TAX 



111 



TAX 



the French calculation of the expenses of collection which 

 are not stated in the English accounts ; but making libera 

 allowance on that account, a great disproportion remain, 

 between the cost of collecting the revenue in the two 

 countries. It may perhaps be fairly estimated that thi, 

 revenue of France costs twice as much in the collection aa 

 that of England. The expenses of collecting a revenue 

 may be high without any reference to the mode of taxation 

 An excellent tax may be collected in a bad manner, either 

 by having numerous idle and highly paid officers, or by 

 cumbrous regulations and checks, which may cost the 

 i-nment much and protect the revenue very little. OJ 

 thce two causes of expense it is difficult to pronounce 

 which is most injurious to a country. The i'ormer will 

 generally be found to form part of a general system of ill- 

 regulated expenditure : the latter may arise from unwise 

 precautions for the security of the revenue. In France the 

 prodigious number of official persons is notorious, and in 

 that fact we must seek for the main cause of the enormous 

 cost of collecting the revenue. 



DIFFERENT CLASSES OF TAXES. 



In selecting one or more classes of taxes for raising the 

 revenue of a state, the principles already discussed should 

 be adhered to as far as possible ; but these do not point 

 out any particular mode of taxation as preferable to others. 

 Whatever mode of raising the necessary funds may be 

 found to press most equally upon clitferent members of the 

 community, to be least liable to objections of uncertainty, 

 or inconvenience iu the mode or times of payment, or to 

 be attended with the least expense, is fairly open to the 

 choice of a statesman ; unless objections of some other 

 nature can be proved to outweigh these recommenda- 

 tions. 



The two great divisions under which most taxes may bs 

 classed are direct and indirect. 



I. Direct Taxes. 



All taxes ought to be paid from the income of the com- 

 munity. To derive revenue from capital is to act the part 

 of a spendthrift ; and such a practice, as in private life, 

 must be condemned. If the taxes of any country should 

 become so disproportioned to its income, that in order to 

 pay them continual inroads must be made upon its capital, 

 ild fail, employment of labour would de- 

 ". and the revenue must necessarily be reduced by 

 the general impoverishment of the tax-payers. Such a 

 system could not long continue as regards all capital, but 

 it may affect particular branches of capital, or all capital 

 in certain conditions. In whatever degree it is permitted 

 to operate it is injurious. A tax upon legacies is avow- 

 edly a direct deduction from capital ; and on that account 

 objectionable, although it is profitable to the treasury and 

 very easily collected. In this country legacies left to 

 strangers are charged with a stamp duty of 10 per cent., 

 and even when left to relatives the scale of duties is suf- 

 ficiently high to cause a serious diminution of the capital. 

 A further duty is charged on proving a will, called pro- 

 bate-duty, which is perhaps more frequently paid out of 

 capital than income. The same observations will, of 

 course, apply to duties charged upon succession to the per- 

 sonal property of intestates. 



With these exceptions it has been the object of the 

 British legislature to derive all taxes from income, either 

 by direct a^es.-ment or by means of the voluntary expen- 

 diture of the people upon taxed commodities. 



Direct taxes upon the land have been universally re- 

 sorted to by all nations. Such taxes are obvious, and re- 

 quire but little refinement to devise ; and in countries 

 without commerce, land is the only source from which a 

 revenue can be derived. In most of the Eastern mo- 

 narchies the greater part of the revenue has usually been 

 raised by heavy taxes upon the soil. The tangible nature 

 of land and of its produce offers great temptations to immo- 

 derate taxation. In Spain, at the present time, the taxes 

 upon the soil are most oppressive and injurious. 'The tax 

 imposed on corn-fields is so heavy, that farmers in general 

 find it more to their interest not to till their lands at all, 

 than to run the risk of losing their costs and charges, and 

 their labour 1o bout, by the exorbitancy of the intendiente's 

 demand which they would have to meet. They have 

 adopt i-il thr jihni therefore of sowing no more wheat 1han 

 is ni'ci'.-siuy lor the sustenance of their own families. It is 

 quite clear indeed to all who are conversant with the state 



of agriculture in Spam, that unless a complete change 

 takes place in the system of taxation, so as greatly to re- 

 duce the burthens upon the land, there will not only be a 

 stagnation m rural industry, but eventually the country 

 will cease to produce a sufficient quantity for its own con- 

 sumption of that superior wheat on which Spaniards pride 

 themselves, and which was formerly and might still be 

 grown m sufficient quantities to supply all the markets in 

 Juirope.' (Madrid in 1835, vol. ii., p. 109.) 



