    advanced by the different keepers of such coaches and chairs, is
    exactly enough proportioned to the extent of their respective
    dealings. It neither favours the great, nor oppresses the smaller
    dealer. The tax of twenty shillings a-year for a licence to
    sell ale; of forty shillings for a licence to sell spiritous
    liquors ; and of forty shillings more for a licence to sell wine,
    being the same upon all retailers, must necessarily give some
    advantage to the great, and occasion some oppression to the small
    dealers. The former must find it more easy to get back the tax in
    the price of their goods than the latter. The moderation of the
    tax, however, renders this inequality of less importance; and it
    may to many people appear not improper to give some
    discouragement to the multiplication of little ale-houses.
    The tax upon shops, it was intended, should be the same upon all
    shops. It could not well have been otherwise. It would have been
    impossible to proportion, with tolerable exactness, the tax upon
    a shop to the extent of the trade carried on in it, without such
    an inquisition as would have been altogether insupportable in a
    free country. If the tax had been considerable, it would have
    oppressed the small, and forced almost the whole retail trade
    into the hands of the great dealers. The competition of the
    former being taken away, the latter would have enjoyed a monopoly
    of the trade ; and, like all other monopolists, would soon have
    combined to raise their profits much beyond what was necessary
    for the payment of the tax. The final payment, instead of falling
    upon the shop-keeper, would have fallen upon the consumer, with a
    considerable overcharge to the profit of the shop-keeper. For
    these reasons, the project of a tax upon shops was laid aside,
    and in the room of it was substituted the subsidy, 1759.

    What in France is called the personal taille, is perhaps, the
    most important tax upon the profits of stock employed in
    agriculture, that is levied in any part of Europe.

    In the disorderly state of Europe, during the prevalence of the
    feudal government, the sovereign was obliged to content himself
    with taxing those who were too weak to refuse to pay taxes. The
    great lords, though willing to assist him upon particular
    emergencies, refused to subject themselves to any constant tax,
    and he was not strong enough to force them. The occupiers of land
    all over Europe were, the greater part of them, originally
    bond-men. Through the greater part of Europe, they were gradually
    emancipated. Some of them acquired the property of landed
    estates, which they held by some base or ignoble tenure,
    sometimes under the king, and sometimes under some other great
    lord, like the ancient copy-holders of England. Others, without
    acquiring the property, obtained leases for terms of years, of
    the lands which they occupied under their lord, and thus became
    less dependent upon him. The great lords seem to have beheld the
    degree of prosperity and independency, which this inferior order
    of men had thus come to enjoy, with a malignant and contemptuous
    indignation, and willingly consented that the sovereign should
    tax them. In some countries, this tax was confined to the lands
    which were held in property by an ignoble tenure ; and, in this
    case, the taille was said to be real. The land tax established by
    the late king of Sardinia, and the taille in the provinces of
    Languedoc, Provence, Dauphine, and Britanny ; in the generality
    of Montauban, and in the elections of Agen and Condom, as well as
    in some other districts of France; are taxes upon lands held in
    property by an ignoble tenure. In other countries, the tax
    was laid upon the supposed profits of all those who held, in farm
    or lease, lands belonging to other people, whatever might be the
    tenure by which the proprietor held them ; and in this case, the
    taille was said to be personal. In the greater part of those
    provinces of France, which are called the countries of elections,
    the taille is of this kind. The real taille, as it is imposed
    only upon a part of the lands of the country, is necessarily an
    unequal, but it is not always an arbitrary tax, though it is so
    upon some occasions. The personal taille, as it is intended to be
    proportioned to the profits of a certain class of people, which
    can only be guessed at, is necessarily both arbitrary and

    In France, the personal taille at present (1775) annually imposed
    upon the twenty generalities, called the countries of elections,
    amounts to 40,107,239 livres, 16 sous. {Memoires concernant les
    Droits, etc tom. ii, p.17.} the proportion in which this sum is
    assessed upon those different provinces, varies from year to
    year, according to the reports which are made to the king's
    council concerning the goodness or badness of the crops, as well
    as other circumstances, which may either increase or diminish
    their respective abilities to pay. Each generality is divided
    into a certain number of elections; and the proportion in which
    the sum imposed upon the whole generatlity is divided among those
    different elections, varies likewise from year to year, according
    to the reports made to the council concerning their respective
    abilities. It seems impossible, that the council, with the
    best intentions, can ever proportion, with tolerable exactness,
    either of these two assessments to the real abilities of the
    province or district upon which they are respectively laid.
    Ignorance and misinformation must always, more or less. mislead
    the most upright council. The proportion which each parish ought
    to support of what is assessed upon the whole election, and that
    which each individual ought to support of what is assessed upon
    his particular parish, are both in the same manner varied from
    year to year, according as circumstances are supposed to require.
    These circumstances are judged of, in the one case, by the
    officers of the election, in the other, by those of the parish;
    and both the one and the other are, more or less, under the
    direction and influence of the intendant. Not only ignorance
    and misinformation, but friendship, party animosity, and private
    resentment, are said frequently to mislead such assessors. No man
    subject to such a tax, it is evident, can ever be certain, before
    he is assessed, of what he is to pay. He cannot even be certain
    after he is assessed. If any person has been taxed who ought to
    have been exempted, or if any person has been taxed beyond his
    proportion, though both must pay in the mean time, yet if they
    complain, and make good their complaints, the whole parish is
    reimposed next year, in order to reimburse them. If any of
    the contributors become bankrupt or insolvent, the collector is
    obliged to advance his tax ; and the whole parish is reimposed
    next year, in order to reimburse the collector. If the collector
    himself should become bankrupt, the parish which elects him must
    answer for his conduct to the receiver-general of the election.
    But, as it might be troublesome for the receiver to prosecute the
    whole parish, he takes at his choice five or six of the richest
    contributors, and obliges them to make good what had been lost by
    the insolvency of the collector. The parish is afterwards
    reimposed, in order to reimburse those five or six. Such
    reimpositions are always over and above the taille of the
    particular year in which they are laid on.

    When a tax is imposed upon the profits of stock in a particular
    branch of trade, the traders are all careful to bring no more
    goods to market than what they can sell at a price sufficient to
    reimburse them from advancing the tax. Some of them withdraw a
    part of their stocks from the trade, and the market is more
    sparingly supplied than before. The price of the goods rises, and
    the final payment of the tax falls upon the consumer. But when a
    tax is imposed upon the profits of stock employed in agriculture,
    it is not the interest of the farmers to withdraw any part of
    their stock from that employment. Each farmer occupies a certain
    quantity of land, for which he pays rent. For the proper
    cultivation of this land, a certain quantity of stock is
    necessary; and by withdrawing any part of this necessary
    quantity, the farmer is not likely to be more able to pay either
    the rent or the tax. In order to pay the tax, it can never be his
    interest to diminish the quantity of his produce, nor
    consequently to supply the market more sparingly than before. The
    tax, therefore, will never enable him to raise the price of his
    produce, so as to reimburse himself, by throwing the final
    payment upon the consumer. The farmer, however, must have his
    reasonable profit as well as every other dealer, otherwise he
    must give up the trade. After the imposition of a tax of this
    kind, he can get this reasonable profit only by paying less rent
    to the landlord. The more he is obliged to pay in the way of tax,
    the less he can afford to pay in the way of rent. A tax of this
    kind, imposed during the currency of a lease, may, no doubt,
    distress or ruin the farmer. Upon the renewal of the lease, it
    must always fall upon the landlord.

    In the countries where the personal taille takes place, the
    farmer is commonly assessed in proportion to the stock which he
    appears to employ in cultivation. He is, upon this account,
    frequently afraid to have a good team of horses or oxen, but
    endeavours to cultivate with the meanest and most wretched
    instrutnents of husbandry that he can. Such is his distrust in
    the justice of his assessors, that he counterfeits poverty, and
    wishes to appear scarce able to pay anything, for fear of being
    obliged to pay too much. By this miserable policy, he does not,
    perhaps, always consult his own interest in the most effectual
    manner ; and he probably loses more by the diminution of his
    produce, than he saves by that of his tax. Though, in consequence
    of this wretched cultivation, the market is, no doubt, somewhat
    worse supplied; yet the small rise of price which this may
    occasion, as it is not likely even to indemnify the farmer for
    the diminution of his produce, it is still less likely to enable
    him to pay more rent to the landlord. The public, the farmer, the
    landlord, all suffer more or less by this degraded cultivation.
    That the personal taille tends, in many different ways, to
    discourage cultivation, and consequently to dry up the principal
    source of the wealth of every great country, I have already had
    occasion to observe in the third book of this Inquiry.

    What are called poll-taxes in the southern provinces of North
    America, and the West India islands, annual taxes of so much
    a-head upon every negro, are properly taxes upon the profits of a
    certain species of stock employed in agriculture. As the
    planters, are the greater part of them, both farmers and
    landlords, the final payment of the tax falls upon them in their
    quality of landlords, without any retribution.

    Taxes of so much a head upon the bondmen employed in cultivation,
    seem anciently to have been common all over Europe. There
    subsists at present a tax of this kind in the empire of Russia.
    It is probably upon this account that poll-taxes of all kinds
    have often been represented as badges of slavery. Every tax,
    however, is, to the person who pays it, a badge, not of slavery,
    but of liberty. It denotes that he is subject to government,
    indeed ; but that, as he has some property, he cannot himself be
    the property of a master. A poll tax upon slaves is altogether
    different from a poll-tax upon freemen. The latter is paid by the
    persons upon whom it is imposed; the former, by a different set
    of persons. The latter is either altogether arbitrary, or
    altogether unequal, and, in most cases, is both the one and the
    other; the former, though in some respects unequal, different
    slaves being of different values, is in no respect arbitrary.
    Every master, who knows the number of his own slaves, knows
    exactly what he has to pay. Those different taxes, however, being
    called by the same name, have been considered as of the same

    The taxes which in Holland are imposed upon men and maid
    servants, are taxes, not upon stock, but upon expense; and so far
    resemble the taxes upon consumable commodities. The tax of a
    guinea a-head for every man-servant, which has lately been
    imposed in Great Britain, is of the same kind. It falls heaviest
    upon the middling rank. A man of two hundred a-year may keep a
    single man-servant. A man of ten thousand a-year will not keep
    fifty. It does not affect the poor.

    Taxes upon the profits of stock, in particular employments, can
    never affect the interest of money. Nobody will lend his money
    for less interest to those who exercise the taxed, than to those
    who exercise the untaxed employments. Taxes upon the revenue
    arising from stock in all employments, where the government
    attempts to levy them with any degree of exactness, will, in many
    cases, fall upon the interest of money. The vingtieme, or
    twentieth penny, in France, is a tax of the same kind with what
    is called the land tax in England, and is assessed, in the same
    manner, upon the revenue arising upon land, houses, and stock. So
    far as it affects stock, it is assessed, though not with great
    rigour, yet with much more exactness than that part of the land
    tax in England which is imposed upon the same fund. It, in many
    cases, falls altogether upon the interest of money. Money is
    frequently sunk in France, upon what are called contracts for the
    constitution of a rent ; that is, perpetual annuities, redeemable
    at any time by the debtor, upon payment of the sum originally
    advanced, but of which this redemption is not exigible by the
    creditor except in particular cases. The vingtieme seems not
    to have raised the rate of those annuities, though it is exactly
    levied upon them all.

    APPENDIX TO ARTICLES I. AND II. ˜ Taxes upon the Capital Value of
    Lands, Houses, and Stock.

    While property remains in the possession of the same person,
    whatever permanent taxes may have been imposed upon it, they have
    never been intended to diminish or take away any part of its
    capital value, but only some part of the revenue arising from it.
    But when property changes hands, when it is transmitted either
    from the dead to the living, or from the living to the living,
    such taxes have frequently been imposed upon it as necessarily
    take away some part of its capital value.

    The transference of all sorts of property from the dead to the
    living, and that of immoveable property of land and houses from
    the living to the living, are transactions which are in their
    nature either public and notorious, or such as cannot be long
    concealed. Such transactions, therefore, may be taxed directly.
    The transference of stock or moveable property, from the living
    to the living, by the lending of money, is frequently a secret
    transaction, and may always be made so. It cannot easily,
    therefore, be taxed directly. It has been taxed indirectly in two
    different ways; first, by requiring that the deed, containing the
    obligation to repay, should be written upon paper or parchment
    which had paid a certain stamp duty, otherwise not to be valid ;
    secondly, by requiring, under the like penalty of invalidity,
    that it should be recorded either in a public or secret register,
    and by imposing certain duties upon such registration. Stamp
    duties, and duties of registration, have frequently been imposed
    likewise upon the deeds transferring property of all kinds from
    the dead to the living, and upon those transferring immoveable
    property from the living to the living ; transactions which might
    easily have been taxed directly.

    The vicesima hereditatum, or the twentieth penny of inheritances,
    imposed by Augustus upon the ancient Romans, was a tax upon the
    transference of property from the dead to the living. Dion
    Cassius, { Lib. 55. See also Burman. de Vectigalibus Pop. Rom.
    cap. xi. and Bouchaud de l'impot du vingtieme sur les
    successions.} the author who writes concerning it the least
    indistinctly, says, that it was imposed upon all successions,
    legacies and donations, in case of death, except upon those to
    the nearest relations, and to the poor.

    Of the same kind is the Dutch tax upon successions. { See
    Memoires concernant les Droits, etc. tom i, p. 225.} Collateral
    successions are taxed according to the degree of relation, from
    five to thirty per cent. upon the whole value of the succession.
    Testamentary donations, or legacies to collaterals, are subject
    to the like duties. Those from husband to wife, or from wife to
    husband, to the fiftieth penny. The luctuosa hereditas, the
    mournful succession of ascendants to descendants, to the
    twentieth penny only. Direct successions, or those of
    descendants to ascendants, pay no tax. The death of a father, to
    such of his children as live in the same house with him, is
    seldom attended with any increase, and frequently with a
    considerable diminution of revenue ; by the loss of his industry,
    of his office, or of some life-rent estate, of which he may have
    been in possession. That tax would be cruel and oppressive,
    which aggravated their loss, by taking from them any part of his
    succession. It may, however, sometimes be otherwise with
    those children, who, in the language of the Roman law, are said
    to be emancipated; in that of the Scotch law, to be
    foris-familiated ; that is, who have received their portion, have
    got families of their own, and are supported by funds separate
    and independent of those of their father. Whatever part of his
    succession might come to such children, would be a real addition
    to their fortune, and might, therefore, perhaps, without more
    inconveniency than what attends all duties of this kind, be
    liable to some tax.

