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Chapter 2



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.


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.


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.

Adam Smith

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