The land-tax in England is one of considerable an- 

 tiquity. We find that under the Saxon kings a tax of this 

 description was in use. When the invasions of the Danes 

 became frequent, it was customary to purchase their for- 

 bearance by large sums of money ; and as the ordinary- 

 revenues of the crown were not sufficient, a tax was im- 

 posed on every hide of land in the kingdom. This tax 

 seems to have been first imposed A.D. 991, and was called 

 Danegeld, or Danish tax or tribute. (Saxon Chronicle, 

 by Ingram, p. 168.) It was originally one shilling for 

 each hide of land, but afterwards rose so high as seven : it 

 then fell to four shillings, at which rate it remained till it 

 was abolished about seventy years after the Norman con- 

 quest. (Henry, Hint., vol. ifi., p. 368.) A revenue still con- 

 tinued to be derived under different names from assessments 

 upon all persons holding lands, which however became 

 merged in the general subsidies introduced in the reigns of 

 Richard II. and Henry IV. During the troubles in the 

 reign of Charles I. and the Commonwealth, the practice of 

 laying weekly and monthly assessments of specific sums upon 

 the several counties was resorted to, and was found so pro- 

 fitable, that after the Restoration the antient mode of grant- 

 ing subsidies was renewed on two occasions only. (Report of 

 House rtf Commons on Land Tax as affecting Catholics, 

 1828.) In 1692 a new valuation of estates was made, and 

 certain payments were apportioned to each county and 

 hundred or other division. These payments have varied 

 in amount from 1*. in the pound to 4s. on the assessed 

 annual value, according to the annual Land Tax Acts, but 

 whatever may have been the variations in the rate levied, 

 the valuation has been the same ; and the proportion 

 chargeable to each district has continued the same as it 

 was in the time of king William III., as regulated by the 

 Act of 1692. That assessment is said not to have been 

 accurate even at that time, and of course improved cul- 

 tivation and the application of capital during the last 140 

 years have completely changed the relative value of dif- 

 ferent portions of the soil. On account of the generally 

 increased productiveness of land, the tax bears upon the 

 whole but a trifling proportion to the rent, yet its inequality 

 s very great. For instance, in Bedfordshire it amounts to 

 2s. la. in the pound ; in Surrey, to Is. Id. in Durham, to 

 3fal. ', in Lancashire, to 2d. ; and in Scotland, to 2$d. 

 (Appendix to Third Report on Agricultural Distress, 

 1836, p. 545.) Adam Smith imagined that this tax was 

 jorne entirely by the landlords, but this opinion has been 

 jroved to be'erroneous by modern political economists, who 

 icld that the tax increases the price of the produce of the 

 and, and is therefore paid by the consumers. Of that we 

 entertain no doubt ; but we are unable to agree with Mr. 

 licardo, that the English land-tax is not objectionable as 

 egards Adam Smith's first principle, viz. on the ground of 

 nequality. (Political Economy, chap, xii.) He assumes 

 hat inferior land would not be cultivated until the price of 

 iroduce had become so high as to remunerate the grower 

 it'ter payment of the tax; and that the owners of the soil 

 herefore would not suffer, but only the consumer. But 

 and is often cultivated for pleasure, for scientific experi- 

 ment, and for speculative purposes, while in this country 

 he exclusion of foreign supply at a time when population 

 vas rapidly increasing has forced inferior soils into cul- 

 ivation. Then admitting that the consumer pays the tax, 

 he owners of land appear to us to be in the same relation 

 o each other as merchants would be who should be 

 charged unequal rates of duty upon articles in which they 

 leal. In that case the consumer would ultimately pay the 

 ax, but no one will deny that the seller who pays the 

 lighest tax in the first instance meets his competitor at a 

 [isadvantagc in the market. He must wait for very high 

 )rices, or must sell at lower profits. Such is actually 

 he case where articles imported from different countries 

 >ear unequal rates of duty ; and such, we apprehend, 

 must be the case where the land is unequally assessed 

 iccording to its value. [LAND-TAX.] 



