Part 12
In this indulgent age, wherein nothing more is required on any one subject, than a little decency, it would be a ridiculous and fruitless hypocrisy to propose a tax, as the means of encouraging virtue, or of discountenancing vice; it is not, at least in a country where a man convicted of smuggling wool, is by law sentenced to have his hand cut off, nor in another where a smuggler of salt is condemned for years to serve on board the gallies, that one should preach up the heart-felt concern he must experience at framing a law which would make it felony to drink spirituous liquors if he had really a mind to prevent intoxication; it is hoped on the contrary, nay, firmly believed, that the sweetness of the poison will make palatable the very bitterness of the tax, and its absurd disproportion to the real value of the taxed article: besides, it is too evident, that it is not the difference of a few pence _more_ that will prevent a man from drinking to excess when he is so inclined, nor a few pence _less_ that will occasion another to inebriate himself, when his only motive for drinking is a moderate pleasure, or the necessity of allaying his thirst. The object of every Minister, in laying a tax, is always to procure the sum at which he has rated its produce; if the tax should answer any other purpose, this additional one is considered merely with regard to the prospect it affords of making good another tax less productive than was at first expected. In fact, a minister of finance is not a _præfectus morum_—a moral censor: the State is in want of a certain sum; _that’s enough, it must be found_.—Let us then examine, what kind of taxation will be the least burdensome in its operation, give its first shock with the least violence, and be attended with inconveniences of the shortest duration.
_Effects of a general Poll-Tax._
_Eleventh Hypothesis._
In the year 1779, the taxes in _England_ amounted, I shall say, to 10 millions; I shall suppose too, that this was the tenth part of the general produce of the land and industry: therefore the 10th part of the nominal value of that _general produce_ belonged to the tax, or was _necessitated by the tax_; the 40 shillings, which, to facilitate my operations, I shall also suppose to be the average price of the quarter of wheat, must then have been considered as the _necessary_ price, or the price _necessitated_ by the tax, and 36_s._ as the _natural_ price, or the price _acquired_ by the sole, _natural_ increase of the national wealth. But in order that those 36_s._ might be called the _natural_ price, the taxes should have been divided in such a manner as to load each particular article with a 9th part of its value; that is to say, that each individual, possessed of a property denominated 9, should see it charged only with one ninth more, in consequence of a general poll-tax, which we shall suppose to have been assessed _with the utmost impartiality_. In effect, it appears, that in this case the proprietor of a quarter of wheat, who, in consequence of the tax, would have raised the wheat from 36 to 40_s._ could not be said to have injured the hatter, who would sell him for 40 guineas the 40 hats which, previously to the poll-tax, he used to let him have for 36 guineas. It also appears, that the hatter could not be injured by giving 10 to the workman, instead of the 9 which he had hitherto paid; and that, in fine, _if 27 millions had proved sufficient for circulation formerly, three millions more, once found, were fully adequate to the annual and perpetual payment of those 10 millions of taxes_, without any one being a sufferer, but at the instant of the first payment. This system is deficient only in point of practicability; it is not established in _England_: 36 shillings therefore are not the _natural_ price of wheat; the wheat certainly owes above 4 shillings to the taxes, if its current price amounts to 40_s._
Let it be observed, nevertheless, that if the system of a poll-tax could be reduced to practice, if it were not of all systems the most absurd, though the easiest for government, if it were not of all systems that in which it is most evidently impossible to avoid thousands of injuries to the subject, one might establish now in _England_ a new tax of 10 millions annually, and pay it for ever, without altering in the least the condition of anybody, _provided one could find previously, and once for all, 2,600,000l. and that wheat should advance in price from 40s. to 43s. 4d. AND EVERY THING ELSE IN PROPORTION_. This appears to me so glaringly evident, that it extorts from me the affirmative tone. Now as soon as this should be effected, THE BURDEN OF THE TAX WOULD CLEARLY BE NULL.
But, it will be objected, the price of wheat is not thus arbitrarily advanced:—certainly not; for were this to be the case, it might also be lowered at pleasure, and would _every other day_, alternately rise from 1 to 80_s._ and fall from 80 to 1, since for this operation (become indispensable) it would suffice that there should be in all the provinces of _England_ as many bodies-corporate (_corporations_) in _agriculture_, as there are in _industry_. I am even inclined to think, that it would then be minutely examined, _Whether it be in fact advantageous to agriculture, that the merchants export more goods than they import?_ (a due attention being paid to the five articles so often mentioned, which render necessary the importation of bullion); a question of the utmost importance, to which I do not see that any body has hitherto attended, and which might be so easily determined, if my principles are just.
