Chapter 2, Article 4: General Taxes -- Capitation Taxes
Article 4: Taxes which should fall indifferently on every Species of Revenue138
The taxes which should fall indifferently on every different species of revenue, are:
- Capitation taxes
- Taxes on consumable commodities
- These must be paid indifferently from rent, wages, or profits.
Capitation taxes* become arbitrary if it is proportioned to the fortune or revenue of each taxpayer.
- A man's fortune varies daily.
- Without an intolerable annual inquisition, it can only be guessed at.
- His assessment must depend on the good or bad humour of his assessors.
- It must be all arbitrary and uncertain.
* [A tax levied on a person without any reference to his property or his business or employment] 140
Capitation taxes become unequal if they are proportioned to the rank of each taxpayer.
- This is because the degrees of fortune are frequently unequal in the same rank.
If such taxes are attempted to be rendered equal, they become arbitrary and uncertain.
- If they are attempted to be rendered certain and not arbitrary, they become unequal.
- Whether the tax be light or heavy, uncertainty is always a great grievance.
- In a light tax, a big degree of inequality may be supported.
- In a heavy tax, it is intolerable.
In England's poll-taxes during William III's reign, most of the taxpayers were assessed according to their rank as dukes, marquisses, earls, viscounts, etc.
- All shopkeepers and tradesmen worth more than £300 were subject to the same assessment disregarding the difference in their fortunes.
- Their rank was more considered than their fortune.
- Several people who were were rated according to their fortune in the first poll-tax, were afterwards rated according to their rank.
- In the first poll-tax, sergeants, attorneys, and proctors at law were assessed at 15% of their income.
- They were afterwards assessed as gentlemen.
- The poll tax was not very heavy.
- A big degree of inequality in it was more supportable than any degree of uncertainty.
In France, a capitation tax was levied uninterrupted since the start of the 18th century.
- The highest orders of people are rated according to their rank by an invariable tariff:
- the officers of the king's court,
- the judges and other officers in the superior courts of justice,
- the officers of the troops, etc
- The lower orders of people are assessed annually according to their supposed fortune.
- In France, high ranking people easily submit to a very unequal, but non-heavy tax.
- This is to avoid the intendant's arbitrary assessment.
- However, the inferior ranks of people must patiently suffer the assessment given to them.
In England, the poll-taxes never produced the expected sum.
- In France, the capitation always produces the expected sum.
- When England's mild government assessed the people to the poll-tax, it contented itself with what that assessment produced.
- It required no compensation for the loss from those:
- who could not pay,
- who would not pay (there were many of them), or
- who were not forced to pay.
- The more severe French government assesses a certain sum on each generality.
- The intendant must find this amount.
- If any province complains of being assessed too high, it may, in next year's assessment, get an abatement proportioned to the previous year's overcharge.
- But it must pay in the meantime.
- The intendant was empowered to assess it in a larger sum to be sure of finding the sum assessed on his generality.
- The failure or inability of some of the taxpayers might be compensated by overcharging the rest.
- Until 1765, the fixation of this surplus assessment was left to his discretion.
- In that year, the council assumed this power to itself.
- The author of the Memoires on the impositions in France was perfectly well-informed.
- He observes that:
- the least considerable capitation in the provinces is that for:
- the nobility
- the people exempt from the taille
- the the largest falls on those subject to the taille
- They are assessed to the capitation according to the taille.
Capitation taxes levied on the lower ranks of people are direct taxes on wages.
- They are as inconvenient as such taxes.
Capitation taxes are levied at little cost.
- They afford a sure revenue to the state when rigorously exacted.
- Thus, they are very common in countries where the inferior ranks of people are neglected.
- Only a small part of a great empire's public revenue was ever drawn from such taxes.
- Such tax revenue might have been sourced from some other way more convenient to the people.
Next: Chapter 2l: Sales Taxes