An Inquiry into the Nature and Causes of the Wealth of Nations by Adam Smith (ebook reader with highlighter txt) 📖

their wines, it will be

found, I believe, are those in which the trade in that article is

subject to the fewest restraints of this kind. The extensive

market which such provinces enjoy, encourages good management

both in the cultivation of their vineyards, and in the subsequent

preparation of their wines.

 

Such various and complicated revenue laws are not peculiar to

France. The little duchy of Milan is divided into six provinces,

in each of which there is a different system of taxation, with

regard to several different sorts of consumable goods. The still

smaller territories of the duke of Parma are divided into three

or four, each of which has, in the same manner, a system of its

own. Under such absurd management, nothing but the great

fertility of the soil, and happiness of the climate, could

preserve such countries from soon relapsing into the lowest state

of poverty and barbarism.

 

Taxes upon consumable commodities may either he levied by an

administration, of which the officers are appointed by

govermnent, and are immediately accountable to government, of

which the revenue must, in this case, vary from year to year,

according to the occasional variations in the produce of the tax

; or they may be let in farm for a rent certain, the farmer being

allowed to appoint his own officers, who, though obliged to levy

the tax in the manner directed by the law, are under his

immediate inspection, and are immediately accountable to him. The

best and most frugal way of levying a tax can never be by farm.

Over and above what is necessary for paying the stipulated rent,

the salaries of the officers, and the whole expense of

administration, the farmer must always draw from the produce of

the tax a certain profit, proportioned at least to the advance

which he makes, to the risk which he runs, to the trouble which

he is at, and to the knowledge and skill which it requires to

manage so very complicated a concern. Government, by establishing

an administration under their own immediate inspection, of the

same kind with that which the farmer establishes, might at least

save this profit, which is almost always exorbitant. To farm any

considerable branch of the public revenue requires either a great

capital, or a great credit; circumstances which would alone

restrain the competition for such an undertaking to a very small

number of people. Of the few who have this capital or credit, a

still smaller number have the necessary knowledge or experience;

another circumstance which restrains the competition still

further. The very few who are in condition to become competitors,

find it more for their interest to combine together ; to become

copartners, instead of competitors; and, when the farm is set up

to auction, to offer no rent but what is much below the real

value. In countries where the public revenues are in farm, the

farmers are generally the most opulent people. Their wealth would

alone excite the public indignation; and the vanity which almost

always accompanies such upstart fortunes, the foolish ostentation

with which they commonly display that wealth, excite that

indignation still more.

 

The farmers of the public revenue never find the laws too severe,

which punish any attempt to evade the payment of a tax. They have

no bowels for the contributors, who are not their subjects, and

whose universal bankruptcy, if it should happen the day after the

farm is expired, would not much affect their interest. In the

greatest exigencies of the state, when the anxiety of the

sovereign for the exact payment of his revenue is necessarily the

greatest, they seldom fail to complain, that without laws more

rigorous than those which actually took place, it will be

impossible for them to pay even the usual rent. In those moments

of public distress, their commands cannot he disputed. The

revenue laws, therefore, become gradually more and more severe.

The most sanguinary are always to be found in countries where the

greater part of the public revenue is in farm ; the mildest, in

countries where it is levied under the immediate inspection of

the sovereign. Even a bad sovereign feels more compassion for his

people than can ever be expected from the farmers of his revenue.

He knows that the permanent grandeur of his family depends upon

the prosperity of his people, and he will never knowingly ruin

that prosperity for the sake of any momentary interest of his

own. It is otherwise with the farmers of his revenue, whose

grandeur may frequently be the effect of the ruin, and not of the

prosperity, of his people.

 

A tax is sometimes not only farmed for a certain rent, but the

farmer has, besides, the monopoly of the commodity taxed. In

France, the duties upon tobacco and salt are levied in this

manner. In such cases, the farmer, instead of one, levies two

exorbitant profits upon the people; the profit of the farmer, and

the still more exorbitant one of the monopolist. Tobacco being a

luxury, every man is allowed to buy or not to buy as he chuses ;

but salt being a necessary, every man is obliged to buy of the

farmer a certain quantity of it ; because, if he did not buy this

quantity of the farmer, he would, it is presumed, buy it of some

smuggler. The taxes upon both commodities are exorbitant. The

temptation to smuggle, consequently, is to many people

irresistible; while, at the same time, the rigour of the law, and

the vigilance of the farmer’s officers, render the yielding to

the temptation almost certainly ruinous. The smuggling of

salt and tobacco sends every year several hundred people to the

galleys, besides a very considerable number whom it sends to the

gibbet. Those taxes, levied in this manner, yield a very

considerable revenue to government. In 1767, the farm of tobacco

was let for twenty-two millions five hundred and forty-one

thousand two hundred and seventy-eight livres a-year; that of

salt for thirtysix millions four hundred and ninety-two thousand

four hundred and four livres. The farm, in both cases, was to

commence in 1768, and to last for six years. Those who consider

the blood of the people as nothing, in comparison with the

revenue of the prince, may, perhaps, approve of this method of

levying taxes. Similar taxes and monopolies of salt and

tobacco have been established in many other countries,

particularly in the Austrian and Prussian dominions, and in the

greater part of the states of Italy.