_Effects of a Land-Tax._
_All taxes, it is said, fall on the land at last. Land is the true, the only spring of wealth; wealth should be taxed at its very source._
It is certain, that merely by knowing how the matter stands, we know how to proceed accordingly; and that, in the long-run, every thing arranges itself in the least exceptionable manner that the system of taxation will permit. The following is probably the course which things would take, in the system of a land-tax, if it were necessary now to lay on the land a new tax of 10 millions annually, supposing always the landed revenue at 60 millions, and the quarter of wheat at 40 shillings.
_Twelfth Hypothesis._
_(I must premise, that in all I have now to say, not only on the present hypothesis, but on all those that follow, I build on this principle; ~that, from the moment every individual pays the tax~, nobody pays it; ~that nevertheless its produce reverts to the creditors of the State, and that therefore every body is interested in carrying matters to that issue as soon as possible~.—If there never existed in the average of prices any revolution so sudden, so great, and constant in its effect, as the one which I am about to suppose; it is because it never was necessary to lay all at once 10 millions of taxes. The effect produced by one million on a revenue like that which ~England~ enjoys, is so trifling, so gradual, that it never can be felt.—But to my hypothesis)._
The march of industry is always firm; she can never be bewildered by her guide. A tax of 2 shillings upon a hat will soon occasion either an alteration in the quality, or a proportionate increase in its price[7]. _Nothing more just._ But agriculture has only one resource; she cannot alter the quality of her productions, and she is always timid when she wants to increase their prices. Let it be granted, however, that the first attempt of the cultivator will be to enhance boldly the price of his goods, in a proportion which may return him the amount of the tax supposed to be of 10 millions: his wheat, of course, will rise from 40 to 46_s._ 8_d._ and so with regard to other productions; then his revenue, instead of 60, will be 70 millions; but, being obliged to lay down 10 for the tax, he will have only 60 millions left.
Let us now observe, that when the operations of agriculture are talked of in consequence of taxes, the land proprietor is alluded to; and from him they suppose that the ten millions are taken, just as the fleece is shorn from the sheep; but, on the other hand, that proprietor, though not very clear in his idea of what is best for him to do, feels mechanically that he has a right to defend his fleece, that is, to increase the price of the productions of his land, because without them, neither the manufacturer nor the Minister of Finance can subsist, and to raise that price to such a level as will subject him to pay only just as much as the minister and the manufacturer: and _this again appears to me extremely just_.
Now this very proprietor receives of his 60 millions revenue, or rather of the revenue of his land, no more than about 20 millions; (this is nearly the result of Mr. _Young_’s statement: it will be seen, in the sequel, that more or less would only alter the proportion of the shares, without having the least influence either on the application of the principle, or on its consequences): the 40 millions overplus is swallowed up, _viz._ for the daily pay of the labourer, 20 millions, and 20 millions for the other charges with which the estates are encumbered, tythes, profits of farmers, &c. &c. It follows, of course,
_Either_
That the proprietor’s share must be advanced to 30 millions, if he alone be taxed; and this will leave each of the other parts interested in the landed revenue, in possession of its 20 millions, as well after as before the tax;
_Or_,
That each of the three parts taxed singly, at 3,333,333_l._ 6_s._ 8_d._ and enabled to pay the impost by an advance of price, both in the productions and in the wages of labour, be reduced to its primitive 20 millions, after the payment of the tax.
One is evidently equal to the other; but what is not so, is, that _industry_, who paid her workmen with 20 millions when the quarter of wheat was at 40_s._ cannot pay them since the wheat is increased to 46_s._ 8_d._ but by adding to the former wages, 3,333,333_l._ 6_s._ 8_d._ an advance which, when divided on the total of her products, heretofore rated at 60 millions, raises each third part of 20 to 21,111,111, and some trifling fractions.—Now, there remains in the hands of each of the parties concerned in agriculture, only 20 millions over and above the payment of the tax.—Those who are in the persuasion that the discharge of the import must lessen, by its whole amount at least, the revenue of those who pay it, think, no doubt, that agriculture is very well off, to have, by raising the price of its commodities two thirds, lightened the weight of so terrible a burden; yet if it were possible by a vigorous exertion, by an additional increase in the price of provisions, to make it null to every body, I do not see that it would be reasonable to oppose such exertion; for, after all,
_Either_
The first increase, brought on by _agriculture_, was unjust; the proprietor was doomed to sustain alone the whole weight of the tax, if we allow _the taxator_, the man who laid the tax, to have had a single thought on the subject:
_Or_,
The further advance in the prices of agriculture is of the most indispensable necessity, if the _taxator_ has only thought of getting the amount of the tax with the least trouble to himself, leaving to Nature the care of distributing _to every one_ complete justice,—to Nature, who never fails to do it, and who, in so complicated an operation, employs only the simple spring of that private cupidity, with which she has armed and shielded every individual; just as, in order to settle the most exact symmetry in that admirable edifice commonly called a hive, she employs no other agent than the reciprocal _pressure_ of that multitude of architects who work at it, each of whom thinks of nothing but to secure a little cell for himself.
