markitect-main/examples/infospace-with-history/artifacts/sources/book-5-chapter-02.md

id, title, book, chapter, artifact_type

id	title	book	chapter	artifact_type
book-5-chapter-02	OF THE SOURCES OF THE GENERAL OR PUBLIC REVENUE OF THE SOCIETY.	5	2	content

CHAPTER II. OF THE SOURCES OF THE GENERAL OR PUBLIC REVENUE OF THE SOCIETY.

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




  PART I. Of the Funds, or Sources, of Revenue, which may peculiarly belong
  to the Sovereign or Commonwealth.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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




  PART II. Of Taxes.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  If, by such a system of administration, a tax of this kind could be so
  managed as to give, not only no discouragement, but, on the contrary, some
  encouragement to the improvement or land, it does not appear likely to
  occasion any other inconveniency to the landlord, except always the
  unavoidable one of being obliged to pay the tax. In all the variations of
  the state of the society, in the improvement and in the declension of
  agriculture; in all the variations in the value of silver, and in all
  those in the standard of the coin, a tax of this kind would, of its own
  accord, and without any attention of government, readily suit itself to
  the actual situation of things, and would be equally just and equitable in
  all those different changes. It would, therefore, be much more proper to
  be established as a perpetual and unalterable regulation, or as what is
  called a fundamental law of the commonwealth, than any tax which was
  always to be levied according to a certain valuation.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  Taxes upon the Rent of Houses.

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

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

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

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

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

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

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

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

  Ground-rents are a still more proper subject of taxation than the rent of
  houses. A tax upon ground-rents would not raise the rent of houses; it
  would fall altogether upon the owner of the ground-rent, who acts always
  as a monopolist, and exacts the greatest rent which can be got for the use
  of his ground. More or less can be got for it, according as the
  competitors happen to be richer or poorer, or can afford to gratify their
  fancy for a particular spot of ground at a greater or smaller expense. In
  every country, the greatest number of rich competitors is in the capital,
  and it is there accordingly that the highest ground-rents are always to be
  found. As the wealth of those competitors would in no respect be increased
  by a tax upon ground-rents, they would not probably be disposed to pay
  more for the use of the ground. Whether the tax was to be advanced by the
  inhabitant or by the owner of the ground, would be of little importance.
  The more the inhabitant was obliged to pay for the tax, the less he would
  incline to pay for the ground; so that the final payment of the tax would
  fall altogether upon the owner of the ground-rent. The ground-rents of
  uninhabited houses ought to pay no tax. Both ground-rents, and the
  ordinary rent of land, are a species of revenue which the owner, in many
  cases, enjoys without any care or attention of his own. Though a part of
  this revenue should be taken from him in order to defray the expenses of
  the state, no discouragement will thereby be given to any sort of
  industry. The annual produce of the land and labour of the society, the
  real wealth and revenue of the great body of the people, might be the same
  after such a tax as before. Ground-rents, and the ordinary rent of land,
  are therefore, perhaps, the species of revenue which can best bear to have
  a peculiar tax imposed upon them.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  Taxes upon the Profit of particular Employments.

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

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

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

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

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

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

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

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

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

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

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

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

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




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

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

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

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

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

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

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

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

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

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

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

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

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

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

  Such taxes, even when they are proportioned to the value of the property
  transferred, are still unequal; the frequency of transference not being
  always equal in property of equal value. When they are not proportioned to
  this value, which is the case with the greater part of the stamp duties
  and duties of registration, they are still more so. They are in no respect
  arbitrary, but are, or may be, in all cases, perfectly clear and certain.
  Though they sometimes fall upon the person who is not very able to pay,
  the time of payment is, in most cases, sufficiently convenient for him.
  When the payment becomes due, he must, in most cases, have the more to
  pay. They are levied at very little expense, and in general subject the
  contributors to no other inconveniency, besides always the unavoidable one
  of paying the tax. In France, the stamp duties are not much complained of.
  Those of registration, which they call the Controle, are. They give
  occasion, it is pretended, to much extortion in the officers of the
  farmers-general who collect the tax, which is in a great measure arbitrary
  and uncertain. In the greater part of the libels which have been written
  against the present system of finances in France, the abuses of the
  controle make a principal article. Uncertainty, however, does not seem to
  be necessarily inherent in the nature of such taxes. If the popular
  complaints are well founded, the abuse must arise, not so much from the
  nature of the tax as from the want of precision and distinctness in the
  words of the edicts or laws which impose it.

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

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

  ARTICLE III.—Taxes upon the Wages of Labour.

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

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

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

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

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

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

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

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

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

  Capitation Taxes.

