Chapter 2p, Article 4: General taxes -- French Taxation
In France, the different revenue laws in the different provinces require many revenue officers to:
- prevent the importation of certain goods, or
- subject imported goods to certain duties.
These interrupt France's interior commerce.
- Some provinces are allowed to compound for the gabelle or salt-tax.
- Others are exempted from it altogether.
- Some provinces are exempted from the exclusive sale of tobacco
- The farmers-general enjoy this exemption through most of France.
- The aides correspond to our excise.
- These are very different in different provinces.
- Some provinces are exempted from them, and pay a composition or equivalent.
- In provinces where they are collected, there are many local duties which do not extend beyond a particular town or district.
- The traites correspond to our customs.
- These divide France into three great parts:
- The provinces subject to the tariff of 1664 or the provinces of the five great farms
- These include Picardy, Normandy, and most of France's interior provinces.
- The five great farms are called such because the ancient customs duties were divided into five big branches.
- Each branch was the subject of a particular farm, though they are all united as one.
- The provinces subject to the tariff of 1667 or the provinces reckoned foreign
- These include most of the frontier provinces
- The provinces treated as foreign
- These can have a free commerce with foreign countries.
- In their commerce with other French provinces, they are subject to the same duties as foreign countries.
- These include Alsace, the three bishoprics of Metz, Toul, and Verdun, and the three cities of Dunkirk, Bayonne, and Marseilles.
- There are many duties confined to a particular town of the provinces of:
- the five great farms and
- those reckoned foreign.
- Some of such duties are even in foreign-treated provinces, particularly in Marseilles.
- It is obvious how France's tax system:
- restraints its own interior commerce and
- requires many revenue officers to guard the frontiers.
Wine is perhaps the most important produce of France after corn.
- In most provinces, wine is subject to particular restraints, over and above the general restraints from its complicated tax system.
- These particular restraints arise from the favour shown to the vineyards of particular provinces over those of others.
- The fewest particular restraints are given to the provinces most famous for their wines.
- The extensive market which such provinces enjoy, encourages good management in:
- vineyard cultivation, and
- wine preparation
Such various and complicated revenue laws are not peculiar to France.
- The little duchy of Milan is divided into six provinces.
- Each province has a different tax system for different kinds of consumable goods.
- Smaller territories of the Duke of Parma are divided into three or four.
- Each territory also has a system of its own.
- Under such absurd management, only the great soil fertility and happy climate could preserve such countries from relapsing into poverty and barbarism.
Taxes on consumable commodities may be levied by:
- the government directly
- In this case, the revenue varies yearly according to the variations in the produce of the tax
- The taxes are let in farm for a rent certain.
- The farmer is allowed to appoint his own officers to levy the tax as directed by law.
- This is never the best nor most frugal way of levying a tax.
- In addition to his officers' salaries and administration costs, the farmer must always draw profit from the tax proportional to:
- the advance which he makes,
- the risk he runs,
- his trouble, and
- his knowledge and skill needed to manage a very complicated concern.
- This exorbitant profit is not incurred if the government administers the tax instead.
- A big capital or credit is needed to farm any big branch of the public revenue.
- These would alone restrain the competition for such an undertaking to very few people.
- The competition is further reduced by the knowledge or experience needed.
- Those few with all of these would find it for their interest to combine and be co-partners.
- When the farm is set up to auction, they only offer the rent much below the real value.
- In countries where the public revenues are in farm, the farmers are the most opulent.
- Their wealth alone would excite public indignation.
- Vanity almost always accompanies such upstart fortunes.
- Their foolish ostentation excites that indignation more.
The farmers of the public revenue never find the laws against tax evasion too severe.
- They do not care for the taxpayers because:
- those taxpayers are not the farmers' subjects, and
- the taxpayers' universal bankruptcy would not much affect the farmers' interest.
- The sovereign's anxiety for his own revenue is the greatest during the greatest state exigencies.
- In this case, the farmers always complain, that without more rigorous laws, it will be impossible for them to pay even the usual rent.
- In those moments of public distress, their demands cannot be disputed.
- The revenue laws gradually become more severe.
- The bloodiest laws are always found in countries where most of the public revenue is in farm.
- The mildest laws are found in countries where it is levied directly by the sovereign.
- Even a bad sovereign feels more compassion for his people than by farmers of his revenue.
- He knows that his family's permanent grandeur depends on the people's prosperity.
- He will never knowingly ruin that prosperity for the sake of his momentary interest.
- It is otherwise with the farmers of his revenue.
- Their grandeur may frequently be caused by the ruin of the people, not their prosperity.
The farmer sometimes has the monopoly of the taxed commodity.
- In France, tobacco and salt duties are levied in this way.
- In such cases, the farmer levies two exorbitant profits on the people:
- the farmer's profit, and
- the exorbitant profit of the monopolist.
- Tobacco is a luxury.
- Every man is allowed to buy or not to buy as he chooses.
- But salt is a necessity.
- Every man is obliged to buy a certain amount of it from the farmer.
- If he did not buy it from the farmer, it is presumed that he would buy it from some smuggler.
