TAXES. 



537 



such as carriages, watches. &c. , and the principle 

 upon which this is apportioned, is to graduate it 

 according to the supposed expenditure of the per- 

 sons paying the tax, assuming that this will, as a 

 general rule, be in some near proportion to their in- 

 come. In respect to imported articles, the excise 

 is either a substitute for customs or an addition to 

 them. Considered as a substitute, the excise avoids 

 the objection pointed out by Adam Smith ; but then 

 it is an expensive tax to collect, and it necessarily 

 gives rise to an irksome inquiry into the private 

 concerns and habits of people, so that, as far as im- 

 ported goods are the subject of taxation, the cus- 

 toms are the most convenient, and, on the whole, 

 the most productive tax: and this mode of taxing 

 is almost universally adopted. It cannot be made 

 a question, among a free people, to whom the right 

 of taxation belongs. In this country, the principle 

 has long been acknowledged, that taxes are a volun- 

 tary donation from the people to the government. 

 (See Chatham's speeches on the complaints of the 

 American colonies.) On the continent, where in 

 the course of time, nearly all national representation 

 has been lost, the physical posver of the government 

 is the sufficient argument, as in so many other in- 

 stances, by which all discussion on the right of tax- 

 ation is made useless. The theory of taxes has been 

 but very lately illustrated and perfected. Adam 

 Smith laid the first foundation of a complete theory. 

 Before him prevailed the physiocratical system (see 

 the article), which, however, has no solid founda- 

 tions. See the works of Adam Smith, and Say, 

 On Political Economy; also, Sir William Mere- 

 dith's Historical Remarks on the Taxation of Free- 

 States (London, 1788, 4to.) ; Andrew Hamilton's 

 Inquiry into the Principles of Taxation, Edinburgh, 

 second edition, 1793, 4to.) ; Cassaux's Considera- 

 tions of the Effect of Impost in the various Modes oj 

 Taxation (Paris. 1794, 8vo.); Frend's Principles of 

 Taxation (1799, 8 vo.); Monthion's Influence of the 

 Different Species of Taxation on the Morality, the 

 Activity, and the Industry of Nations (Paris, 1808, 

 8vo.) ; Mirabeau's Theorie de I'Impot ; Ricardo's 

 Principles of Political Economy and Taxation 

 (1819, 8vo.). 



Exemption from Taxes. The privilege of exemp- 

 tion from taxes is granted to some orders of society, 

 to individuals, or to particular kinds of property. 

 The reasons for which it is usually allowed are, 1. 

 the identity of the person exempted with the state; 

 2. to reward services rendered to the state ; 3. as a 

 means of paying debts due from the state ; 4. the 

 incompatibility of the public burdens with the office 

 or character of the individual exempted ; 5. because 

 an equivalent is received in some other way ; 6. 

 poverty; 7- ancient privileges. As to the first 

 reason, it is applicable only to the person of the 

 sovereign ; for it would be absurd to load the 

 sovereign with taxes, whilst the taxes are only 

 established in order to afford the sovereign the 

 means of promoting the public welfare. It follows, 

 then, that the revenues of the state must be free 

 from taxes, or that the state itself, considered as a 

 person, must be free from every tax. But whether 

 the individual, likewise, who is invested with the 

 sovereignty, should be entirely exempt from taxes, 

 is a very different question ; for in the revenue of 

 such an individual, there are always two things to 

 be distinguished, namely, a. that which is employed 

 by him in the exercise of his public functions, and, 

 b, that which serves to defray his private expenses; 

 tor it cannot be contended that nil which the sove- 



reign expends is devoted to the accomplishment of 

 public objects. In addition to his public capacity, 

 he stands in the condition of a private person, who 

 has his individual wishes and wants to gratify. 

 Now, if the revenue of the ruler is so large as not 

 only to supply that expenditure which is required 

 for maintaining the dignity of the reigning family, 

 but also to suffice for the private gratification of 

 the ruler, the latter part is undoubtedly to be con- 

 sidered like the net income of a private person. 

 In this point of view, there is no sufficient reason 

 why the income of the prince should be free from 

 taxes. It appears rather, for several reasons, ad 

 visable to subject it to taxation, like other private 

 property; 1. because, in this way, the prince feels, 

 proportionally, the burden of the tax, in his private 

 capacity, being obliged, like every other mn, to 

 restrict his personal expenditure ; 2. because the 

 participation of the prince in the public burdens, 

 affords an encouraging example to his subjects, and 

 serves to check the claim of exemption in any 

 other class of society. In those states where the 

 sovereignty is vested in a numerous body, the dis- 

 tinction between that which belongs to the mem- 

 bers of the sovereign body, in their public and in 

 their private capacity, is yet more evident. The 

 members of a council who share in the sovereignty, 

 or of the sovereign senate itself, can be as little 

 entitled to exemption from taxes as the members 

 of a sovereign assembly of the nation in a demo- 

 cracy; and the right of a prince to freedom from 

 taxes on that portion of his income which is devoted 

 to his private gratification, is no better founded. 

 If the state would reward an individual for public 

 sei vices by exempting him from taxes, this can 

 reasonably be done only by a personal exemption 

 for his lifetime. To declare his estates free from 

 taxes, is to make him a donation of a sum equal to 

 the tax from which his estates are exempted. But 

 to make this exemption perpetual, would be to 

 make a grant of an indefinite value, and must be 

 regarded as an instance of blind extravagance. In 

 general, this species of reward is one of the most 

 objectionable ; for the reward of public services 

 should be drawn from the public revenue, to which 

 all classes contribute in equal proportion. But the 

 remission of a certain kind of taxes usually imposes 

 new burdens on some particular class of subjects. 

 Another objection to this kind of reward is, that 

 it makes exemption from taxes appear an honour, 

 when it is for the interest of the state that a citizen 

 should consider himself the more important the 

 more he contributes to the support of the public 

 burdens. Nearly the same reasons, in particular 

 the last, may be urged against the use of this 

 exemption as a means of paying the salaries of 

 public officers. The privilege too often operates 

 unequally in the case of different officers, one 

 deriving from it a much greater advantage than 

 another. Taxes paid in money are incompatible 

 with no rank in society and no kind of occupation. 

 Other public burdens, personal service* maintenance 

 of soldiers, &c., may, indeed, be inconsistent with 

 one or the other. On that account, it would be 

 better that such burdens should be borne by indi- 

 viduals who are paid at a fixed rate for undertaking 

 them. That the poor pay no taxes, is the natural 

 consequence of a good system of taxation, which 

 charges only the net income. It follows, from 

 what has been said, that a personal right to exemp- 

 tion from taxes cannot be properly granted, and 

 should be abolished where it exists; sufficient 