 

In France, the greater part of the actual revenue of the crown is

derived from eight different sources; the taille, the capitation,

the two vingtiemes, the gabelles, the aides, the traites, the

domaine, and the farm of tobacco. The live last are, in the

greater part of the provinces, under farm. The three first are

everywhere levied by an administration, under the immediate

inspection and direction of government ; and it is universally

acknowledged, that in proportion to what they take out of the

pockets of the people, they bring more into the treasury of the

prince than the other five, of which the administration is much

more wasteful and expensive.

 

The finances of France seem, in their present state, to admit of

three very obvious reformations. First, by abolishing the

taille and the capitation, and by increasing the number of the

vingtiemes, so as to produce an additional revenue equal to the

amount of those other taxes, the revenue of the crown might be

preserved; the expense of collection might be much diminished ;

the vexation of the inferior ranks of people, which the taille

and capitation occassion, might be entirely prevented; and the

superior ranks might not be more burdened than the greater part

of them are at present. The vingtieme, I have already observed,

is a tax very nearly of the same kind with what is called the

land tax of England. The burden of the taille, it is

acknowledged, falls finally upon the proprietors of land ; and as

the greater part of the capitation is assessed upon those who are

subject to the taille, at so much a-pound of that other tax, the

final payment of the greater part of it must likewise fall upon

the same order of people. Though the number of the vingtiemes,

therefore, was increased, so as to produce an additional revenue

equal to the amount of both those taxes, the superior ranks of

people might not be more burdened than they are at present; many

individuals, no doubt, would, on account of the great

inequalities with which the taille is commonly assessed upon the

estates and tenants of different individuals. The interest and

opposition of such favoured subjects, are the obstacles most

likely to prevent this, or any other reformation of the same

kind. Secondly, by rendering the gabelle, the aides, the traites,

the taxes upon tobacco, all the different customs and excises,

uniform in all the different parts of the kingdom, those taxes

might be levied at much less expense, and the interior commerce

of the kingdom might be rendered as free as that of England.

Thirdly, and lastly, by subjecting all those taxes to an

administration under the immediate inspection and direction or

government, the exorbitant profits of the farmers-general might

be added to the revenue of the state. The opposition arising from

the private inte rest of individuals, is likely to be as

effectual for preventing the two last as the first-mentioned

scheme of reformation.

 

The French system of taxation seems, in every respect, inferior

to the British. In Great Britain, ten millions sterling are

annually levied upon less than eight millions of people, without

its being possible to say that any particular order is oppressed.

From the Collections of the Abb� Expilly, and the observations of

the author of the Essay upon the Legislation and Commerce of

Corn, it appears probable that France, including the provinces of

Lorraine and Bar, contains about twenty-three or twentyfour

millions of people; three times the number, perhaps, contained in

Great Britain. The soil and climate of France are better than

those of Great Britain. The country has been much longer in a

state of improvement and cultivation, and is, upon that account,

better stocked with all those things which it requires a long

time to raise up and accumulate ; such as great towns, and

convenient and well-built houses, both in town and country. With

these advantages, it might be expected, that in France a revenue

of thirty millions might be levied for the support of the state,

with as little inconvenience as a revenue of ten millions is in

Great Britain. In 1765 and 1766, the whole revenue paid into the

treasury of France, according to the best, though, I acknowledge,

very imperfect accounts which I could get of it, usually run

between 308 and 325 millions of livres ; that is, it did not

amount to fifteen millions sterling; not the half of what might

have been expected, had the people contributed in the same

proportion to their numbers as the people of Great Britain. The

people of France, however, it is generally acknowledged, are much

more oppressed by taxes than the people of Great Britain. France,

however, is certainly the great empire in Europe, which, after

that of Great Britain, enjoys the mildest and most indulgent

government.

 

In Holland, the heavy taxes upon the necessaries of life have

ruined, it is said, their principal manufacturers, and are likely

to discourage, gradually, even their fisheries and their trade in

ship-building. The taxes upon the necessaries of life are

inconsiderable in Great Britain, and no manufacture has hitherto

been ruined by them. The British taxes which bear hardest on

manufactures, are some duties upon the importation of raw

materials, particularly upon that of raw silk. The revenue of the

States-General and of the different cities, however, is said