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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 now.

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 counties; 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 quarterly 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
ascertaining, 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 discouragement 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
materials 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 drawbacks.

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:9d. 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 diminution 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 consumption. 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
3,341,837:9:9.

It must always be remembered, however, that it is the luxuries, and
not the necessary 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 liquors 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 taxes.


In 1772, the old malt tax produced......... 722,023: 11: 11
The additional... 356,776: 7: 9
In 1775, the old tax produced............... 561,627: 3: 7
The additional... 278,650: 15: 3
In 1774, the old tax produced ............ 624,614: 17: 5
The additional....310,745: 2: 8
In 1775, the old tax produced ....... .....657,357: 0: 8
The additional....323,785: 12: 6
5,855,580: 12: 0
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: 2
In 1773, the country excise................1,245,808: 3: 3
The London brewery 405,406: 17: 10
In 1774, the country excise................1,246,373: 14: 5
The London brewery 320,601: 18: 0
In 1775, the country excise................1,214,583: 6: 1
The London brewery 463,670: 7: 0
4)6,547,832: 19: 2
Average of these four years ..............1,636,958: 4: 9
To which adding the average malt tax........ 958,895: 3: 0

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 producer.

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 hitherto
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
5,507,308:18:8, 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 commodity, 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 accord.

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 being 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 one.

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 compound 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 taxation.

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
be 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 occasion, 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 interest 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 Abb 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,

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