- The taxes on luxury and necessary commodities are exorbitant.
- The temptation to smuggle is consequently irresistible.
- This temptation is made ruinous by:
- the rigour of the law, and
- the vigilance of the farmer's officers.
- Salt and tobacco smuggling sends several hundred people to the galleys every year.
- It also sends many people to the gibbet.
- Those taxes yield a very big revenue to government.
- In 1767, the farm of tobacco was let for 22,541,278 livres a year.
- The farm of salt, for 36,494,404 livres.
- The farm in both cases was to start in 1768 and last for six years.
- Those who consider the people's blood as nothing compared to the prince's revenue may perhaps approve of this taxation method.
- Similar taxes and monopolies of salt and tobacco were established in other countries, particularly in Austria, Prussia, and most of the Italian states.
In France, most of the crown's actual revenue is derived from eight sources:
- Two vingtiemes
- The farm of tobacco
- The last five are under farm in most of the provinces.
- The first three are administered everywhere directly by the government.
- They bring more into the treasury than the last five sources.
- Those five are much more wasteful and expensive to administer.
France's present finances need three very obvious reforms.
- The crown's revenue can produce an additional revenue equal to those last five taxes by:
- Abolishing the taille and the capitation
- Increasing the number of vingtiemes
- The cost of collection might be much reduced.
- The vexation of lower class from the taille and capitation might be prevented entirely.
- The upper class would not be more burdened
- The vingtieme is a tax very similar to England's land-tax.
- The taille's burden falls finally on the proprietors of land.
- Most of the capitation is assessed on people who are subject to the taille at so much a pound of that other tax.
- Most of its final payment must likewise fall on the same order of people.
- The number of the vingtiemes was increased to produce an additional revenue equal to the amount of the taille and capitation.
- But the upper class might not be more burdened than at present.
- Many individuals would be burdened, because of the great inequalities from the taille.
- The interest and opposition of such favoured subjects are the obstacles most likely to prevent this kind of reform.
- The gabelle, aides, traites, tobacco taxes, and all the different customs and excise taxes can be levied at much less cost if they were uniform throughout France.
- Frances interior commerce might become as free as that of England.
- By subjecting all those taxes to be directly administered by the government, the exorbitant profits of the farmers-general can be added to the state's revenue.
- The opposition from the private interests will be very effective for preventing the last two reforms as the first reform.
The French tax system seems inferior to the British in every respect.
Dutch Taxation and Republican Government
- In Great Britain, £10 million are annually levied on less than 8 million people without any order being oppressed.
- There are around 24 million people in France, including the provinces of Lorraine and Bar according to:
- the collections of the Abbe Expilly, and
- the observations of the author of the Essay upon legislation and commerce of corn
- This is three times Great Britain's population.
- France's soil and climate are better than those of Great Britain.
- The country has been improved and cultivated much longer.
- It has more great towns and well-built houses in the towns and the countryside.
- With these advantages, we might expect a revenue of 30 million in France might be levied to support the state with as little inconvenience as a revenue of 10 million is levied in Great Britain.
- In 1765 and 1766, the French treasury's total revenue according to the best but very imperfect accounts which I could get, ran between 308 and 325 million livres.
- It did not amount to £15 million, or half of what the same number of British would have contributed.
- The French are much more oppressed by taxes than the British.
- After Great Britain, France has the mildest and most indulgent government.
In Holland, it has been said that the heavy taxes on necessities have ruined their principal manufactures.
- Those taxes are likely to discourage even their fisheries and shipbuilding.
- Taxes on necessities are small in Great Britain.
- No manufacture has been ruined by such taxes.
- Its duties on raw material imports, particularly on raw silk imports, are the British taxes which hurt manufacturing the most.
- The revenue of the states-general and the different cities is more than £5,250,000.
- Holland's population is 1/3 the population of Great Britain.
- The Dutch is much more heavily taxed, in proportion to their number.
After all the proper subjects of taxation have been exhausted, if state exigencies still continue to require new taxes, they must be imposed on improper ones.
- Its taxes on basic necessities were required to acquire and maintain Dutch independence.
- In spite of its great frugality, it has been involved in expensive wars that created great debts.
- Holland and Zeeland require a big expence even to prevent them from being swallowed by the sea,
- It must have increased their load of taxes.
- The republican form of government is the principal support of Holland's present grandeur.
- The owners of great capitals, the great mercantile families, generally have some direct share or indirect influence in that government's administration.
- For the sake of respect and authority, they are willing to live in a country where their capital brings them less profit or less interest, and consquently, less enjoyments than elsewhere in Europe.
- The residence of such wealthy people necessarily keeps alive a certain degree of industry in the country.
- Public calamities can destroy the republican form of government and throw the administration into the hands of nobles and soldiers.
- It would annihilate the importance of those wealthy merchants and make it disagreeable to them to live in a country where they are not much respected.
- They would remove their residences and their capitals to some other country.
- Holland's industry and commerce would then follow the capitals which supported them.
Next: Chapter 3: Public Debts