    The casualties of the feudal law were taxes upon the transference
    of land, both from the dead to the living, and from the living to
    the living. In ancient times, they constituted, in every part
    of Europe, one of the principal branches of the revenue of the

    The heir of every immediate vassal of the crown paid a certain
    duty, generally a year's rent, upon receiving the investiture of
    the estate. If the heir was a minor, the whole rents of the
    estate. during the continuance of the minority, devolved to the
    superior, without any other charge besides the maintenance of the
    minor, and the payment of the widow's dower, when there happened
    to be a dowager upon the land. When the minor came to de of age,
    another tax, called relief, was still due to the superior, which
    generally amounted likewise to a year's rent. A long minority,
    which, in the present times, so frequently disburdens a great
    estate of all its incumbrances. and restores the family to their
    ancient splendour, could in those times have no such effect. The
    waste, and not the disincumbrance of the estate, was the common
    effect of a long minority.

    By a feudal law, the vassal could not alienate without the
    consent of his superior, who generally extorted a fine or
    composition on granting it. This fine, which was at first
    arbitrary, came, in many countries, to be regulated at a certain
    portion of the price of the land. In some countries, where the
    greater part of the other feudal customs have gone into disuse,
    this tax upon the alienation of land still continues to make a
    very considerable branch of the revenue of the sovereign. In the
    canton of Berne it is so high as a sixth part of the price of all
    noble fiefs, and a tenth part of that of all ignoble
    ones.{Memoires concernant les Droits, etc, tom.i p.154} In the
    canton of Lucern, the tax upon the sale of land is not universal,
    and takes place only in certain districts. But if any person
    sells his land in order to remove out of the territory, he pays
    ten per cent. upon the whole price of the sale. { id. p.157.}
    Taxes of the same kind, upon the sale either of all lands, or of
    lands held by certain tenures, take place in many other
    countries, and make a more or less considerable branch of the
    revenue of the sovereign.

    Such transactions may be taxed indirectly, by means either of
    stamp duties, or of duties upon registration; and those duties
    either may, or may not, be proportioned to the value of the
    subject which is transferred.

    In Great Britain, the stamp duties are higher or lower, not so
    much according to the value of the property transferred (an
    eighteen-penny or half-crown stamp being sufficient upon a bond
    for the largest sum of money), as according to the nature of the
    deed. The highest do not exceed six pounds upon every sheet of
    paper, or skin of parchment ; and these high duties fall chiefly
    upon grants from the crown, and upon certain law proceedings,
    without any regard to the value of the subject. There are, in
    Great Britain, no duties on the registration of deeds or
    writings, except the fees of the officers who keep the register ;
    and these are seldom more than a reasonable recompence for their
    labour. The crown derives no revenue from them.

    In Holland {Memoires concernant les Droits, etc. tom. i. p 223,
    224, 225.} there are both stamp duties and duties upon
    registration ; which in some cases are, and in some are not,
    proportioned to the value of the property transferred. All
    testaments must be written upon stamped paper, of which the price
    is proportioned to the property disposed of ; so that there are
    stamps which cost from three pence or three stivers a-sheet, to
    three hundred florins, equal to about twenty-seven pounds ten
    shillings of our money. If the stamp is of an inferior price to
    what the testator ought to have made use of, his succession is
    confiscated. This is over and above all their other taxes on
    succession. Except bills of exchange, and some other mercantile
    bills, all other deeds, bonds, and contracts, are subject to a
    stamp duty. This duty, however, does not rise in proportion to
    the value of the subject. All sales of land and of houses, and
    all mortgages upon either, must be registered, and, upon
    registration, pay a duty to the state of two and a-half per cent.
    upon the amount of the price or of the mortgage. This duty is
    extended to the sale of all ships and vessels of more than two
    tons burden, whether decked or undecked. These, it seems, are
    considered as a sort of houses upon the water. The sale of
    moveables, when it is ordered by a court of justice, is subject
    to the like duty of two and a-half per cent.

    In France, there are both stamp duties and duties upon
    registration. The former are considered as a branch of the
    aids of excise, and, in the provinces where those duties take
    place, are levied by the excise officers. The latter are
    considered as a branch of the domain of the crown and are levied
    by a different set of officers.

    Those modes of taxation by stamp duties and by duties upon
    registration, are of very modern invention. In the course of
    little more than a century, however, stamp duties have, in
    Europe, become almost universal, and duties upon registration
    extremely common. There is no art which one government sooner
    learns of another, than that of draining money from the pockets
    of the people.

    Taxes upon the transference of property from the dead to the
    living, fall finally, as well as immediately, upon the persons to
    whom the property is transferred. Taxes upon the sale of
    land fall altogether upon the seller. The seller is almost
    always under the necessity of selling, and must, therefore, take
    such a price as he can get. The buyer is scarce ever under the
    necessity of buying, and will, therefore, only give such a price
    as he likes. He considers what the land will cost him, in tax and
    price together. The more he is obliged to pay in the way of tax,
    the less he will be disposed to give in the way of price. Such
    taxes, therefore, fall almost always upon a necessitous person,
    and must, therefore, be frequently very cruel and oppressive.
    Taxes upon the sale of new-built houses, where the building is
    sold without the ground, fall generally upon the buyer, because
    the builder must generally have his profit ; otherwise he must
    give up the trade. If he advances the tax, therefore, the buyer
    must generally repay it to him. Taxes upon the sale of old
    houses, for the same reason as those upon the sale of land, fall
    generally upon the seller ; whom, in most cases, either
    conveniency or necessity obliges to sell. The number of new-built
    houses that are annually brought to market, is more or less
    regulated by the demand. Unless the demand is such as to afford
    the builder his profit, after paying all expenses, he will build
    no more houses. The number of old houses which happen at any time
    to come to market, is regulated by accidents, of which the
    greater part have no relation to the demand. Two or three great
    bankruptcies in a mercantile town, will bring many houses to
    sale, which must be sold for what can be got for them. Taxes upon
    the sale of ground-rents fall altogether upon the seller, for the
    same reason as those upon the sale of lands. Stamp duties, and
    duties upon the registration of bonds and contracts for borrowed
    money, fall altogether upon the borrower, and, in fact, are
    always paid by him. Duties of the same kind upon law proceedings
    fall upon the suitors. They reduce to both the capital value of
    the subject in dispute. The more it costs to acquire any
    property, the less must be the neat value of it when acquired.

    All taxes upon the transference of property of every kind, so far
    as they diminish the capital value of that property, tend to
    diminish the funds destined for the maintenance of productive
    labour. They are all more or less unthrifty taxes that
    increase the revenue of the sovereign, which seldom maintains any
    but unproductive labourers, at the expense of the capital of the
    people, which maintains none but productive.

    Such taxes, even when they are proportioned to the value of the
    property transferred, are still unequal; the frequency of
    transference not being always equal in property of equal value.
    When they are not proportioned to this value, which is the case
    with the greater part of the stamp duties and duties of
    registration, they are still more so. They are in no respect
    arbitrary, but are, or may be, in all cases, perfectly clear and
    certain. Though they sometimes fall upon the person who is not
    very able to pay, the time of payment is, in most cases,
    sufficiently convenient for him. When the payment becomes due, he
    must, in most cases, have the more to pay. They are levied at
    very little expense, and in general subject the contributors to
    no other inconveniency, besides always the unavoidable one of
    paying the tax.

    In France, the stamp duties are not much complained of. Those
    of registration, which they call the Controle, are. They give
    occasion, it is pretended, to much extortion in the officers of
    the farmers-general who collect the tax, which is in a great
    measure arbitrary and uncertain. In the greater part of the
    libels which have been written against the present system of
    finances in France, the abuses of the controle make a principal
    article. Uncertainty, however, does not seem to be necessarily
    inherent in the nature of such taxes. If the popular
    complaints are well founded, the abuse must arise, not so much
    from the nature of the tax as from the want of precision and
    distinctness in the words of the edicts or laws which impose it.

    The registration of mortgages, and in general of all rights upon
    immoveable property, as it gives great security both to creditors
    and purchasers, is extremely advantageous to the public. That of
    the greater part of deeds of other kinds, is frequently
    inconvenient and even dangerous to individuals, without any
    advantage to the public. All registers which, it is acknowledged,
    ought to be kept secret, ought certainly never to exist. The
    credit of individuals ought certainly never to depend upon so
    very slender a security, as the probity and religion of the
    inferior officers of revenue. But where the fees of registration
    have been made a source of revenue to the sovereign,
    register-officcs have commonly been multiplied without end, both
    for the deeds which ought to be registered, and for those which
    ought not. In France there are several different sorts of secret
    registers. This abuse, though not perhaps a necessary, it must be
    acknowledged, is a very natural effect of such taxes.

    Such stamp duties as those in England upon cards and dice, upon
    newspapers and periodical pamphlets, etc. are properly taxes upon
    consumption; the final payment falls upon the persons who use or
    consume such commodities. Such stamp duties as those upon
    licences to retail ale, wine, and spiritous liquors, though
    intended, perhaps, to fall upon the profits of the retailers, are
    likewise finally paid by the consumers of those liquors. Such
    taxes, though called by the same name, and levied by the same
    officers, and in the same manner with the stamp duties above
    mentioned upon the transference of property, are, however, of a
    quite different nature, and fall upon quite different funds.

    ARTICLE III. ˜ Taxes upon the Wages of Labour.

    The wages of the inferior classes of work men, I have
    endeavoured to show in the first book are everywhere necessarily
    regulated by two different circumstances; the demand for labour,
    and the ordinary or average price of provisions. The demand for
    labour, according as it happens to be either increasing
    stationary or declining ; or to require an increasing,
    stationary, or declining population. regulates the subsistence of
    the labourer, and determines in what degree it shall be either
    liberal, moderate, or scanty. The ordinary average price of
    provisions determines the quantity of money which must be paid to
    the workman, in order to enable him, one year with another, to
    purchase this liberal, moderate, or scanty subsistence. While the
    demand for the labour and the price of provisions, therefore,
    remain the same, a direct tax upon the wages of labour can have
    no other effect, than to raise them somewhat higher than the tax.
    Let us suppose, for example, that, in a particular place, the
    demand for labour and the price of provisions were such as to
    render ten shillings a-week the ordinary wages of labour ; and
    that a tax of one-fifth, or four shillings in the pound, was
    imposed upon wages. If the demand for labour and the price of
    provisions remained the same, it would still be necessary that
    the labourer should, in that place, earn such a subsistence as
    could be bought only for ten shillings a-week; so that, after
    paying the tax, he should have ten shillings a-week free wages.
    But, in order to leave him such free wages, after paying such a
    tax, the price of labour must, in that place, soon rise, not to
    twelve sillings aweek only, but to twelve and sixpence ; that is,
    in order to enable him to pay a tax of one-fifth, his wages must
    necessarily soon rise, not one-fifth part only, but one-fourth.
    Whatever was the proportion of the tax, the wages of labour must,
    in all cases rise, not only in that proportion, but in a higher
    proportion. If the tax for example, was one-tenth, the wages
    of labour must necessarily soon rise, not one-tenth part only,
    but one-eighth.

    A direct tax upon the wages of labour, therefore, though the
    labourer might, perhaps, pay it out of his hand, could not
    properly be said to be even advanced by him ; at least if the
    demand for labour and the average price of provisions remained
    the same after the tax as before it. In all such cases, not only
    the tax, but something more than the tax, would in reality be
    advanced by the person who immediately employed him. The final
    payment would, in different cases, fall upon different persons.
    The rise which such a tax might occasion in the wages of
    manufacturing labour would be advanced by the master
    manufacturer, who would both be entitled and obliged to charge
    it, with a profit, upon the price of his goods. The final payment
    of this rise of wages, therefore, together with the additional
    profit of the master manufacturer would fall upon the consumer.
    The rise which such a tax might occasion in the wages of country
    labour would be advanced by the farmer, who, in order to maintain
    the same number of labourers as before, would be obliged to
    employ a greater capital. In order to get back this greater
    capital, together with the ordinary profits of stock, it would be
    necessary that he should retain a larger portion, or, what comes
    to the same thing, the price of a larger portion, of the produce
    of the land, and, consequently, that he should pay less rent to
    the landlord. The final payment of this rise of wages, therefore,
    would, in this case, fall upon the landlord, together with the
    additional profit of the farmer who had advanced it. In all
    cases, a direct tax upon the wages of labour must, in the
    long-run, occasion both a greater reduction in the rent of land,
    and a greater rise in the price of manufactured goods than would
    have followed from the proper assessment of a sum equal to the
    produce of the tax, partly upon the rent of land, and partly upon
    consumable commodities.

    If direct taxes upon the wages of labour have not always
    occasioned a proportionable rise in those wages, it is because
    they have generally occasioned a considerable fall in the demand
    of labour. The declension of industry, the decrease of
    employment for the poor, the diminution of the annual produce of
    the land and labour of the country, have generally been the
    effects of such taxes. In consequence of them, however, the price
    of labour must always be higher than it otherwise would have been
    in the actual state of the demand ; and this enhancenmnt of
    price, together with the profit of those who advance it, must
    always be finally paid by the landlords and comsumers.

    A tax upon the wages of country labour does not raise the price
    of the rude produce of land in proportion to the tax; for the
    same reason that a tax upon the farmer's profit does not raise
    that price in that proportion.