_Thirteenth Hypothesis._
Let us then suppose that agriculture, judiciously determined by wisdom not to suffer the least encroachments on any part of her _cell_, or mechanically led by cupidity to justice, boldly raises the price of her wheat from 40 to 50_s._ and the rest of her products in a due proportion; her general revenues will then be increased from 60 to 75 millions; each of the three parts interested therein will therefore stand at 25 millions, but will be reduced to 21,666,666_l._ 13_s._ 4_d._ when the tax is paid off;—
Industry, compelled also by the advanced prices of the productions of the earth, to pay her workmen 25 instead of the 20 millions which they required in the first instance, will divide the additional 5 millions amongst the 60 millions of her former returns; each third share therefore, rated hitherto at 20 millions, will, by means of the addition, rise to 21,666,666_l._ 13_s._ 4_d._—_which is the exact balance of the like sum left in the hands of each of the three branches of agriculture, after having discharged the tax_.
In a system of taxation which should be imposed only on the land, an impost of 10 millions annually, on a revenue of 60 millions, whether it fall on the proprietor, or be divided between him, the farmer, the cultivator, and other parties concerned, requires of course an addition of 25 _per cent._ to the price of the productions of the earth, that agriculture may not be sacrificed to industry; but it must be observed, that immediately after the reaction of the one upon the other shall be completed, the burden of the tax will evidently be _null_, since _the price of labour will have increased equally in both, in proportion to that of their respective products_.
_Reflexions on the foregoing System._
This system was devised to countenance and encourage agriculture; it is in her hands, they say, it is at that fountain-head of riches, that riches must be sought for; it is the land that finally pays for all; the impost then must be laid on the net produce of the land.—I shall venture some reflexions on a subject which appears to me the more important, as one of the wisest, and the most profound speeches ever delivered in the House of Lords, seems to hint at the expediency of an aggravation of the burden already laid on agriculture.
Agriculture is the spring of life; it is not the spring of those riches which we call money: money must be had for taxes; money flows from the hands of industry alone: it is then from this spring that money must be drawn.
Besides, how is it known that the money, wrested from agriculture, is not necessary to her support? Or how does it escape observation, that all the money which is not laid out by the cultivator upon agriculture, will necessarily revert to industry, either by the immediate consumption of the cultivator, or by that which he shall have occasioned on the part of the person to whom he shall have lent the value of what he has not consumed himself?
How comes it to be known, that the proprietor of a landed estate that yields him, we shall suppose, 800_l._ _per annum_, and who is charged 200_l._ for taxes, is not indebted in 300_l._ out of the remaining 600_l._? Now, it is true that 300_l._ are sufficient for his support; but were those 200_l._ which are forced from him, laid out annually on his land, they would certainly in very few years raise its produce from 800 to 1000_l._—What is that but to assess unjustly a man who enjoys only 500_l._ as high as another whose income amounts to 800_l._—to tie down agriculture to 800 when it might rise to 1000; to deprive industry of the re-action produced by that benefit; to crush population in the very bud, and consequently to prevent a more considerable consumption; in fine, to deprive government beforehand of the amount of those taxes which that increase of population and consumption would have secured to the State?
It may be said in _France_, it is true, that by a tax laid on private loan-covenants, those inconveniences are partly removed; but this very removal is only an additional obstacle, thrown in the way of agriculture, to impede its progress;—the man who could lend to the cultivator, besides the fear of not receiving back his money when wanted, has before his eyes the certainty of being charged with the twentieth penny laid on the interest of the money thus advanced, and consequently, as often as he conveniently can, lends that money to a merchant, who besides his punctuality in paying at the fixed time, never hesitates to allow the usual interest without any deduction whatever.
