fifty thousand crowns, which, at four and six-republics of Greece and Italy, every citizen pence the crown, amounts to L.33,750 sterling. was a soldier, and both served, and prepared The government of Pennsylvania, without himself for service, at his own expense. amassing any treasure, invented a method of Neither of those two circumstances, therelending, not money, indeed, but what is e- fore, could occasion any very considerable exquivalent to money, to its subjects. By ad- pense to the state. The rent of a very movancing to private people, at interest, and derate landed estate might be fully sufficient upon land security to double the value, paper for defraying all the other necessary expenses bills of credit, to be redeemed fifteen years af- of government. ter their date; and, in the mean time, made In the ancient monarchies of Europe, the transferable from hand to hand, like bank- manners and customs of the times sufficiently notes, and declared by act of assembly to be a prepared the great body of the people for legal tender in all payments from one inhabi- war; and when they took the field, they tant of the province to another, it raised a were, by the condition of their feudal temoderate revenue, which went a considerable nures, to be maintained either at their own way towards defraying an annual expense of expense, or at that of their immediate lords, about L. 4500, the whole ordinary expense of without bringing any new charge upon the that frugal and orderly government. The sovereign. The other expenses of governsuccess of an expedient of this kind must have ment were, the greater part of them, very depended upon three different circumstances: moderate. The administration of justice, it first, upon the demand for some other instru- has been shewn, instead of being a cause of ment of commerce, besides gold and silver expense was a source of revenue. The lamoney, or upon the demand for such a quan- bour of the country people, for three days tity of consumable stock as could not be had before, and for three days after, harvest, was without sending abroad the greater part of thought a fund sufficient for making and their gold and silver money, in order to pur maintaining all the bridges, highways, and chase it; secondly, upon the good credit of other public works, which the commerce of the government which made use of this expe- the country was supposed to require. In dient; and, thirdly, upon the moderation with those days the principal expense of the sovewhich 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. reign 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. Land is a fund of more stable and permanent nature; and the rent of public lands, ac- In the present state of the greater part of cordingly, has been the principal source of the civilized monarchies of Europe, the rent the public revenue of many a great nation of all the lands in the country, managed as that was much advanced beyond the shepherd they probably would be, if they all belonged state. From the produce or rent of the pub- to one proprietor, would scarce, perhaps, Lic 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. 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 War, and the preparation for war, are the of those debts, amounts to upwards of ten two circumstances which, in modern times, millions a-year. But the land tax, at four pccasion the greater part of the necessary ex- shillings in the pound, falls short of two milpense of all great states. But in the ancient lions a-year. This land tax, as it is called, 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. however, is supposed to be one-fifth, not only changed for something else that is consumed of the rent of all the land, but of that of all by them. Whatever keeps down the produce the houses, and of the interest of all the capi- of the land below what it would otherwise tal stock of Great Britain, that part of it rise to, keeps down the revenue of the great only excepted which is either lent to the pub- body of the people, still more than it does lic, or employed as farming stock in the cul- that of the proprietors of land. The rent of tivation of land. A very considerable part land, that portion of the produce which beof the produce of this tax arises from the longs to the proprietors, is scarce anywhere rent of houses and the interest of capital stock. in Great Britain supposed to be more than a The land tax of the city of London, for ex-third part of the whole produce. If the land ample, at four shillings in the pound, a- which, in one state of cultivation, affords a mounts to L.123,399.6:7; that of the city revenue of ten millions sterling a-year, would of Westminster to L.63,092: 1:5; that of in another afford a rent of twenty millions; the palaces of Whitehall and St. James's, to the rent being, in both cases, supposed a L.30,754: 6: 3. A certain proportion of third part of the produce, the revenue of the the land tax is, in the same manner, assessed proprietors would be less than it otherwise upon all the other cities and towns corporate might be, by ten millions a-year only; but 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 manage-monly sell at thirty years purchase; the un ment of his factors and agents. The crown lands of Great Britain do not at present af ford 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 ex They 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. 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, com improved, uncultivated, and low-rented crown from the duties of custom and excise, would | four following maxims with regard to taxes in necessarily increase with the revenue and con- general. sumption of the people. The I. The subjects of every state ought to The revenue which, in any civilized mo- contribute towards the support of the governnarchy, the crown derives from the crown ment, as nearly as possible, in proportion to lands, though it appears to cost nothing to their respective abilities; that is, in proporindividuals, in reality costs more to the so- tion to the revenue which they respectively ciety than perhaps any other equal revenue enjoy under the protection of the state. which the crown enjoys. It would, in all expense of government to the individuals of cases, be for the interest of the society, to re- a great nation, is like the expense of manageplace this revenue to the crown by some other ment to the joint tenants of a great estate, equal revenue, and to divide the lands among who are all obliged to contribute in proporthe people, which could not well be done bet- tion to their respective interests in the estate. ter, perhaps, than by exposing them to public In the observation or neglect of this maxim, sale. 