    Absurd and destructive as such taxes are, however, they take
    place in many countries. In France, that part of the taille which
    is charged upon the industry of workmen and day-laboururs in
    country villages, is properly a tax of this kind. Their wages are
    computed according to the common rate of the district in which
    they reside ; and, that they may be as little liable as possible
    to any overcharge, their yearly gains are estimated at no more
    than two hundred working days in the year. {Memoires concernant
    les Droits, etc. tom. ii. p. 108.} The tax of each individual is
    varied from year to year, according to different circumstances,
    of which the collector or the commissary, whom intendant appoints
    to assist him, are the judges. In Bohemia, in consequence of
    the alteration in the system of finances which was begun in 1748,
    a very heavy tax is imposed upon the industry of artificers. They
    are divided into four classes. The highest class pay a hundred
    florins a year, which, at two-and-twenty pence half penny
    a-florin, amounts to £9:7:6. The second class are taxed at
    seventy ; the third at fifty ; and the fourth, comprehending
    artificers in villages, and the lowest class of those in towns,
    at twenty-five florins.{ Memoires concemant les Droits, etc. tom.
    iii. p. 87.}

    The recompence of ingenious artists, and of men of liberal
    professions, I have endeavoured to show in the first book,
    necessarily keeps a certain proportion to the emoluments of
    inferior trades. A tax upon this recompence, therefore, could
    have no other effect than to raise it somewhat higher than in
    proportion to the tax. If it did not rise in this manner, the
    ingenious arts and the liberal professions, being; no longer upon
    a level with other trades, would be so much deserted, that they
    would soon return to that level.

    The emoluments of offices are not, like those of trades and
    professions, regulated by the free competition of the market, and
    do not, therefore, always bear a just proportion to what the
    nature of the employment requires. They are, perhaps, in most
    countries, higher than it requires; the persons who have the
    administration of government being generally disposed to regard
    both themselves and their immediate dependents, rather more than
    enough. The emoluments of offices, therefore, can, in most cases,
    very well bear to be taxed. The persons, besides, who enjoy
    public offices, especially the more lucrative, are, in all
    countries, the objects of general envy ; and a tax upon their
    emolmnents, even though it should be somewhat higher than upon
    any other sort of revenue, is always a very popular tax. In
    England, for example, when, by the land-tax, every other sort of
    revenue was supposed to be assessed at four shillings in the
    pound, it was very popular to lay a real tax of five shillings
    and sixpence in the pound upon the salaries of offices which
    exceeded a hundred pounds a-year; the pensions of the younger
    branches of the royal family, the pay of the officers of the army
    and navy, and a few others less obnoxious to envy, excepted.
    There are in England no other direct taxes upon the wages of

    ARTICLE IV. ˜ Taxes which it is intended should fall
    indifferently upon every different Species of Revenue.

    The taxes which it is intended should fall indifferently upon
    every different species of revenue, are capitation taxes, and
    taxes upon consunmble commodities. Those must be paid
    indifferently, from whatever revenue the contributors may possess
    ; from the rent of their land, from the profits of their stock,
    or from the wages of their labour.

    Capitation Taxes.

    Capitation taxes, if it is attempted to proportion them to the
    fortune or revenue of each contributor, become altogether
    arbitrary. The state of a man's fortune varies from day to day ;
    and, without an inquisition, more intolerable than any tax, and
    renewed at least once every year, can only be guessed at. His
    assessment, therefore, must, in most cases, depend upon the good
    or bad humour of his assessors, and must, therefore, be
    altogether arbitrary and uncertain.

    Capitation taxes, if they are proportioned, not to the supposed
    fortune, but to the rank of each contributor, become altogether
    unequal ; the degrees of fortune being frequently unequal in the
    same degree of rank.

    Such taxes, therefore, if it is attempted to render them equal,
    become altogether arbitrary and uncertain ; and if it is
    attempted to render them certain and not arbitrary, become
    altogether unequal. Let the tax be light or heavy, uncertainty is
    always a great grievance. In a light tax, a considerable degree
    of inequality may be supported; in a heavy one, it is altogether

    In the different poll-taxes which took place in England during
    the reign of William III. the contributors were, the greater part
    of them, assessed according to the degree of their rank; as
    dukes, marquises, earls, viscounts, barons, esquires, gentlemen,
    the eldest and youngest sons of peers, etc. All shop-keepers and
    tradesmen worth more than three hundred pounds, that is, the
    better sort of them, were subject to the same assessment, how
    great soever might be the difference in their fortunes. Their
    rank was more considered than their fortune. Several of those
    who, in the first poll-tax, were rated according to their
    supposed fortune were afterwards rated according to their rank.
    Serjeants, attorneys, and proctors at law, who, in the first
    poll-tax, were assessed at three shillings in the pound of their
    supposed income, were afterwards assessed as gentlemen. In the
    assessment of a tax which was not very heavy, a considerable
    degree of inequality had been found less insupportable than any
    degree of uncertainty.

    In the capitation which has been levied in France, without-any
    interruption, since the beginning of the present century, the
    highest orders of people are rated according to their rank, by an
    invariable tariff; the lower orders of people, according to what
    is supposed to be their fortune, by an assessment which varies
    from year to year. The officers of the king's court, the judges,
    and other officers in the superior courts of justice, the
    officers of the troops, etc are assessed in the first manner. The
    inferior ranks of people in the provinces are assessed in the
    second. In France, the great easily submit to a considerable
    degree of inequality in a tax which, so far as it affects them,
    is not a very heavy one; but could not brook the arbitrary
    assessment of an intendant.

    The inferior ranks of people must, in that country, suffer
    patiently the usage which their superiors think proper to give

    In England, the different poll-taxes never produced the sum which
    had been expected from them, or which it was supposed they might
    have produced, had they been exactly levied. In France, the
    capitation always produces the sum expected from it. The mild
    government of England, when it assessed the different ranks of
    people to the poll-tax, contented itself with what that
    assessment happened to produce, and required no compensation for
    the loss which the state might sustain, either by those who could
    not pay, or by those who would not pay (for there were many
    such), and who, by the indulgent execution of the law, were not
    forced to pay. The more severe government of France assesses upon
    each generality a certain sum, which the intendant must find as
    he can. If any province complains of being assessed too high, it
    may, in the assessment of next year, obtain an abatement
    proportioned to the overcharge of the year before ; but it must
    pay in the mean time. The intendant, in order to be sure of
    finding the sum assessed upon his generality, was empowered to
    assess it in a larger sum, that the failure or inability of some
    of the contributors might be compensated by the overcharge of the
    rest ; and till 1765, the fixation of this surplus assessment was
    left altogether to his discretion. In that year, indeed, the
    council assumed this power to itself. In the capitation of the
    provinces, it is observed by the perfectly well informed author
    of the Memoirs upon the Impositions in France, the proportion
    which falls upon the nobility, and upon those whose privileges
    exempt them from the taille, is the least considerable. The
    largest falls upon those subject to the taille, who are assessed
    to the capitation at so much a-pound of what they pay to that
    other tax.

    Capitation taxes, so far as they are levied upon the lower ranks
    of people, are direct taxes upon the wages of labour, and are
    attended with all the inconveniencics of such taxes.

    Capitation taxes are levied at little expense ; and, where they
    are rigorously exacted, afford a very sure revenue to the state.
    It is upon this account that, in countries where the case,
    comfort, and security of the inferior ranks of people are little
    attended to, capitation taxes are very common. It is in general,
    however, but a small part of the public revenue, which, in a
    great empire, has ever been drawn from such taxes ; and the
    greatest sum which they have ever afforded, might always have
    been found in some other way much more convenient to the people.

    Taxes upon Consumable Commodities.

    The impossibility of taxing the people, in proportion to their
    revenue, by any capitation, seems to have given occasion to the
    invention of taxes upon consumable commodities. The state not
    knowing how to tax, directly and proportionably, the revenue of
    its subjects, endeavours to tax it indirectly by taxing their
    expense, which, it is supposed, will, in most cases, be nearly in
    proportion to their revenue. Their expense is taxed, by taxing
    the consumable commodities upon which it is laid out.

    Consumable commodities are either necessaries or luxuries.

    By necessaries I understand, not only the commodities which are
    indispensibly necessary for the support of life, but whatever the
    custom of the country renders it indecent for creditable people,
    even of the lowest order, to be without. A linen shirt, for
    example, is, strictly speaking, not a necessary of life. The
    Greeks and Romans lived, I suppose, very comfortably, though they
    had no linen. But in the present times, through the greater part
    of Europe, a creditable day-labourer would be ashamed to appear
    in public without a linen shirt, the want of which would be
    supposed to denote that disgraceful degree of poverty, which, it
    is presumed, nobody can well fall into without extreme bad
    conduct. Custom. in the same manner, has rendered leather shoes a
    necessary of life in England. The poorest creditable person, of
    either sex, would be ashamed to appear in public without them. In
    Scotland, custom has rendered them a necessary of life to the
    lowest order of men ; but not to the same order of women, who
    may, without any discredit, walk about barefooted. In France,
    they are necessaries neither to men nor to women; the lowest rank
    of both sexes appearing there publicly, without any discredit,
    sometimes in wooden shoes, and sometimes barefooted. Under
    necessaries, therefore, I comprehend, not only those things which
    nature, but those things which the established rules of decency
    have rendered necessary to the lowest rank of people. All other
    things I call luxuries, without meaning, by this appellation, to
    throw the smallest degree of reproach upon the temperate use of
    them. Beer and ale, for example, in Great Britain, and wine, even
    in the wine countries, I call luxuries. A man of any rank may,
    without any reproach, abstain totally from tasting such liquors.
    Nature does not render them necessary for the support of life ;
    and custom nowhere renders it indecent to live without them.

    As the wages of labour are everywhere regulated, partly by the
    demand for it, and partly by the average price of the necessary
    articles of subsistence; whatever raises this average price must
    necessarily raise those wages; so that the labourer may still be
    able to purchase that quantity of those necessary articles which
    the state of the demand for labour, whether increasing,
    stationary, or declining, requires that he should have.{See book
    i.chap. 8} A tax upon those articles necessarily raises their
    price somewhat higher than the amount of the tax, because the
    dealer, who advances the tax, must generally get it back, with a
    profit. Such a tax must, therefore, occasion a rise in the wages
    of labour, proportionable to this rise of price.

    It is thus that a tax upon the necessaries of life operates
    exactly in the same manner as a direct tax upon the wages of
    labour. The labourer, though he may pay it out of his hand,
    cannot, for any considerable time at least, be properly said even
    to advance it. It must always, in the long-run, be advanced to
    him by his immediate employer, in the advanced state of wages.
    His employer, if he is a manufacturer, will charge upon the price
    of his goods the rise of wages, together with a profit, so that
    the final payment of the tax, together with this overcharge, will
    fall upon the consumer. If his employer is a farmer, the final
    payment, together with a like overcharge, will fall upon the rent
    of the landlord.

    It is otherwise with taxes upon what I call luxuries, even upon
    those of the poor. The rise in the price of the taxed
    commodities, will not necessarily occasion any rise in the wages
    of labour. A tax upon tobacco, for example, though a luxury of
    the poor, as well as of the rich, will not raise wages. Though it
    is taxed in England at three times, and in France at fifteen
    times its original price, those high duties seem to have no
    effect upon the wages of labour. The same thing maybe said of the
    taxes upon tea and sugar, which, in England and Holland, have
    become luxuries of the lowest ranks of people; and of those upon
    chocolate, which, in Spain, is said to have become so.

    The different taxes which, in Great Britain, have, in the course
    of the present century, been imposed upon spiritous liquors, are
    not supposed to have had any effect upon the wages of labour. The
    rise in the price of porter, occasioned by an additional tax of
    three shillings upon the barrel of strong beer, has not raised
    the wages of common labour in London. These were about eighteen
    pence or twenty pence a-day before the tax, and they are not more

    The high price of such commodities does not necessarily diminish
    the ability of the inferior ranks of people to bring up families.
    Upon the sober and industrious poor, taxes upon such commodities
    act as sumptuary laws, and dispose them either to moderate, or to
    refrain altogether from the use of superfluities which they can
    no longer easily afford. Their ability to bring up families, in
    consequence of this forced frugality, instead of being
    diminished, is frequently, perhaps, increased by the tax. It is
    the sober and industrious poor who generally bring up the most
    numerous families, and who principally supply the demand for
    useful labour. All the poor, indeed, are not sober and
    industrious ; and the dissolute and disorderly might continue to
    indulge themselves in the use of such commodities, after this
    rise of price, in the same manner as before, without regarding
    the distress which this indulgence might bring upon their
    families. Such disorderly persons, however, seldom rear up
    numerous families, their children generally perishing from
    neglect, mismanagement, and the scantiness or unwholesomeness of
    their food. If by the strength of their constitution, they
    survive the hardships to which the bad conduct of their parents
    exposes them, yet the example of that bad conduct commonly
    corrupts their morals ; so that, instead of being useful to
    society by their industry, they become public nuisances by their
    vices and disorders. Through the advanced price of the luxuries
    of the poor, therefore, might increase somewhat the distress of
    such disorderly families, and thereby diminish somewhat their
    ability to bring up children, it would not probably diminish much
    the useful population of the country.

    Any rise in the average price of necessaries, unless it be
    compensated by a proportionable rise in the wages of labour, must
    necessarily diminish, more or less, the ability of the poor to
    bring up numerous families, and, consequently, to supply the
    demand for useful labour; whatever may be the state of that
    demand, whether increasing, stationary, or declining; or such as
    requires an increasing, stationary, or declining population.

    Taxes upon luxuries have no tendency to raise the price of any
    other commodities, except that of the commodities taxed. Taxes
    upon necessaries, by raising the wages of labour, necessarily
    tend to raise the price of all manufactures, and consequently to
    diminish the extent of their sale and consumption. Taxes upon
    luxuries are finally paid by the consumers of the commodities
    taxed, without any retribution. They fall indifferently upon
    every species of revenue, the wages of labour, the profits of
    stock, and the rent of land. Taxes upon necessaries, so far as
    they affect the labouring poor, are finally paid, partly by
    landlords, in the diminished rent of their lands, and partly by
    rich consumers, whether landlords or others, in the advanced
    price of manufactured goods; and always with a considerable
    overcharge. The advanced price of such manufactures as are real
    necessaries of life, and are destined for the consumption of the
    poor, of coarse woollens, for example, must be compensated to the
    poor by a farther advancement of their wages. The middling and
    superior ranks of people, if they understood their own interest,
    ought always to oppose all taxes upon the necessaries of life, as
    well as all taxes upon the wages of labour. The final payment of
    both the one and the other falls altogether upon themselves, and
    always with a considerable overcharge. They fall heaviest
    upon the landlords, who always pay in a double capacity ; in that
    of landlords, by the reduction, of their rent ; and in that of
    rich consumers, by the increase of their expense. The observation
    of Sir Matthew Decker, that certain taxes are, in the price of
    certain goods, sometimes repeated and accumulated four or five
    times, is perfectly just with regard to taxes upon the
    necessaries of life. In the price of leather, for example,
    you must pay not only for the tax upon the leather of your own
    shoes, but for a part of that upon those of the shoemaker and the
    tanner. You must pay, too, for the tax upon the salt, upon the
    soap, and upon the candles which those workmen consume while
    employed in your service ; and for the tax upon the leather,
    which the saltmaker, the soap-maker, and the candle-maker
    consume, while employed in their service.

