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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 fundamental 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

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 pound.

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

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

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

The rent of houses might easily be ascertained with sufficient
accuracy, by a policy of the same kind with that which would be
necessary 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 has been

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

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 industry. 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 government.

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

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

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

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

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

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 magistrate,
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 supposed
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 Hamburg.

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

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 unequal.

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 generality 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 instruments 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

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

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 nature.

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

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 crown.

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

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

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-offices 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

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 shillings a week 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
enhancement of price, together with the profit of those who advance
it, must always be finally paid by the landlords and consumers.

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

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-labourers 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 emoluments, 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 labour.

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
consumable 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

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 intolerable.

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 them.

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 inconveniencies of such taxes.


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