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 Lands, for the purposes of pleasure and magnificence, parks, gardens, public walks, &c. possessions which are everywhere considered as causes of expense, not as sources of mentioned, is necessarily unequal, in so far 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. 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-getherer, 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. 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 ta 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 3. Every tax ought to be levied at the time, intended should fall upon profit; thirdly, of or in the manner, in which it is most likely to those which, it is intended should fall upon be convenient for the contributor to pay it. A wages; and fourthly, of those which, it is in- tax upon the rent of land or of houses, payable tended should fall indifferently upon all those at the same term at which such rents are usuthree different sources of private revenue. ally paid, is levied at the time when it is most The particular consideration of each of these likely to be convenient for the contributor to four different sorts of taxes will divide the pay; or when he is most likely to have wheresecond part of the present chapter into four withal to pay. Taxes upon such consumable articles, three of which will require several goods as are articles of luxury, are all finally other subdivisions. Many of these taxes, it paid by the consumer, and generally in a 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 He manner that is very convenient for him. 4. Every tax ought to be so contrived, as all nations have not in this respect been equal. both to take out and to keep out of the pockets ly successful. of the people as little as possible, over and above what it brings into the public treasury Rent of Land. vary with every variation in the real rent of the land, and to rise or fall with the improvement or declension of its cultivation. of the state. A tax may either take out or ART. I.-Taxes upon Rent-Taxes upon the 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, A TAX upon the rent of land may either be the levying of it may require a great number imposed according to a certain canon, every of officers, whose salaries may eat up the district being valued at a certain rent, which greater part of the produce of the tax, and valuation is not afterwards to be altered; or whose perquisites may impose another addi- it may be imposed in such a manner, as to tional 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 maintenence A land tax which, like that of Great Briand employment to great multitudes. While tain, is assessed upon each district accordit obliges the people to pay, it may thus di- ing to a certain invariable canon, though minish, or perhaps destroy, some of the funds it should be equal at the time of its first eswhich might enable them more easily to do so. tablishment, necessarily becomes unequal in Thirdly, by the forfeitures and other penalties process of time, according to the unequal dewhich those unfortunate individuals incur, grees of improvement or neglect in the cultiwho attempt unsuccessfully to evade the tax, vation of the different parts of the counit may frequently ruin them, and thereby put try. In England, the valuation, according an end to the benefit which the community to which the different counties and parishes might have received from the employment of were assessed to the land tax by the 4th of their capitals. An injudicious tax offers a William and Mary, was very unequal even at great temptation to smuggling. But the its first establishment. This tax, therefore, penalties of smuggling must arise in propor- so far offends against the first of the four tion to the temptation. The law, contrary to maxims above mentioned. It is perfectly all the ordinary principles of justice, first agreeable to the other three. It is perfectly creates the temptation, and then punishes those certain. The time of payment for the tax, who yield to it; and it commonly enhances being the same as that for the rent, is as conthe punishment, too, in proportion to the very venient as it can be to the contributor. Though circumstance which ought certainly to allevi- the landlord is, in all cases, the real contribuate it, the temptation to commit the crime. tor, the tax is commonly advanced by the Fourthly, by subjecting the people to the tenant, to whom the landlord is obliged to alfrequent visits and the odious examination of low it in the payment of the rent. This tax the tax-gatherers, it may expose them to much is levied by a much smaller number of officers unnecessary trouble, vexation, and oppression; than any other which affords nearly the same and though vexation is not, strictly speaking, revenue. As the tax upon each district does 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 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 landlord 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 st ndard 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. 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. 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 In circumstances, therefore, somewhat dif- penalties were to be paid to either of the two ferent from those which have actually taken parties who informed against and convicted place, this constancy of valuation might have the other of such concealment or misreprebeen a very great inconveniency, either to the sentation, it would effectually deter them from contributors or to the commonwealth. In combining together in order to defraud the the course of ages, such circumstances, how-public revenue. All the conditions of the ever, must at some time or other happen. But lease might be sufficiently known from such a though empires, like all the other works of men, record. have all hitherto proved mortal, yet every em pire 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 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, * Memoires concernant les Droits, p 240, 241. |