    In Great Britain, the principal taxes upon the necessaries of
    life, are those upon the four commodities just now mentioned,
    salt, leather, soap, and candles.

    Salt is a very ancient and a very universal subject of taxation.
    It was taxed among the Romans, and it is so at present in, I
    believe, every part of Europe. The quantity annually consumed by
    any individual is so small, and may be purchased so gradually,
    that nobody, it seems to have been thought, could feel very
    sensibly even a pretty heavy tax upon it. It is in England taxed
    at three shillings and fourpence a bushel; about three times the
    original price of the commodity. In some other countries, the tax
    is still higher. Leather is a real necessary of life. The use of
    linen renders soap such. In countries where the winter nights
    are long, candles are a necessary instrument of trade.
    Leather and soap are in Great Britain taxed at three halfpence
    a-pound; candles at a penny; taxes which, upon the original price
    of leather, may amount to about eight or ten per cent. ; upon
    that of soap, to about twenty or five-and-twenty per cent. ; and
    upon that of candles to about fourteen or fifteen per cent.;
    taxes which, though lighter than that upon salt, are still very
    heavy. As all those four commodities are real necessaries of
    life, such heavy taxes upon them must increase somewhat the
    expense of the sober and industrious poor, and must consequently
    raise more or less the wages of their labour.

    In a country where the winters are so cold as in Great Britain,
    fuel is, during that season, in the strictest sense of the word,
    a necessary of life, not only for the purpose of dressing
    victuals, but for the comfortable subsistence of many different
    sorts of workmen who work within doors ; and coals are the
    cheapest of all fuel. The price of fuel has so important an
    influence upon that of labour, that all over Great Britain,
    manufactures have confined themselves principally to the coal
    contries; other parts of the country, on account of the high
    price of this necessary article, not being able to work so cheap.
    In some manufactures, besides, coal is a necessary instrument of
    trade ; as in those of glass, iron, and all other metals. If a
    bounty could in any case be reasonable, it might perhaps be so
    upon the transportation of coals from those parts of the country
    in which they abound, to those in which they are wanted.
    But the legislature, instead of a bounty, has imposed a tax of
    three shillings and threepence a-ton upon coals carried
    coastways; which, upon most sorts of coal, is more than sixty per
    cent. of the original price at the coal pit. Coals carried,
    either by land or by inland navigation, pay no duty. Where they
    are naturally cheap, they are consumed duty free ; where they are
    naturally dear, they are loaded with a heavy duty.

    Such taxes, though they raise the price of subsistence, and
    consequently the wages of labour, yet they afford a considerable
    revenue to government, which it might not be easy to find in any
    other way. There may, therefore, be good reasons for continuing
    them. The bounty upon the exportation of corn, so far us it
    tends, in the actual state of tillage, to raise the price of that
    necessary article, produces all the like bad effects ; and
    instead of affording any revenue, frequently occasions a very
    great expense to government. The high duties upon the importation
    of foreign corn, which, in years of moderate plenty, amount to a
    prohibition; and the absolute prohibition of the importation,
    either of live cattle, or of salt provisions, which takes place
    in the ordinary state of the law, and which, on account of the
    scarcity, is at present suspended for a limited time with regard
    to Ireland and the British plantations, have all had the bad
    effects of taxes upon the necessaries of life, and produce no
    revenue to government. Nothing seems necessary for the repeal of
    such regulations, but to convince the public of the futility of
    that system in consequence of which they have been established.

    Taxes upon the necessaries of life are much higher in many other
    countries than in Great Britain. Duties upon flour and meal when
    ground at the mill, and upon bread when baked at the oven, take
    place in many countries. In Holland the money-price of the:
    bread consumed in towns is supposed to be doubled by means of
    such taxes. In lieu of a part of them, the people who live in the
    country, pay every year so much a-head, according to the sort of
    bread they are supposed to consume. Those who consume wheaten
    bread pay three guilders fifteen stivers; about six shillings and
    ninepence halfpenny. Those, and some other taxes of the same
    kind, by raising the price of labour, are said to have ruined the
    greater part of the manufactures of Holland {Memoires concernant
    les Droits, etc. p. 210, 211.}. Similar taxes, though not quite
    so heavy, take place in the Milanese, in the states of Genoa, in
    the duchy of Modena, in the duchies of Parma, Placentia, and
    Guastalla, and the Ecclesiastical state. A French author {Le
    Reformateur} of some note, has proposed to reform the finances of
    his country, by substituting in the room of the greater part of
    other taxes, this most ruinous of all taxes. There is nothing so
    absurd, says Cicero, which has not sometimes been asserted by
    some philosophers.

    Taxes upon butcher's meat are still more common than those upon
    bread. It may indeed be doubted, whether butcher's meat is any
    where a necessary of life. Grain and other vegetables, with the
    help of milk, cheese, and butter, or oil, where butter is not to
    be had, it is known from experience, can, without any butcher's
    meat, afford the most plentiful, the most wholesome, the most
    nourishing, and the most invigorating diet. Decency nowhere
    requires that any man should eat butcher's meat, as it in most
    places requires that he should wear a linen shirt or a pair of
    leather shoes.

    Consumable commodities, whether necessaries or luxuries, may be
    taxed in two different ways. The consumer may either pay an
    annual sum on account of his using or consuming goods of a
    certain kind; or the goods may be taxed while they remain in the
    hands of the dealer, and before they are delivered to the
    consumer. The consumable goods which last a considerable time
    before they are consumed altogether, are most properly taxed in
    the one way ; those of which the consumption is either immediate
    or more speedy, in the other. The coach-tax and plate tax are
    examples of the former method of imposing ; the greater part of
    the other duties of excise and customs, of the latter.

    A coach may, with good management, last ten or twelve years. It
    might be taxed, once for all, before it comes out of the hands of
    the coach-maker. But it is certainly more convenient for the
    buyer to pay four pounds a-year for the privilege of keeping a
    coach, than to pay all at once forty or forty-eight pounds
    additional price to the coach-maker ; or a sum equivalent to what
    the tax is likely to cost him during the time he uses the same
    coach. A service of plate in the same manner, may last more
    than a century. It is certainly-easier for the consumer to
    pay five shillings a-year for every hundred ounces of plate, near
    one per cent. of the value, than to redeem this long annuity at
    five-and-twenty or thirty years purchase, which would enhance the
    price at least five-and-twenty or thirty per cent. The
    different taxes which affect houses, are certainly more
    conveniently paid by moderate annual payments, than by a heavy
    tax of equal value upon the first building or sale of the house.

    It was the well-known proposal of Sir Matthew Decker, that all
    commodities, even those of which the consumption is either
    immediate or speedy, should be taxed in this manner; the dealer
    advancing nothing, but the consumer paying a certain annual sum
    for the licence to consume certain goods. The object of his
    scheme was to promote all the different branches of foreign
    trade, particularly the carrying trade, by taking away all duties
    upon importation and exportation, and thereby enabling the
    merchant to employ his whole capital and credit in the purchase
    of goods and the freight of ships, no part of either being
    diverted towards the advancing of taxes, The project, however, of
    taxing, in this manner, goods of immediate or speedy consumption,
    seems liable to the four following very important objections.
    First, the tax would be more unequal, or not so well proportioned
    to the expense and consumption of the different contributors, as
    in the way in which it is commonly imposed. The taxes upon ale,
    wine, and spiritous liquors, which are advanced by the dealers,
    are finally paid by the different consumers, exactly in
    proportion to their respective consumption. But if the tax were
    to be paid by purchasing a licence to drink those liquors, the
    sober would, in proportion to his consumption, be taxed much more
    heavily than the drunken consumer. A family which exercised great
    hospitality, would be taxed much more lightly than one who
    entertained fewer guests. Secondly, this mode of taxation, by
    paying for an annual, half-yearly, or quarterly licence to
    consume certain goods, would diminish very much one of the
    principal conveniences of taxes upon goods of speedy consumption;
    the piece-meal payment. In the price of threepence halfpenny,
    which is at present paid for a pot of porter, the different taxes
    upon malt, hops, and beer, together with the extraordinary profit
    which the brewer charges for having advanced than, may perhaps
    amount to about three halfpence. If a workman can conveniently
    spare those three halfpence, he buys a pot of porter. If he
    cannot, he contents himself with a pint; and, as a penny saved is
    a penny got, he thus gains a farthing by his temperance. He pays
    the tax piece-meal, as he can afford to pay it, and when he can
    afford to pay it, and every act of payment is perfectly
    voluntary, and what he can avoid if he chuses to do so. Thirdly,
    such taxes would operate less as sumptuary laws. When the licence
    was once purchased, whether the purchaser drunk much or drunk
    little, his tax would be the same. Fourthly, if a workman were to
    pay all at once, by yearly, half-yearly, or quarlerly payments, a
    tax equal to what he at present pays, with little or no
    inconveniency, upon all the different pots and pints of porter
    which he drinks in any such period of time, the sum might
    frequently distress him very much. This mode of taxation,
    therefore, it seems evident, could never, without the most
    grievous oppression, produce a revenue nearly equal to what is
    derived from the present mode without any oppression. In several
    countries, however, commodities of an immediate or very speedy
    consumption are taxed in this manner. In Holland, people pay so
    much a-head for a licence to drink tea. I have already mentioned
    a tax upon bread, which, so far as it is consumed in farm houses
    and country villages, is there levied in the same manner.

    The duties of excise are imposed chiefly upon goods of home
    produce, destined for home consumption. They are imposed only
    upon a few sorts of goods of the most general use. There can
    never be any doubt, either concerning the goods which are subject
    to those duties, or concerning the particular duty which each
    species of goods is subject to. They fall almost altogether upon
    what I call luxuries, excepting always the four duties above
    mentioned, upon salt, soap, leather, candles, and perhaps that
    upon green glass.

    The duties of customs are much more ancient than those of excise.
    They seem to have been called customs, as denoting customary
    payments, which had been in use for time immemorial. They appear
    to have been originally considered as taxes upon the profits of
    merchants. During the barbarous times of feudal anarchy,
    merchants, like all the other inhabitants of burghs, were
    considered as little better than emancipated bondmen, whose
    persons were despised, and whose gains were envied. The great
    nobility, who had consented that the king should tallage the
    profits of their own tenants, were not unwilling that he should
    tallage likewise those of an order of men whom it was much less
    their interest to protect. In those ignorant times, it was
    not understood, that the profits of merchants are a subject not
    taxable directly ; or that the final payment of all such taxes
    must fall, with a considerable overcharge, upon the consumers.

    The gains of alien merchants were looked upon more unfavourably
    than those of English merchants. It was natural, therefore.
    that those of the former should be taxed more heavily than those
    of the latter. This distinction between the duties upon
    aliens and those upon English merchants, which was begun from
    ignorance, has been continued front the spirit of monopoly, or in
    order to give our own merchants an advantage, both in the home
    and in the foreign market.

    With this distinction, the ancient duties of customs were imposed
    equally upon all sorts of goods, necessaries as well its
    luxuries, goods exported as well as goods imported. Why should
    the dealers in one sort of goods, it seems to have been thought,
    be more favoured than those in another ? or why should the
    merchant exporter be more favoured than the merchant importer?

    The ancient customs were divided into three branches. The first,
    and, perhaps, the most ancient of all those duties, was that upon
    wool and leather. It seems to have been chiefly or altogether an
    exportation duty. When the woollen manufacture came to be
    established in England, lest the king should lose any part of his
    customs upon wool by the exportation of woollen cloths, a like
    duty was imposed upon them. The other two branches were,
    first, a duty upon wine, which being imposed at so much a-ton,
    was called a tonnage; and, secondly, a duty upon all other goods,
    which being imposed at so much a-pound of their supposed value,
    was called a poundage. In the forty-seventh year of Edward III.,
    a duty of sixpence in the pound was imposed upon all goods
    exported and imported, except wools, wool-felts, leather, and
    wines which were subject to particular duties. In the
    fourteenth of Richard II., this duty was raised to one shilling
    in the pound ; but, three years afterwards, it was again reduced
    to sixpence. It was raised to eightpence in the second year of
    Henry IV. ; and, in the fourth of the same prince, to one
    shilling. From this time to the ninth year of William III.,
    this duty continued at one shilling in the pound. The duties
    of tonnage and poundage were generally granted to the king by one
    and the same act of parliament, and were called the subsidy of
    tonnage and poundage. The subsidy of poundage having
    continued for so long a time at one shilling in the pound, or at
    five per cent., a subsidy came, in the language of the customs,
    to denote a general duty of this kind of five per cent. This
    subsidy, which is now called the old subsidy, still continues to
    be levied, according to the book of rates established by the
    twelfth of Charles II. The method of ascertnining, by a book
    of rates, the value of goods subject to this duty, is said to be
    older than the time of James I. The new subsidy, imposed by the
    ninth and tenth of William III., was an additional five per cent.
    upon the greater part of goods. The one-third and the two-third
    subsidy made up between them another five per cent. of which they
    were proportionable parts. The subsidy of 1747 made a fourth five
    per cent. upon the greater part of goods; and that of 1759, a
    fifth upon some particular sorts of goods. Besides those five
    subsidies, a great variety of other duties have occasionally been
    imposed upon particular sorts of goods, in order sometimes to
    relieve the exigencie's of the state, and sometimes to regulate
    the trade of the country, according to the principles of the
    mercantile system.

