SSS 
TAXES. 
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 con- 
cerns and habits of people, so that, as far as im- 
ported goods are the subject of taxation, the 
customs 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 England the principle has long been acknow- 
ledged, that taxes are a voluntary donation from 
the people to the government.. On the European 
continent, where, in the course of time, nearly 
all national representation has been lost, the 
physical power of the government is the sufficient 
argument, as in so many other instances, by which 
all discussion on the right of taxation 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, 
which, however, has no solid foundations. 
Huemption from Taxes—TVhe privilege of ex- 
emption 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 exempt- 
ed 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 equiva- 
lent 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 pro- 
moting 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 em- 
ployed by him in the exercise of his public func- 
tions, and, 6. that which serves to defray his 
private expenses; for it cannot be contended 
that all which the sovereign expends is devoted 
to the accomplishment of public objects. In ad- 
dition to his public capacity, he stands in the 
condition of a private person, who has his indi- 
vidual 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 
405 
/considered like the net income of a private per- 
son. 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, advisable 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 man, to restrict his personal expen- 
diture ; 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 distinction between that 
which belongs to the members of the sovereign 
body, in their public and in their private capa- 
city, 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 democracy ; 
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 pub- 
lic services by exempting him from taxes, this 
can reasonably be done only by a personal ex- 
emption 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 per- 
petual, 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 contri- 
bute in equal proportion. But the remission of 
a certain kind of taxes usually imposes new bur- 
dens on some particular class of subjects. Ano- 
ther 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 impor- 
tant the more he contributes to the support of 
the public burdens. Nearly the same rea‘sons, 
in particular the last, may be urged against the 
use of this exemption asa 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 incom- 
patible with no rank in society and no kind of 
occupation. Other public burdens, personal ser- 
vice, 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 individuals 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 