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

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

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

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

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

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

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

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

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

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

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

  When the diminution of revenue is the effect of the 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
  consumption 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
  shillings 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: 9¾ In 1773, the old tax produced............... £561,627: 3: 7½ The additional... £278,650: 15: 3¾ In 1774, the old tax produced ............. £624,614: 17: 5¾ The additional....£310,745: 2: 8½ In 1775, the old tax produced ..............£657,357: 0: 8¼ The additional....£323,785: 12: 6¼ 4)£3,835,580: 12: 0¾ Average of these four years ............... £958,895: 3: 0

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

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

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

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

  Malt is consumed, not only in the brewery of beer and ale, but in the
  manufacture of low wines and spirits. If the malt tax were to be raised to
  eighteen shillings upon the quarter, it might be necessary to make some
  abatement in the different excises which are imposed upon those particular
  sorts of low wines and spirits, of which malt makes any part of the
  materials. In what are called malt spirits, it makes commonly but a third
  part of the materials; the other two-thirds being either raw barley, or
  one-third barley and one-third wheat. In the distillery of malt spirits,
  both the opportunity and the temptation to smuggle are much greater than
  either in a brewery or in a malt-house; the opportunity, on account of the
  smaller bulk and greater value of the commodity, and the temptation, on
  account of the superior height of the duties, which amounted to 3s. 10
  ⅔d. 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 ⅔d.
  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
  twenty-five, 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 twenty-four
  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 £5,507,308:18:8¼, which was levied at an
  expense of little more than five and a-half per cent. From this gross
  produce, however, there must be deducted what was paid away in bounties
  and drawbacks upon the exportation of exciseable goods, which will reduce
  the neat produce below five millions. {The neat produce of that year,
  after deducting all expenses and allowances, amounted to £4,975,652:19:6.}
  The levying of the salt duty, and excise duty, but under a different
  management, is much more expensive. The neat revenue of the customs does
  not amount to two millions and a-half, which is levied at an expense of
  more than ten per cent., in the salaries of officers and other incidents.
  But the perquisites of custom-house officers are everywhere much greater
  than their salaries; at some ports more than double or triple those
  salaries. If the salaries of officers, and other incidents, therefore,
  amount to more than ten per cent. upon the neat revenue of the customs,
  the whole expense of levying that revenue may amount, in salaries and
  perquisites together, to more than twenty or thirty per cent. The officers
  of excise receive few or no perquisites; and the administration of that
  branch of the revenue being of more recent establishment, is in general
  less corrupted than that of the customs, into which length of time has
  introduced and authorised many abuses. By charging upon malt the whole
  revenue which is at present levied by the different duties upon malt and
  malt liquors, a saving, it is supposed, of more than £50,000, might be
  made in the annual expense of the excise. By confining the duties of
  customs to a few sorts of goods, and by levying those duties according to
  the excise laws, a much greater saving might probably be made in the
  annual expense of the customs.

  Secondly, such taxes necessarily occasion some obstruction or
  discouragement to certain branches of industry. As they always raise the
  price of the commodity taxed, they so far discourage its consumption, and
  consequently its production. If it is a commodity of home growth or
  manufacture, less labour comes to be employed in raising and producing it.
  If it is a foreign commodity of which the tax increases in this manner the
  price, the commodities of the same kind which are made at home may
  thereby, indeed, gain some advantage in the home market, and a greater
  quantity of domestic industry may thereby be turned toward preparing them.
  But though this rise of price in a foreign 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 be 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 five 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 Abbé
  Expilly, and the observations of the author of the Essay upon the
  Legislation and Commerce of Corn, it appears probable that France,
  including the provinces of Lorraine and Bar, contains about twenty-three
  or twenty-four millions of people; three times the number, perhaps,
  contained in Great Britain. The soil and climate of France are better than
  those of Great Britain. The country has been much longer in a state of
  improvement and cultivation, and is, upon that account, better stocked
  with all those things which it requires a long time to raise up and
  accumulate; such as great towns, and convenient and well-built houses,
  both in town and country. With these advantages, it might be expected,
  that in France a revenue of thirty millions might be levied for the
  support of the state, with as little inconvenience as a revenue of ten
  millions is in Great Britain. In 1765 and 1766, the whole revenue paid
  into the treasury of France, according to the best, though, I acknowledge,
  very imperfect accounts which I could get of it, usually run between 308
  and 325 millions of livres; that is, it did not amount to fifteen millions
  sterling; not the half of what might have been expected, had the people
  contributed in the same proportion to their numbers as the people of Great
  Britain. The people of France, however, it is generally acknowledged, are
  much more oppressed by taxes than the people of Great Britain. France,
  however, is certainly the great empire in Europe, which, after that of
  Great Britain, enjoys the mildest and most indulgent government.

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

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