    That system has come gradually more and more into fashion. The
    old subsidy was imposed indifferently upon exportation, as well
    as importation. The four subsequent subsidies, as well as the
    other duties which have since been occasionally imposed upon
    particular sorts of goods, have, with a few exceptions, been laid
    altogether upon importation. The greater part of the ancient
    duties which had been imposed upon the exportation of the goods
    of home produce and manufacture, have either been lightened or
    taken away altogether. In most cases, they have been taken
    away. Bounties have even been given upon the exportation of some
    of them. Drawbacks, too, sometimes of the whole, and, in most
    cases, of a part of the duties which are paid upon the
    importation of foreign goods, have been granted upon their
    exportation. Only half the duties imposed by the old subsidy upon
    importation, are drawn back upon exportation; but the whole of
    those imposed by the latter subsidies and other imposts are, upon
    the greater parts of the goods, drawn back in the same manner.
    This growing favour of exportation, and discouragmnent of
    importation, have suffered only a few exceptions, which chiefly
    concern the materials of some manufactures. These our
    merchants and manufacturers are willing should come as cheap as
    possible to themselves, and as dear as possible to their rivals
    and competitors in other countries. Foreign materiais are,
    upon this account, sometimes allowed to be imported duty-free;
    spanish wool, for example, flax, and raw linen yarn. The
    exportation of the materials of home produce, and of those which
    are the particular produce of our colonies, has sometimes been
    prohibited, and sometimes subjected to higher duties. The
    exportation of English wool has been prohibited. That of beaver
    skins, of beaver wool, and of gum-senega, has been subjected to
    higher duties ; Great Britain, by the conquests of Canada and
    Senegal, having got almost the monopoly of those commodities.

    That the mercantile system has not been very favourable to the
    revenue of the great body of the people, to the annual produce of
    the land and labour of the country, I have endeavoured to show in
    the fourth book of this Inquiry. It seems not to have been more
    favourable to the revenue of the sovereign; so far, at least, as
    that revenue depends upon the duties of customs.

    In consequence of that system, the importation of several sorts
    of goods has been prohibited altogether. This prohibition
    has, in some cases, entirely prevented, and in others has very
    much diminished, the importation of those commodities, by
    reducing the importers to the necessity of smuggling. It has
    entirely prevented the importation of foreign wollens; and it has
    very much diminished that of foreign silks and velvets, In both
    cases, it has entirely annihilated the revenue of customs which
    might have been levied upon such importation.

    The high duties which have been imposed upon the importation of
    many different sorts of foreign goods in order to discourage
    their consumption in Great Britain, have, in many cases, served
    only to encourage smuggling, and, in all cases, have reduced the
    revenues of the customs below what more moderate duties would
    have afforded. The saying of Dr. Swift, that in the arithmetic of
    the customs, two and two, instead of making four, make sometimes
    only one, holds perfectly true with regard to such heavy duties,
    which never could have been imposed, had not the mercantile
    system taught us, in many cases, to employ taxation as an
    instrument, not of revenue, but of monopoly.

    The bounties which are sometimes given upon the exportation of
    home produce and manufactures, and the drawbacks which are paid
    upon the re-exportation of the greater part of foreign goods,
    have given occasion to many frauds, and to a species of
    smuggling, more destructive of the public revenue than any other.
    In order to obtain the bounty or drawback, the goods, it is well
    known, are sometimes shipped, and sent to sea, but soon
    afterwards clandestinely re-landed in some other part of the
    country. The defalcation of the revenue of customs occasioned by
    bounties and drawbacks, of which a great part are obtained
    fraudulently, is very great. The gross produce of the
    customs, in the year which ended on the 5th of January 1755,
    amounted to £5,068,000. The bounties which were paid out of
    this revenue, though in that year there was no bounty upon corn,
    amounted to £167,806. The drawbacks which were paid upon
    debentures and certificates, to £2,156,800. Bounties and
    drawbacks together amounted to £2,324,600. In consequence of
    these deductions, the revenue of the customs amounted only to
    £2,743,400 ; from which deducting £287,900 for the expense of
    management, in salaries and other incidents, the neat revenue of
    the customs for that year comes out to be £2,455,500. The expense
    of management, amounts, in this manner, to between five and six
    per cent. upon the gross revenue of the customs ; and to
    something more than ten per cent. upon what remains of that
    revenue, after deducting what is paid away in bounties and

    Heavy duties being imposed upon almost all goods imported, our
    merchant importers smuggle as much, and make entry of as little
    as they can. Our merchant exporters, on the contrary, make entry
    of more than they export ; sometimes out of vanity, and to pass
    for great dealers in goods which pay no duty gain a bounty back.
    Our exports, in consequence of these different frauds, appear
    upon the custom-house books greatly to overbalance our imports,
    to the unspeakable comfort of those politicians, who measure the
    national prosperity by what they call the balance of trade.

    All goods imported, unless particularly exempted, and such
    exemptions are not very numerous, are liable to some duties of
    customs. If any goods are imported, not mentioned in the book of
    rates, they are taxed at 4s:9¾d. for every twenty shillings
    value, according to the oath of the importer, that is, nearly at
    five subsidies, or five poundage duties. The book of rates is
    extremely comprehensive, and enumerates a great variety of
    articles, many of them little used, and, therefore, not well
    known. It is, upon this account, frequently uncertain under what
    article a particular sort of goods ought to be classed, and,
    consequently what duty they ought to pay. Mistakes with regard to
    this sometimes ruin the custom-house officer, and frequently
    occasion much trouble, expense, and vexation to the importer.
    In point of perspicuity, precision, and distinctness, therefore,
    the duties of customs are much inferior to those of excise.

    In order that the greater part of the members of any society
    should contribute to the public revenue, in proportion to their
    respective expense, it does not seem necessary. that every single
    article of that expense should be taxed. The revenue which is
    levied by the duties of excise is supposed to fall as equally
    upon the contributors as that which is levied by the duties of
    customs; and the duties of excise are imposed upon a few articles
    only of the most general used and consumption. It has been the
    opinion of many people, that, by proper management, the duties of
    customs might likewise, without any loss to the public revenue,
    and with great advantage to foreign trade, be confined to a few
    articles only.

    The foreign articles, of the most general use and consumption in
    Great Britain, seem at present to consist chiefly in foreign
    wines and brandies ; in some of the productions of America and
    the West Indies, sugar, rum, tobacco, cocoa-nuts, etc. and in
    some of those of the East Indies, tea, coffee, china-ware,
    spiceries of all kinds, several sorts of piece-goods, etc.
    These different articles afford, the greater part of the perhaps,
    at present, revenue which is drawn from the duties of customs.
    The taxes which at present subsist upon foreign manufactures, if
    you except those upon the few contained in the foregoing
    enumeration, have, the greater part of them, been imposed for the
    purpose, not of revenue, but of monopoly, or to give our own
    merchants an advantage in the home market. By removing all
    prohibitions, and by subjecting all foreign manufactures to such
    moderate taxes, as it was found from experience, afforded upon
    each article the greatest revenue to the public, our own workmen
    might still have a considerable advantage in the home market ;
    and many articles, some of which at present afford no revenue to
    government, and others a very inconsiderable one, might afford a
    very great one.

    High taxes, sometimes by diminishing the consumption of the taxed
    commodities, and sometimes by encouraging smuggling frequently
    afford a smaller revenue to government than what might be drawn
    from more moderate taxes.

    When the diminution of revenue is the effect of the diminutiun of
    consumption, there can be but one remedy, and that is the
    lowering of the tax.

    When the diminution of revenue is the effect of the encouragement
    given to smuggling, it may, perhaps, be remedied in two ways;
    either by diminishing the temptation to smuggle, or by increasing
    the difficulty of smuggling. The temptation to smuggle can be
    diminished only by the lowering of the tax ; and the difficulty
    of smuggling can be increased only by establishing that system of
    administration which is most proper for preventing it.

    The excise laws, it appears, I believe, from experience, obstruct
    and embarrass the operations of the smuggler much more
    effectually than those of the customs. By introducing into the
    customs a system of administration as similar to that of the
    excise as the nature of the different duties will admit, the
    difficulty of smuggling might be very much increased. This
    alteration, it has been supposed by many people, might very
    easily be brought about.

    The importer of commodities liable to any duties of customs, it
    has been said, might, at his option, be allowed either to carry
    them to his own private warehouse ; or to lodge them in a
    warehouse, provided either at his own expense or at that of the
    public, but under the key of the custom-house officer, and never
    to be opened but in his presence. If the merchant carried them to
    his own private warehouse, the duties to be immediately paid, and
    never afterwards to be drawn back ; and that warehouse to be at
    all times subject to the visit and examination of the
    custom-house officer, in order to ascertain how far the quantity
    contained in it corresponded with that for which the duty had
    been paid. If he carried them to the public warehouse, no duty to
    be paid till they were taken out for home comsumption. If taken
    out for exportation, to be duty-free; proper security being
    always given that they should be so exported. The dealers in
    those particular commodities, either by wholesale or retail, to
    be at all times subject to the visit and examination of the
    custom-house officer; and to be obliged to justify, by proper
    certificates, the payment of the duty upon the whole quantity
    contained in their shops or warehouses. What are called the
    excise duties upon rum imported, are at present levied in this
    manner ; and the same system of administration might, perhaps, be
    extended to all duties upon goods imported ; provided always that
    those duties were, like the duties of excise, confined to a few
    sorts of goods of the most general use and consumption. If they
    were extended to almost all sorts of goods, as at present, public
    warehouses of sufficient extent could not easily be provided; and
    goods of a very delicate nature, or of which the preservation
    required much care and attention, could not safely be trusted by
    the merchant in any warehouse but his own.

    If, by such a system of administration, smuggling to any
    considerable extent could be prevented, even under pretty high
    duties ; and if every duty was occasionally either heightened or
    lowered according as it was most likely, either the one way or
    the other, to afford the greatest revenue to the state; taxation
    being always employed as an instrument of revenue, and never of
    monopoly ; it seems not improbable that a revenue, at least equal
    to the present neat revenue of the customs, might be drawn from
    duties upon the importation of only a few sorts of goods of the
    most general use and consumption ; and that the duties of customs
    might thus be brought to the same degree of simplicity,
    certainty, and precision, as those of excise. What the revenue at
    present loses by drawbacks upon the re-exportation of foreign
    goods, which are afterwards re-landed and consumed at home,
    would, under this system, be saved altogether. If to this saving,
    which would alone be very considerable, were added the abolition
    of all bounties upon the exportation of home produce ; in all
    cases in which those bounties were not in reality drawbacks of
    some duties of excise which had before been advanced ; it cannot
    well be doubted, but that the neat revenue of customs might,
    after an alteration of this kind, be fully equal to what it had
    ever been before.

    If, by such a change of system, the public revenue suffered no
    loss, the trade and manufactures of the country would certainly
    gain a very considerable advantage. The trade in the commodities
    not taxed, by far the greatest number would be perfectly free,
    and might be carried on to and from all parts of the world with
    every possible advantage. Among those commodities would be
    comprehended all the necessaries of life, and all the materials
    of manufacture. So far as the free importation of the necessaries
    of life reduced their average money price in the home market, it
    would reduce the money price of labour, but without reducing in
    any respect its real recompence. The value of money is in
    proportion to the quantity of the necessaries of life which it
    will purchase. That of the necessaries of life is altogether
    independent of the quantity of money which can be had for them.
    The reduction in the money price of labour would necessarily be
    attended with a proportionable one in that of all home
    manufactures, which would thereby gain some advantage in all
    foreign markets. The price of some manufactures would be reduced,
    in a still greater proportion, by the free importation of the raw
    materials. If raw silk could be imported from China and Indostan,
    duty-free, the silk manufacturers in England could greatly
    undersell those of both France and Italy. There would be no
    occasion to prohibit the importation of foreign silks and
    velvets. The cheapness of their goods would secure to our own
    workmen, not only the possession of a home, but a very great
    command of the foreign market. Even the trade in the commodities
    taxed, would be carried on with much more advantage than at
    present. If those commodities were delivered out of the public
    warehouse for foreign exportation, being in this case exempted
    from all taxes, the trade in them would be perfectly free. The
    carrying trade, in all sorts of goods, would, under this system,
    enjoy every possible advantage. If these commodities were
    delivered out for home consumption, the importer not being
    obliged to advance the tax till he had an opportunity of selling
    his goods, either to some dealer, or to some consumer, he could
    always afford to sell them cheaper than if he had been obliged to
    advance it at the moment of importation. Under the same taxes,
    the foreign trade of consumption, even in the taxed commodities,
    might in this manner be carried on with much more advantage than
    it is at present.

    It was the object of the famous excise scheme of Sir Robert
    Walpole, to establish, with regard to wine and tobacco, a system
    not very unlike that which is here proposed. But though the bill
    which was then brought into Parliament, comprehended those two
    commodities only, it was generally supposed to be meant as an
    introduction to a more extensive scheme of the same kind.
    Faction, combined with the interest of smuggling merchants,
    raised so violent, though so unjust a clamour, against that bill,
    that the minister thought proper to drop it ; and, from a dread
    of exciting a clamour of the same kind, none of his successors
    have dared to resume the project.

    The duties upon foreign luxuries, imported for home consumption,
    though they sometimes fall upon the poor, fall principally upon
    people of middling or more than middling fortune. Such are, for
    example, the duties upon foreign wines, upon coffee, chocolate,
    tea, sugar, etc.

    The duties upon the cheaper luxuries of home produce, destined
    for home consumption, fall pretty equally upon people of all
    ranks, in proportion to their respective expense. The poor pay
    the duties upon malt, hops, beer, and ale, upon their own
    consumption ; the rich, upon both their own consumption and that
    of their servants.