It may be said also in _England_, that all over _Great Britain_, the land-tax, (which, like some others, is perhaps no more than a real poll-tax under a name less grating to a _British_ ear) does not exceed the sum of about 2 millions out of 14 or 15, the whole amount of her taxes; but nothing can be deduced therefrom, but that it is subject only to a proportionable share of the inconveniences above stated; inconveniences which are inseparable from it: we may add, that it is indeed free from some further grievances which fall heavy on the _French_ cultivator:—but can the _English_ boast of their tax being founded on an invariable principle, when this very principle is unjust in its consequences, and, as often as necessity requires the tax to be advanced, multiplies the injustice which follows it?—Yet they hint at the expediency of increasing that very tax, in order to alleviate the imaginary burden that weighs down industry!—Some pretend that the land-tax is become a _public property_; they suppose that all such sales and purchases of land as have taken place since the year 1740, have been effected on that principle of renunciation of the capital, the interest of which is paid by that land-tax:—they infer, no doubt, that the intention of those who did not sell, was implicitly included in that of those who have actually sold; for they propose that all the present proprietors shall redeem the tax, in order to refund part of the national debt; as if, on the very next day after the redemption, Government had not a right to renew it, if some fresh exigency should start, which could not be answered by any other means.
In the critical moment of a discredit, which will always be imputable to the Minister, when the King and the People are fully acquainted with their real interest, if administration, not knowing what to do, does not hesitate to apply to the land proprietor, whose ways and means are always visible, and whose purse lies, as it were, ever open against his own inclination, the Minister, no doubt, finds his excuse in the necessity; but after the crisis is over, why should the proprietor be further aggrieved?
But, say they, the amount of the tax cannot be dispensed with;—no objection can be urged against necessity; _all that is wanted, is the least that can possibly be given; just as all that is wanted, is the most that it can be advantageous to take_: but the whole should be paid by each individual, only in proportion to his faculties:—Now the fact is, that the faculties of the land proprietors are not better known than those of the merchants;—_the latter have found means to prove, to persuade, that they ought not to be taxed, but in proportion to their consumption, the only criterion of their riches_, or at least that part of their riches which they do not lay out in increasing commercial wealth.—IS THE IMPROVEMENT OF THE TERRITORIAL WEALTH LESS ESSENTIAL, OR LESS VALUABLE TO THE STATE?
Let us examine, however, in what degree the taxes laid on the different articles of consumption, must enhance the price of goods, in order that agriculture may not suffer more than industry. If it should result from this research, that many previous false steps have raised the greatest obstacles against the execution of those measures which would prove the most equitable, without being more disadvantageous in any point of view; the inconvenience of such obstacles might be deemed trifling, when _compared with the burden supposed to be transmitted to posterity_. And it is not in _England_ that an important truth, generally acknowledged, will long remain without effect; it is not in _England_ that an important truth will long remain without being generally acknowledged.
_Effects of an Impost exclusively laid on the Articles of Consumption peculiar to the rich, or in other words, ~on Luxury~._
The immediate effect of a tax, is to raise the price of the object on which it is laid, by at least the whole amount of the tax: _nothing can be more just_; but it is at the same time a consideration which ought to keep pace with the one I have already offered, on the very positive _object_ of all kinds of taxation, namely, _to secure the sum at which the product of the impost is valued, whatever that sum may be_.
Now, in order to estimate justly the system of taxation we are considering, it must be presented in all its glory, that is, such as all Ministers of finance in _Europe_ seem to wish it; such as all the _English_ news-papers recommend it, rather roughly, each of them at least once a week; such as all Oppositions, past, present, and future, have pretended, do pretend, and ever will pretend it to be, so easy and so equitable; such as all preachers of the _Roman_, _English_, _Jansenist_ and _Presbyterian_ persuasion, are wont to deliver it every day among the private societies whom they are pleased to honour with their partly christian, partly political reflexions, and would speak it out from the pulpit, if Ministers of finance had any leisure to hear their sermons, &c. I shall therefore suppose that the tax of 10 millions, mentioned in the three foregoing articles, should be assessed in so able, so _charitable_ a manner, that 5 millions should fall on the landlord, and the other 5 on the richest proprietor of money. I shall begin with the most essential, for the State is certainly founded on the landed property.
What is the revenue of the land-proprietor?⸺Nothing more, all expences defrayed, than the third part of the real produce of his lands; and this third is, in the _hypothesis_, estimated at 20 millions only.—These 20 millions finding in the hands of industry, that portion which usually gave the balance of those 20 millions, raised to 25 millions by means of the tax, it clearly appears that the proprietor alluded to is short by 25 _per cent._ of the sum required to pay that portion.—In this case what is he to do?