    The whole consumption of the inferior ranks of people, or of
    those below the middling rank, it must be observed, is, in every
    country, much greater, not only in quantity, but in value, than
    that of the middling, and of those above the middling rank. The
    whole expense of the inferior is much greater titan that of the
    superior ranks. In the first place, almost the whole capital of
    every country is annually distributed among the inferior ranks of
    people, as the wages of productive labour. Secondly, a great
    part of the revenue, arising from both the rent of land and the
    profits of stock, is annually distributed among the same rank, in
    the wages and maintenance of menial servants, and other
    unproductive labourers. Thirdly, some part of the profits of
    stock belongs to the same rank, as a revenue arising from the
    employment of their small capitals. The amount of the profits
    annually made by small shopkeepers, tradesmen, and retailers of
    all kinds, is everywhere very considerable, and makes a very
    considerable portion of the annual produce. Fourthly and lastly,
    some part even of the rent of land belongs to the same rank ; a
    considerable part to those who are somewhat below the middling
    rank, and a small part even to the lowest rank ; common labourers
    sometimes possessing in property an acre or two of land. Though
    the expense of those inferior ranks of people, therefore, taking
    them individually, is very small, yet the whole mass of it,
    taking them collectively, amounts always to by much the largest
    portion of the whole expense of the society ; what remains of the
    annual produce of the land and labour of the country, for the
    consumption of the superior ranks, being always much less, not
    only in quantity, but in value. The taxes upon expense,
    therefore, which fall chiefly upon that of the superior ranks of
    people, upon the smaller portion of the annual produce, are
    likely to be much less productive than either those which fall
    indifferently upon the expense of all ranks, or even those which
    fall chiefly upon that of the inferior ranks, than either those
    which fall indifferently upon the whole annual produce, or those
    which fall chiefly upon the larger portion of it. The excise upon
    the materials and manufacture of home-made fermented and
    spirituous liquors, is, accordingly, of all the different taxes
    upon expense, by far the most productive ; and this branch of the
    excise falls very much, perhaps principally, upon the expense of
    the common people. In the year which ended on the 5th of July
    1775, the gross produce of this branch of the excise amounted to

    It must always be remembered, however, that it is the luxuries,
    and not the necssary expense of the inferior ranks of people,
    that ought ever to be taxed. The final payment of any tax upon
    their necessary expense, would fall altogether upon the superior
    ranks of people; upon the smaller portion of the annual produce,
    and not upon the greater. Such a tax must, in all cases, either
    raise the wages of labour, or lessen the demand for it. It could
    not raise the wages of labour, without throwing the final payment
    of the tax upon the superior ranks of people. It could not lessen
    the demand for labour, without lessening the annual produce of
    the land and labour of the country, the fund upon which all taxes
    must be finally paid. Whatever might be the state to which a tax
    of this kind reduced the demand for labour, it must always raise
    wages higher than they otherwise would be in that state ; and the
    final payment of this enhancement of wages must, in all cases,
    fall upon the superior ranks of people.

    Fermented liquors brewed, and spiritous liquors distilled, not
    for sale, but for private use, are not in Great Britain liable to
    any duties of excise. This exemption, of which the object is to
    save private families from the odious visit and examination of
    the tax-gatherer, occasions the burden of those duties to fall
    frequently much lighter upon the rich than upon the poor. It is
    not, indeed, very common to distil for private use, though it is
    done sometimes. But in the country, many middling and almost all
    rich and great families, brew their own beer. Their strong beer,
    therefore, costs them eight shillings a-barrel less than it costs
    the common brewer, who must have his profit upon the tax, as well
    as upon all the other expense which he advances. Such families,
    therefore, must drink their beer at least nine or ten shillings
    a-barrel cheaper than any liquor of the same quality can be drank
    by the common people, to whom it is everywhere more convenient to
    buy their beer, by little and little, from the brewery or the
    ale-house. Malt, in the same manner, that is made for the use of
    a private family, is not liable to the visit or examination of
    the tax-gatherer but, in this case the family must compound at
    seven shillings and sixpence a-head for the tax. Seven shillings
    and sixpence are equal to the excise upon ten bushels of malt; a
    quantity fully equal to what all the different members of any
    sober family, men, women, and children, are, at an average,
    likely to consume. But in rich and great families, where country
    hospitality is much practised, the malt liqours consumed by the
    members of the family make but a small part of the consmnption of
    the house. Either on account of this composition, however, or for
    other reasons, it is not near so common to malt as to brew for
    private use. It is difficult to imagine any equitable reason, why
    those who either brew or distil for private use should not be
    subject to a composition of the same kind.

    A greater revenue than what is at present drawn from all the
    heavy taxes upon malt, beer, and ale, might be raised, it has
    frequently been said, by a much lighter tax upon malt; the
    opportunities of defrauding the revenue being much greater in a
    brewery than in a malt-house ; and those who brew for private use
    being exempted from all duties or composition for duties, which
    is not the case with those who malt for private use.

    In the porter brewery of London, a quarter of malt is commonly
    brewed into more than two barrels and a-half, sometimes into
    three barrels of porter. The different taxes upon malt amount to
    six shillings a-quarter ; those upon strong ale and beer to eight
    shillings a-barrel. In the porter brewery, therefore, the
    different taxes upon malt, beer, and ale, amount to between
    twenty-six and thirty shillings upon the produce of a quarter of
    malt. In the country brewery for common country sale, a quarter
    of malt is seldom brewed into less than two barrels of strong,
    and one barrel of small beer ; frequently into two barrels and
    a-half of strong beer. The different taxes upon small beer amount
    to one shilling and fourpence a-barrel. In the country brewery,
    therefore, the different taxes upon malt, beer, and ale, seldom
    amount to less than twenty-three shillings and fourpence,
    frequently to twenty-six shillings, upon the produce of a quarter
    of malt. Taking the whole kingdom at an average, therefore, the
    whole amount of the duties upon malt, beer, and ale, cannot be
    estimated at less than twenty-four or twenty-five shillings upon
    the produce of a quarter of malt. But by taking off all the
    different duties upon beer and ale, and by trebling the malt tax,
    or by raising it from six to eighteen shilling's upon the quarter
    of malt, a greater revenue, it is said, might be raised by this
    single tax, than what is at present drawn from all those heavier

    In 1772, the old malt tax produced......... £722,023: 11 : 11
    The additional....£356,776: 7 : 9¾
    In 1775, the old tax protluced....... ...... £561,627: 3 : 7½
    The additonal... £278,650: 15 : 3¾
    In l774, the old tax produced ............ £624,614: 17 : 5¾
    The additional....£310,745: 2 : 8½
    In 1775, the old tax produced ....... .....£657,357: 0 : 8¼
    The additional....£323,785: 12 : 6¼
    £5,855,580: 12 : 0¾
    Average of these four years .............. £958,895: 3 : 0

    In 1772, the country excise produced.......£1,243,120: 5 : 3
    The London brewery 408,260: 7 : 2¾
    In 1773, the country excise................£1,245,808: 3 : 3
    The London brewery 405,406: 17 : 10½
    In 1774, the country excise................£1,246,373: 14 : 5½
    The London brewery 320,601: 18 : 0¼
    In 1775, the country excise................£1,214,583: 6 : 1¼
    The London brewery 463,670: 7 : 0¼
    4)£6,547,832: 19 : 2¼
    Average of these four years ..............£1,636,958: 4 : 9½
    To which adding the average malt tax........ 958,895: 3 : 0¼

    The whole amount of those different
    taxes comes out to be........£2,595,835: 7 : 10

    But, by trebling the malt tax,
    or by raising it from six to
    eighteen shillings upon the quarter
    of malt, that single tax would produce.....£2,876,685: 9 : 0
    A sum which exceeds the
    foregoing by.... 280,832: 1 : 3

    Under the old malt tax, indeed, is comprehended a tax of four
    shillings upon the hogshead of cyder, and another of ten
    shillings upon the barrel of mum. In 1774, the tax upon cyder
    produced only £3,083:6:8. It probably fell somewhat short of its
    usual amount ; all the different taxes upon cyder, having, that
    year, produced less than ordinary. The tax upon mum, though much
    heavier, is still less productive, on account of the smaller
    consumption of that liquor. But to balance whatever may be the
    ordinary amount of those two taxes, there is comprehended under
    what is called the country excise, first, the old excise of six
    shillings and eightpence upon the hogshead of cyder; secondly, a
    like tax of six shillings and eightpence upon the hogshead of
    verjuice; thirdly, another of eight shillings and ninepence upon
    the hogshead of vinegar ; and, lastly, a fourth tax of
    elevenpence upon the gallon of mead or metheglin. The produce of
    those different taxes will probably much more than counterbalance
    that of the duties imposed, by what is called the annual malt
    tax, upon cyder and mum.

    Malt is consumed, not only in the brewery of beer and ale, but in
    the manufacture of low wines and spirits. If the malt tax were to
    be raised to eighteen shillings upon the quarter, it might be
    necessary to make some abatement in the different excises which
    are imposed upon those particular sorts of low wines and spirits,
    of which malt makes any part of the materials. In what are called
    malt spirits, it makes commonly but a third part of the
    materials; the other two-thirds being either raw barley , or
    one-third barley and one-third wheat. In the distillery of malt
    spirits, both the opportunity and the temptation to smuggle are
    much greater than either in a brewery or in a malt-house ; the
    opportunity, on account of the smaller bulk and greater value of
    the commodity, and the temptation, on account of the superior
    height of the duties, which amounted to 3s. 10 2/3d. upon the
    gallon of spirits.{Though the duties directly imposed upon proof
    spirits amount only to 2s. 6d per gallon, these, added to the
    duties upon the low wines, from which they are distilled, amount
    to 3s 10 2/3d. Both low wines and proof spirits are, to prevent
    frauds, now rated according to what they gauge in the wash.}
    By increasing the duties upon malt, and reducing those upon
    the distillery, both the opportunities and the temptation to
    smuggle would be diminished, which might occasion a still further
    augmentation of revenue.

    It has for some time past been the policy of Great Britain to
    discourage the consumption of spiritous liquors, on account of
    their supposed tendency to ruin the health and to corrupt the
    morals of the common people. According to this policy, the
    abatement of the taxes upon the distillery ought not to be so
    great as to reduce, in any respect, the price of those liquors.
    Spiritous liquors might remain as dear as ever; while, at the
    same time, the wholesome and invigorating liquors of beer and ale
    might be considerably reduced in their price. The people might
    thus be in part relieved from one of the burdens of which they at
    present complain the most; while, at the same time, the revenue
    might be considerably augmented.

    The objections of Dr. Davenant to this alteration in the present
    system of excise duties, seem to be without foundation. Those
    objections are, that the tax, instead of dividing itself, as at
    present, pretty equally upon the profit of the maltster, upon
    that of the brewer and upon that of the retailer, would so far as
    it affected profit, fall altogether upon that of the maltster ;
    that the maltster could not so easily get back the amount of the
    tax in the advanced price of his malt, as the brewer and retailer
    in the advanced price of their liquor; and that so heavy a tax
    upon malt might reduce the rent and profit of barley land.

    No tax can ever reduce, for any considerable time, the rate of
    profit in any particular trade, which must always keep its level
    with other trades in the neighbourhood. The present duties upon
    malt, beer, and ale, do not affect the profits of the dealers in
    those commodities, who all get back the tax with an additional
    profit, in the enhanced price of their goods. A tax, indeed, may
    render the goods upon which it is imposed so dear, as to diminish
    the consumption of them. But the consumption of malt is in malt
    liquors; and a tax of eighteen shillings upon the quarter of malt
    could not well render those liquors dearer than the different
    taxes, amounting to twenty-four or twenty-five shillings, do at
    present. Those liquors, on the contrary, would probably
    become cheaper, and the consumption of them would be more likely
    to increase than to diminish.

    It is not very easy to understand why it should be more difficult
    for the maltster to get back eighteen shillings in the advanced
    price of his malt, than it is at present for the brewer to get
    back twenty-four or twenty-five, sometimes thirty shillings, in
    that of his liquor. The maltster, indeed, instead of a tax of six
    shillings, would be obliged to advance one of eighteen shilling
    upon every quarter of malt. But the brewer is at present obliged
    to advance a tax of twenty-four or twentyfive, sometimes thirty
    shillings, upon every quarter of malt which he brews. It
    could not be more inconvenient for the maltster to advance a
    lighter tax, than it is at present for the brewer to advance a
    heavier one. The maltster does not always keep in his granaries a
    stock of malt, which it will require a longer time to dispose of
    than the stock of beer and ale which the brewer frequently keeps
    in his cellars. The former, therefore, may frequently get the
    returns of his money as soon as the latter. But whatever
    inconveniency might arise to the maltster from being obliged to
    advance a heavier tax, it could easily be remedied, by granting
    him a few months longer credit than is at present commonly given
    to the brewer.

    Nothing could reduce the rent and profit of barley land, which
    did not reduce the demand for barley. But a change of system,
    which reduced the duties upon a quarter of malt brewed into beer
    and ale, from twentyfour and twenty-five shillings to eighteen
    shillings, would be more likely to increase than diminish that
    demand. The rent and profit of barley land, besides, must always
    be nearly equal to those of other equally fertile and equally
    well cultivated land. If they were less, some part of the
    barley land would soon be turned to some other purpose; and if
    they were greater, more land would soon be turned to the raising
    of barley. When the ordinary price of any particular produce of
    land is at what may be called a monopoly price, a tax upon it
    necessarily reduces the rent and profit of the land which grows
    it. A tax upon the produce of those precious vineyards, of which
    the wine falls so much short of the effectual demand, that its
    price is always above the natural proportion to that of the
    produce of other equally fertile and equally well cultivated
    land, would necessarily reduce the rent and profit of those
    vineyards. The price of the wines being already the highest that
    could be got for the quantity commonly sent to market, it could
    not be raised higher without diminishing that quantity ; and the
    quantity could not be diminished without still greater loss,
    because the lands could not be turned to any other equally
    valuable produce. The whole weight of the tax, therefore, would
    fall upon the rent and profit; properly upon the rent of the
    vineyard. When it has been proposed to lay any new tax upon
    sugar, our sugar planters have frequently complained that the
    whole weight of such taxes fell not upon the consumer, but upon
    the producer; they never having been able to raise the price of
    their sugar after the tax higher than it was before. The price
    had, it seems, before the tax, been a monopoly price ; and the
    arguments adduced to show that sugar was an improper subject of
    taxation, demonstrated perhaps that it was a proper one ; the
    gains of monopolists, whenever they can be come at, being
    certainly of all subjects the most proper. But the ordinary price
    of barley has never been a monopoly price ; and the rent and
    profit of barley land have never been above their natural
    proportion to those of other equally fertile and equally well
    cultivated land. The different taxes which have been imposed upon
    malt, beer, and ale, have never lowered the price of barley ;
    have never reduced the rent and profit of barley land. The price
    of malt to the brewer has constantly risen in proportion to the
    taxes imposed upon it ; and those taxes, together with the
    different duties upon beer and ale, have constantly either raised
    the price, or, what comes to the same thing, reduced the quality
    of those commodities to the consumer. The final payment of those
    taxes has fallen constantly upon the consumer, and not upon the

    The only people likely to suffer by the change of system here
    proposed, are those who brew for their own private use. But
    the exemption, which this superior rank of people at present
    enjoy, from very heavy taxes which are paid by the poor labourer
    and artificer, is surely most unjust and unequal, and ought to be
    taken away, even though this change was never to take place. It
    has probably been the interest of this superior order of people,
    however, which has hitnerto prevented a change of system that
    could not well fail both to increase the revenue and to relieve
    the people.

    Besides such duties as those of custom and excise above
    mentioned, there are several others which affect the price of
    goods more unequally and more indirectly. Of this kind are the
    duties, which, in French, are called peages, which in old Saxon
    times were called the duties of passage, and which seem to have
    been originally established for the same purpose as our turnpike
    tolls, or the tolls upon our canals and navigable rivers, for the
    maintenance of the road or of the navigation. Those duties, when
    applied to such purposes, are most properly imposed according to
    the bulk or weight of the goods. As they were originally local
    and provincial duties, applicable to local and provincial
    purposes, the administration of them was, in most cases,
    entrusted to the particular town, parish, or lordship, in which
    they were levied; such communities being, in some way or other,
    supposed to be accountable for the application. The
    sovereign, who is altogether unaccountable, has in many countries
    assumed to himself the administration of those duties; and though
    he has in most cases enhanced very much the duty, he has in many
    entirely neglected the application. If the turnpike tolls of
    Great Britain should ever become one of the resources of
    government, we may learn, by the example of many other nations,
    what would probably be the consequence. Such tolls, no doubt,
    are finally paid by the consumer; but the consumer is not taxed
    in proportion to his expense, when he pays, not according to the
    value, but according to the bulk or weight of what he consumes.
    When such duties are imposed, not according to the bulk or
    weight, but according to the supposed value of the goods, they
    become properly a sort of inland customs or excise, which
    obstruct very much the most important of all branches of
    commerce, the interior commerce of the country.

    In some small states, duties similar to those passage duties are
    imposed upon goods carried across the territory, either by land
    or by water, from one foreign country to another. These are in
    some countries called transit-duties. Some of the little
    Italian states which are situated upon the Po, and the rivers
    which run into it, derive some revenue from duties of this kind,
    which are paid altogether by foreigners, and which, perhaps, are
    the only duties that one state can impose upon the subjects of
    another, without obstruction in any respect, the industry or
    commerce of its own. The most important transit-duty in the
    world, is that levied by the king of Denmark upon all merchant
    ships which pass through the Sound.

    Such taxes upon luxuries, as the greater part of the duties of
    customs and excise, though they all fall indifferently upon every
    different species of revenue, and are paid finally, or without
    any retribution, by whoever consumes the commodities upon which
    they are imposed ; yet they do not always fall equally or
    proportionally upon the revenue of every individual. As every
    man's humour regulates the degree of his consumption, every man
    contributes rather according to his humour, than proportion to
    his revenue: the profuse contribute more, the parsimonious less,
    than their proper proportion. During the minority of a man of
    great fortune, he contributes commonly very little, by his
    consumption, towards the support of that state from whose
    protection he derives a great revenue. Those who live in another
    country, contribute nothing by their consumption towards the
    support of the government of that country, in which is situated
    the source of their revenue. If in this latter country there
    should be no land tax, nor any considerable duty upon the
    transference either of moveable or immoveable property, as is the
    case in Ireland, such absentees may derive a great revenue from
    the protection of a government, to the support of which they do
    not contribute a single shilling. This inequality is likely to be
    greatest in a country of which the government is, in some
    respects, subordinate and dependant upon that of some other. The
    people who possess the most extensive property in the dependant,
    will, in this case, generally chuse to live in the governing
    country. Ireland is precisely in this situation; and we
    cannot therefore wonder, that the proposal of a tax upon
    absentees should be so very popular in that country. It might,
    perhaps, be a little difficult to ascertain either what sort, or
    what degree of absence, would subject a man to be taxed as an
    absentee, or at what precise time the tax should either begin or
    end. If you except, however, this very peculiar situation, any
    inequality in the contribution of individuals which can arise
    from such taxes, is much more than compensated by the very
    circumstance which occasions that inequality; the circumstance
    that every man's contribution is altogether voluntary ; it being
    altogether in his power, either to consume, or not to consume,
    the commodity taxed. Where such taxes, therefore, are
    properly assessed, and upon proper commodities, they are paid
    with less grumbling than any other. When they are advanced by the
    merchant or manufacturer, the consumer, who finally pays them,
    soon comes to confound them with the price of the commodities,
    and almost forgets that he pays any tax.

    Such taxes are, or may be, perfectly certain; or may be assessed,
    so as to leave no doubt concerning either what ought to be paid,
    or when it ought to be paid; concerning either the quantity or
    the time of payment. What ever uncertainty there may sometimes
    be, either in the duties of customs in Great Britain, or in other
    duties of the same kind in other countries, it cannot arise from
    the nature of those duties, but from the inaccurate or unskilful
    manner in which the law that imposes them is expressed.

    Taxes upon luxuries generally are, and always may be, paid
    piece-meal, or in proportion as the contributors have occasion to
    purchase the goods upon which they are imposed. In the time and
    mode of payment, they are, or may be, of all taxes the most
    convenient. Upon the whole, such taxes, therefore, are perhaps as
    agreeable to the three first of the four general maxims
    concerning taxation, as any other. They offend in every
    respect against the fourth.

    Such taxes, in proportion to what they bring into the public
    treasury of the state, always take out, or keep out, of the
    pockets of the people, more than almost any other taxes. They
    seem to do this in all the four different ways in which it is
    possible to do it.

    First, the levying of such taxes, even when imposed in the most
    judicious manner, requires a great number of custom-house and
    excise officers, whose salaries and perquisites are a real tax
    upon the people, which brings nothing into the treasury of the
    state. This expense, however, it must be acknowledged, is more
    moderate in Great Britain than in most other countries. In
    the year which ended on the 5th of July, 1775, the gross produce
    of the different duties, under the management of the
    commissioners of excise in England, amounted to £5,507,308:18:8¼,
    which was levied at an expense of little more than five and
    a-half per cent. From this gross produce, however, there
    must be deducted what was paid away in bounties and drawbacks
    upon the exportation of exciseable goods, which will reduce the
    neat produce below five millions. {The neat produce of that year,
    after deducting all expenses and allowances, amounted to
    £4,975,652:19:6.} The levying of the salt duty, and excise
    duty, but under a different management, is much more expensive.
    The neat revenue of the customs does not amount to two millions
    and a-half, which is levied at an expense of more than ten per
    cent., in the salaries of officers and other incidents. But the
    perquisites of custom-house officers are everywhere much greater
    than their salaries ; at some ports more than double or triple
    those salaries. If the salaries of officers, and other
    incidents, therefore, amount to more than ten per cent. upon the
    neat revenue of the customs, the whole expense of levying that
    revenue may amount, in salaries and perquisites together, to more
    than twenty or thirty per cent. The officers of excise receive
    few or no perquisites ; and the administration of that branch of
    the revenue being of more recent establishment, is in general
    less corrupted than that of the customs, into which length of
    time has introduced and authorised many abuses. By charging upon
    malt the whole revenue which is at present levied by the
    different duties upon malt and malt liquors, a saving, it is
    supposed, of more than £50,000, might be made in the annual
    expense of the excise. By confining the duties of customs to a
    few sorts of goods, and by levying those duties according to the
    excise laws, a much greater saving might probably be made in the
    annual expense of the customs.

    Secondly, such taxes necessarily occasion some obstruction or
    discouragement to certain branches of industry. As they always
    raise the price of the commodity taxed, they so far discourage
    its consumption, and consequently its production. If it is a
    commodity of home growth or manufacture, less labour comes to be
    employed in raising and producing it. If it is a foreign
    commodity of which the tax increases in this manner the price,
    the commodities of the same kind which are made at home may
    thereby, indeed, gain some advantage in the home market, and a
    greater quantity of domestic industry may thereby be turned
    toward preparing them. But though this rise of price in a foreign
    cotnmodity, may encourage domestic industry in one particular
    branch, it necessarily discourages that industry in almost every
    other. The dearer the Birmingham manufacturer buys his foreign
    wine, the cheaper he necessarily sells that part of his hardware
    with which, or, what comes to the same thing, with the price of
    which, he buys it. That part of his hardware, therefore, becomes
    of less value to him, and he has less encouragement to work at
    it. The dearer the consumers in one country pay for the surplus
    produce of another, the cheaper they necessarily sell that part
    of their own surplus produce with which, or, what comes to the
    same thing, with the price of which, they buy it. That part of
    their own surplus produce becomes of less value to them, and they
    have less encouragement to increase its quantity. All taxes
    upon consumable commodities, therefore, tend to reduce the
    quantity of productive labour below what it otherwise would be,
    either in preparing the commodities taxed, if they are home
    commodities, or in preparing those with which they are purchased,
    if they are foreign commodities. Such taxes, too, always alter,
    more or less, the natural direction of national industry, and
    turn it into a channel always different from, and generally less
    advantageous, than that in which it would have run of its own

    Thirdly, the hope of evading such taxes by smuggling, gives
    frequent occasion to forfeitures and other penalties, which
    entirely ruin the smuggler ; a person who, though no doubt highly
    blameable for violating the laws of his country, is frequently
    incapable of violating those of natural justice, and would have
    been, in every respect. an excellent citizen, had not the laws of
    his country made that a crime which nature never meant to be so.
    In those corrupted governments, where there is at least a general
    suspicion of much unnecessary expense, and great misapplication
    of the public revenue, the laws which guard it are little
    respected. Not many people are scrupulous about smuggling, when,
    without perjury, they can find an easy and safe opportunity of
    doing so. To pretend to have any scruple about buying smuggled
    goods, though a manifest encouragement to the violation of the
    revenue laws, and to the perjury which almost always attends it,
    would, in most countries. be regarded as one of those pedantic
    pieces of hypocrisy which, instead of gaining credit with
    anybody, serve only to expose the person who affects to practise
    them to the suspicion of buing a greater knave than most of his
    neighbours. By this indulgence of the public, the smuggler is
    often encouraged to continue a trade, which he is thus taught to
    consider as in some measure innocent; and when the severity of
    the revenue laws is ready to fall upon him, he is frequently
    disposed to defend with violence, what he has been accustomed to
    regard as his just property. From being at first, perhaps, rather
    imprudent than criminal, he at last too often becomes one of the
    hardiest and most determined violators of the laws of society. By
    the ruin of the smuggler, his capital, which had before been
    employed in maintaining productive labour, is absorbed either in
    the revenue of the state, or in that of the revenue officer; and
    is employed in maintaining unproductive, to the diminution of the
    general capital of the society, and of the useful industry which
    it might otherwise have maintained.

    Fourthly, such taxes, by subjecting at least the dealers in the
    taxed commodities, to the frequent visits and odious examination
    of the tax-gatherers, expose them sometimes, no doubt, to some
    degree of oppression, and always to much trouble and vexation;
    and though vexation, as has already been said, is not strictly
    speaking expense, it is certainly equivalent to the expense at
    which every man would be willing to redeem himself from it. The
    laws of excise, though more effectual for the purpose for which
    they were instituted, are, in this respect, more vexatious than
    those of the customs. When a merchant has imported goods subject
    to certain duties of customs; when he has paid those duties, and
    lodged the goods in his warehouse ; he is not, in most cases,
    liable to any further trouble or vexation from the custom-house
    officer. It is otherwise with goods subject to duties of excise.
    The dealers have no respite from the continual visits and
    examination of the excise officers. The duties of excise are,
    upon this account, more unpopular than those of the customs; and
    so are the officers who levy them. Those officers, it is
    pretended, though in general, perhaps, they do their duty fully
    as well as those of the customs ; yet, as that duty obliges them
    to be frequently very troublesome to some of their neighbours,
    commonly contract a certain hardness of character, which the
    others frequently have not. This observation, however, may very
    probably be the mere suggestion of fraudulent dealers, whose
    smuggling is either prevented or detected by their diligence.

    The inconveniencies, however, which are, perhaps, in some degree
    inseparable from taxes upon consumable communities, fall as light
    upon the people of Great Britain as upon those of any other
    country of which the government is nearly as expensive. Our
    state is not perfect, and might be mended; but it is as good, or
    better, than that of most of our neighbours.

    In consequence of the notion, that duties upon consumable goods
    were taxes upon the profits of merchants, those duties have, in
    some countries, been repeated upon every successive sale of the
    goods. If the profits of the merchant-importer or
    merchant-manufacturer were taxed, equality seemed to require that
    those of all the middle buyers, who intervened between either of
    them and the consumer, should likewise be taxed. The famous
    alcavala of Spain seems to have been established upon this
    principle. It was at first a tax of ten per cent. afterwards
    of fourteen per cent. and it is at present only six per cent.
    upon the sale of every sort of property whether moveable or
    immoveable ; and it is repeated every time the property is
    sold.{Memoires concernant les Droits, etc. tom. i, p. 15} The
    levying of this tax requires a multitude of revenue officers,
    sufficient to guard the transportation of goods, not only from
    one province to another, but from one shop to another. It
    subjects, not only the dealers in some sorts of goods, but those
    in all sorts, every farmer, every manufacturer, every merchant
    and shopkeeper, to the continual visit and examination of the
    tax-gatherers. Through the greater part of the country in
    which a tax of this kind is established, nothing can be produced
    for distant sale. The produce of every part of the country must
    be proportioned to the consumption of the neighbourhood. It is to
    the alcavala, accordingly, that Ustaritz imputes the ruin of the
    manufactures of Spain. He might have imputed to it, likewise, the
    declension of agriculture, it being imposed not only upon
    manufactures, but upon the rude produce of the land.

    In the kingdom of Naples, there is a similar tax of three per
    cent. upon the value of all contracts, and consequently upon that
    of all contracts of sale. It is both lighter than the Spanish
    tax, and the greater part of towns and parishes are allowed to
    pay a composition in lieu of it. They levy this composition in
    what manner they please, generally in a way that gives no
    interruption to the interior commerce of the place. The
    Neapolitan tax, therefore, is not near so ruinous as the Spanish

    The uniform system of taxation, which, with a few exception of no
    great consequence, takes place in all the different parts of the
    united kingdom of Great Britain, leaves the interior commerce of
    the country, the inland and coasting trade, almost entirely free.
    The inland trade is almost perfectly free ; and the greater part
    of goods may be carried from one end of the kingdom to the other,
    without requiring any permit or let-pass, without being subject
    to question, visit or examination, from the revenue officers.
    There are a few exceptions, but they are such as can give no
    interruption to any important branch of inland commerce of the
    country. Goods carried coastwise, indeed, require certificates or
    coast-cockets. If you except coals, however, the rest are almost
    all duty-free. This freedom of interior commerce, the effect of
    the uniformity of the system of taxation, is perhaps one of the
    principal causes of the prosperity of Great Britain ; every great
    country being necessarily the best and most extensive market for
    the greater part of the productions of its own industry. If the
    same freedom in consequence of the same uniformity, could be
    extended to Ireland and the plantations, both the grandeur of the
    state, and the prosperity of every part of the empire, would
    probably be still greater than at present.

    In France, the different revenue laws which take place in the
    different provinces, require a multitude of revenue officers to
    surround, not only the frontiers of the kingdom, but those of
    almost each particular province, in order either to prevent the
    importation of certain goods, or to subject it to the payment of
    certain duties, to the no small interruption of the interior
    commerce of the country. Some provinces are allowed to commpound
    for the gabelle, or salt tax ; others are exempted from it
    altogether. Some provinces are exempted from the exclusive sale
    of tobacco, which the farmers-general enjoy through the greater
    part of the kingdom. The aides, which correspond to the excise in
    England, are very different in different provinces. Some
    provinces are exempted from them, and pay a composition or
    equivalent. In those in which they take place, and are in farm,
    there are many local duties which do not extend beyond a
    particular town or district. The traites, which correspond to our
    customs, divide the kingdom into three great parts; first, the
    provinces subject to the tariff of 1664, which are called the
    provinces of the five great farms, and under which are
    comprehended Picardy, Normandy, and the greater part of the
    interior provinces of the kingdom ; secondly, the provinces
    subject to the tariff of 1667, which are called the provinces
    reckoned foreign, and under which are comprehended the greater
    part of the frontier provinces; and, thirdly, those provinces
    which are said to be treated as foreign, or which, because they
    are allowed a free commerce with foreign countries, are, in their
    commerce with the other provinces of France, subjected to the
    same duties as other foreign countries. These are Alsace, the
    three bishoprics of Mentz, Toul, and Verdun, and the three cities
    of Dunkirk, Bayonne, and Marseilles. Both in the provinces of the
    five great farms (called so on account of an ancient division of
    the duties of customs into five great branches, each of which was
    originally the subject of a particular farm, though they are now
    all united into one), and in those which are said to be reckoned
    foreign, there are many local duties which do not extend beyond a
    particular town or district. There are some such even in the
    provinces which are said to be treated as foreign, particularly
    in the city of Marseilles. It is unnecessary to observe how much
    both the restraints upon the interior commerce of the country,
    and the number of the revenue officers, must be multiplied, in
    order to guard the frontiers of those different provinces and
    districts which are subject to such different systems of

    Over and above the general restraints arising from this
    complicated system of revenue laws, the commerce of wine (after
    corn, perhaps, the most important production of France) is, in
    the greater part of the provinces, subject to particular
    restraints arising from the favour which has been shown to the
    vineyards of particular provinces and districts above those of
    others. The provinces most famous for their wines, it will be
    found, I believe, are those in which the trade in that article is
    subject to the fewest restraints of this kind. The extensive
    market which such provinces enjoy, encourages good management
    both in the cultivation of their vineyards, and in the subsequent
    preparation of their wines.

    Such various and complicated revenue laws are not peculiar to
    France. The little duchy of Milan is divided into six provinces,
    in each of which there is a different system of taxation, with
    regard to several different sorts of consumable goods. The still
    smaller territories of the duke of Parma are divided into three
    or four, each of which has, in the same manner, a system of its
    own. Under such absurd management, nothing but the great
    fertility of the soil, and happiness of the climate, could
    preserve such countries from soon relapsing into the lowest state
    of poverty and barbarism.

    Taxes upon consumable commodities may either he levied by an
    administration, of which the officers are appointed by
    govermnent, and are immediately accountable to government, of
    which the revenue must, in this case, vary from year to year,
    according to the occasional variations in the produce of the tax
    ; or they may be let in farm for a rent certain, the farmer being
    allowed to appoint his own officers, who, though obliged to levy
    the tax in the manner directed by the law, are under his
    immediate inspection, and are immediately accountable to him. The
    best and most frugal way of levying a tax can never be by farm.
    Over and above what is necessary for paying the stipulated rent,
    the salaries of the officers, and the whole expense of
    administration, the farmer must always draw from the produce of
    the tax a certain profit, proportioned at least to the advance
    which he makes, to the risk which he runs, to the trouble which
    he is at, and to the knowledge and skill which it requires to
    manage so very complicated a concern. Government, by establishing
    an administration under their own immediate inspection, of the
    same kind with that which the farmer establishes, might at least
    save this profit, which is almost always exorbitant. To farm any
    considerable branch of the public revenue requires either a great
    capital, or a great credit; circumstances which would alone
    restrain the competition for such an undertaking to a very small
    number of people. Of the few who have this capital or credit, a
    still smaller number have the necessary knowledge or experience;
    another circumstance which restrains the competition still
    further. The very few who are in condition to become competitors,
    find it more for their interest to combine together ; to become
    copartners, instead of competitors; and, when the farm is set up
    to auction, to offer no rent but what is much below the real
    value. In countries where the public revenues are in farm, the
    farmers are generally the most opulent people. Their wealth would
    alone excite the public indignation; and the vanity which almost
    always accompanies such upstart fortunes, the foolish ostentation
    with which they commonly display that wealth, excite that
    indignation still more.

    The farmers of the public revenue never find the laws too severe,
    which punish any attempt to evade the payment of a tax. They have
    no bowels for the contributors, who are not their subjects, and
    whose universal bankruptcy, if it should happen the day after the
    farm is expired, would not much affect their interest. In the
    greatest exigencies of the state, when the anxiety of the
    sovereign for the exact payment of his revenue is necessarily the
    greatest, they seldom fail to complain, that without laws more
    rigorous than those which actually took place, it will be
    impossible for them to pay even the usual rent. In those moments
    of public distress, their commands cannot he disputed. The
    revenue laws, therefore, become gradually more and more severe.
    The most sanguinary are always to be found in countries where the
    greater part of the public revenue is in farm ; the mildest, in
    countries where it is levied under the immediate inspection of
    the sovereign. Even a bad sovereign feels more compassion for his
    people than can ever be expected from the farmers of his revenue.
    He knows that the permanent grandeur of his family depends upon
    the prosperity of his people, and he will never knowingly ruin
    that prosperity for the sake of any momentary interest of his
    own. It is otherwise with the farmers of his revenue, whose
    grandeur may frequently be the effect of the ruin, and not of the
    prosperity, of his people.

    A tax is sometimes not only farmed for a certain rent, but the
    farmer has, besides, the monopoly of the commodity taxed. In
    France, the duties upon tobacco and salt are levied in this
    manner. In such cases, the farmer, instead of one, levies two
    exorbitant profits upon the people; the profit of the farmer, and
    the still more exorbitant one of the monopolist. Tobacco being a
    luxury, every man is allowed to buy or not to buy as he chuses ;
    but salt being a necessary, every man is obliged to buy of the
    farmer a certain quantity of it ; because, if he did not buy this
    quantity of the farmer, he would, it is presumed, buy it of some
    smuggler. The taxes upon both commodities are exorbitant. The
    temptation to smuggle, consequently, is to many people
    irresistible; while, at the same time, the rigour of the law, and
    the vigilance of the farmer's officers, render the yielding to
    the temptation almost certainly ruinous. The smuggling of
    salt and tobacco sends every year several hundred people to the
    galleys, besides a very considerable number whom it sends to the
    gibbet. Those taxes, levied in this manner, yield a very
    considerable revenue to government. In 1767, the farm of tobacco
    was let for twenty-two millions five hundred and forty-one
    thousand two hundred and seventy-eight livres a-year; that of
    salt for thirty-six millions four hundred and ninety-two thousand
    four hundred and four livres. The farm, in both cases, was to
    commence in 1768, and to last for six years. Those who consider
    the blood of the people as nothing, in comparison with the
    revenue of the prince, may, perhaps, approve of this method of
    levying taxes. Similar taxes and monopolies of salt and
    tobacco have been established in many other countries,
    particularly in the Austrian and Prussian dominions, and in the
    greater part of the states of Italy.

    In France, the greater part of the actual revenue of the crown is
    derived from eight different sources; the taille, the capitation,
    the two vingtiemes, the gabelles, the aides, the traites, the
    domaine, and the farm of tobacco. The live last are, in the
    greater part of the provinces, under farm. The three first are
    everywhere levied by an administration, under the immediate
    inspection and direction of government ; and it is universally
    acknowledged, that in proportion to what they take out of the
    pockets of the people, they bring more into the treasury of the
    prince than the other five, of which the administration is much
    more wasteful and expensive.

    The finances of France seem, in their present state, to admit of
    three very obvious reformations. First, by abolishing the
    taille and the capitation, and by increasing the number of the
    vingtiemes, so as to produce an additional revenue equal to the
    amount of those other taxes, the revenue of the crown might be
    preserved; the expense of collection might be much diminished ;
    the vexation of the inferior ranks of people, which the taille
    and capitation occassion, might be entirely prevented; and the
    superior ranks might not be more burdened than the greater part
    of them are at present. The vingtieme, I have already observed,
    is a tax very nearly of the same kind with what is called the
    land tax of England. The burden of the taille, it is
    acknowledged, falls finally upon the proprietors of land ; and as
    the greater part of the capitation is assessed upon those who are
    subject to the taille, at so much a-pound of that other tax, the
    final payment of the greater part of it must likewise fall upon
    the same order of people. Though the number of the vingtiemes,
    therefore, was increased, so as to produce an additional revenue
    equal to the amount of both those taxes, the superior ranks of
    people might not be more burdened than they are at present; many
    individuals, no doubt, would, on account of the great
    inequalities with which the taille is commonly assessed upon the
    estates and tenants of different individuals. The interest and
    opposition of such favoured subjects, are the obstacles most
    likely to prevent this, or any other reformation of the same
    kind. Secondly, by rendering the gabelle, the aides, the traites,
    the taxes upon tobacco, all the different customs and excises,
    uniform in all the different parts of the kingdom, those taxes
    might be levied at much less expense, and the interior commerce
    of the kingdom might be rendered as free as that of England.
    Thirdly, and lastly, by subjecting all those taxes to an
    administration under the immediate inspection and direction or
    government, the exorbitant profits of the farmers-general might
    be added to the revenue of the state. The opposition arising from
    the private inte rest of individuals, is likely to be as
    effectual for preventing the two last as the first-mentioned
    scheme of reformation.

    The French system of taxation seems, in every respect, inferior
    to the British. In Great Britain, ten millions sterling are
    annually levied upon less than eight millions of people, without
    its being possible to say that any particular order is oppressed.
    From the Collections of the Abbé Expilly, and the observations of
    the author of the Essay upon the Legislation and Commerce of
    Corn, it appears probable that France, including the provinces of
    Lorraine and Bar, contains about twenty-three or twenty-four
    millions of people; three times the number, perhaps, contained in
    Great Britain. The soil and climate of France are better than
    those of Great Britain. The country has been much longer in a
    state of improvement and cultivation, and is, upon that account,
    better stocked with all those things which it requires a long
    time to raise up and accumulate ; such as great towns, and
    convenient and well-built houses, both in town and country. With
    these advantages, it might be expected, that in France a revenue
    of thirty millions might be levied for the support of the state,
    with as little inconvenience as a revenue of ten millions is in
    Great Britain. In 1765 and 1766, the whole revenue paid into the
    treasury of France, according to the best, though, I acknowledge,
    very imperfect accounts which I could get of it, usually run
    between 308 and 325 millions of livres ; that is, it did not
    amount to fifteen millions sterling; not the half of what might
    have been expected, had the people contributed in the same
    proportion to their numbers as the people of Great Britain. The
    people of France, however, it is generally acknowledged, are much
    more oppressed by taxes than the people of Great Britain. France,
    however, is certainly the great empire in Europe, which, after
    that of Great Britain, enjoys the mildest and most indulgent

    In Holland, the heavy taxes upon the necessaries of life have
    ruined, it is said, their principal manufacturers, and are likely
    to discourage, gradually, even their fisheries and their trade in
    ship-building. The taxes upon the necessaries of life are
    inconsiderable in Great Britain, and no manufacture has hitherto
    been ruined by them. The British taxes which bear hardest on
    manufactures, are some duties upon the importation of raw
    materials, particularly upon that of raw silk. The revenue of the
    States-General and of the different cities, however, is said to
    amount to more than five millions two hundred and fifty thousand
    pounds sterling ; and as the inhabitants of the United Provinces
    cannot well be supposed to amount to more than a third part of
    those of Great Britain, they must, in proportion to their number,
    be much more heavily taxed.

    After all the proper subjects of taxation have been exhausted, if
    the exigencies of the state still continue to require new taxes,
    they must be imposed upon improper ones. The taxes upon the
    necessaries of life, therefore, may be no impeachment of the
    wisdom of that republic, which, in order to acquire and to
    maintain its independency, has, in spite of its meat frugality,
    been involved in such expensive wars as have obliged it to
    contract great debts. The singular countries of Holland and
    Zealand, besides, require a considerable expense even to preserve
    their existence, or to prevent their being swallowed up by the
    sea, which must have contributed to increase considerably the
    load of taxes in those two provinces. The republican form of
    government seems to be the principal support of the present
    grandeur of Holland. The owners of great capitals, the great
    mercantile families, have generally either some direct share, or
    some indirect influence, in the administration of that
    government. For the sake of the respect and authority which they
    derive from this situation, they are willing to live in a country
    where their capital, if they employ it themselves, will bring
    them less profit, and if they lend it to another, less interest;
    and where the very moderate revenue which they can draw from it
    will purchase less of the necessaries and conveniencies of life
    than in any other part of Europe. The residence of such wealthy
    people necessarily keeps alive, in spite of all disadvantages, a
    certain degree of industry in the country. Any public calamity
    which should destroy the republican form of government, which
    should throw the whole administration into the hands of nobles
    and of soldiers, which should annihilate altogether the
    importance of those wealthy merchants, would soon render it
    disagreeable to them to live in a country where they were no
    longer likely to be much respected. They would remove both their
    residence and their capital to some other country, and the
    industry and commerce of Holland would soon follow the capitals
    which supported them.
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