Book XIII.
Of the Relation Which the Levying of Taxes and the Greatness of the
Public Revenues Bear to Liberty.
13.1. 1. Of the Public Revenues.
The public revenues are a portion that each subject gives of his
property, in order to secure or enjoy the remainder.
To fix these revenues in a proper manner, regard should be had both
to the necessities of the state and to those of the subject. The real
wants of the people ought never to give way to the imaginary wants of
the state.
Imaginary wants are those which flow from the passions and the
weakness of the governors, from the vain conceit of some extraordinary
project, from the inordinate desire of glory, and from a certain
impotence of mind incapable of withstanding the impulse of fancy. Often
have ministers of a restless disposition imagined that the wants of
their own mean and ignoble souls were those of the state.
Nothing requires more wisdom and prudence than the regulation of
that portion of which the subject is deprived, and that which he is
suffered to retain.
The public revenues should not be measured by the people's abilities
to give, but by what they ought to give; and if they are measured by
their abilities to give, it should be considered what they are able to
give for a constancy.
13.2. 2. That it is bad Reasoning to say that the Greatness of Taxes is
good in its own Nature.
There have been instances in particular
monarchies of petty states exempt from taxes that have been as miserable
as the circumjacent places which groaned under the weight of exactions.
The chief reason of this is, that the petty state can hardly have any
such thing as industry, arts, or manufactures, because of its being
subject to a thousand restraints from the great state by which it is
environed. The great state is blessed with industry, manufactures, and
arts, and establishes laws by which those several advantages are
procured. The petty state becomes, therefore, necessarily poor, let it
pay never so few taxes.
And yet some have concluded from the poverty of those petty states
that in order to render the people industrious they should be loaded
with taxes. But it would be a juster inference, that they ought to pay
no taxes at all. None live here but wretches who retire from the
neighbouring parts to avoid working — wretches who, disheartened by
labour, make their whole felicity consist in idleness.
The effect of wealth in a country is to inspire every heart with
ambition: that of poverty is to give birth to despair. The former is
excited by labour, the latter is soothed by indolence.
Nature is just to all mankind, and repays them for their industry:
she renders them industrious by annexing rewards in proportion to their
labour. But if an arbitrary prince should attempt to deprive the people
of nature's bounty, they would fall into a disrelish of industry; and
then indolence and inaction must be their only happiness.
13.3. 3. Of Taxes in Countries where Part of the People are Villains or
Bondmen.
The state of villainage is sometimes established after a
conquest. In that case, the bondman or villain that tills the land ought
to have a kind of partnership with his master. Nothing but a
communication of loss or profit can reconcile those who are doomed to
labour to such as are blessed with a state of affluence.
13.4. 4. Of a Republic in the like Case.
When a republic has reduced a nation to the drudgery of cultivating her lands,
she ought never to suffer the free subject to have the power of increasing the
tribute of the bondman. This was not permitted at Sparta. Those brave people
thought the Helotes
[1]
would be more industrious in cultivating their lands, and knowing that their
servitude was not to increase; they imagined, likewise, that the masters would
be better citizens, when they desired no more than what they were accustomed to enjoy.
Footnotes
[1]
Plutarch, "Notable Sayings of the Lacedæmonians."
13.5. 5. Of a Monarchy in the like Case.
When the nobles of a monarchical state cause the lands to be cultivated
for their own use by a conquered people, they ought never to have the power
of increasing the service or tribute.
[2]
Besides, it is right the prince should be satisfied with his
own demesne and the military service. But if he wants to raise taxes on
the vassals of his nobility, the lords of the several districts ought to
be answerable for the tax,
[3]
and be obliged to pay it for the vassals,
by whom they may be afterwards reimbursed. If this rule be not followed,
the lord and the collectors of the public taxes will harass the poor
vassal by turns till he perishes with misery or flies into the woods.
Footnotes
[2]
This is what induced Charlemagne to make his excellent
institution upon this head. See the fifth book of the "Capitularies," art.
303.
[3]
This is the practice in Germany.
13.6. 6. Of a despotic Government in the like Case.
The foregoing rule is
still more indispensably necessary in a despotic government. The lord
who is every moment liable to be stripped of his lands and his vassals
is not so eager to preserve them.
When Peter I thought proper to follow the custom of Germany, and to
demand his taxes in money, he made a very prudent regulation, which is
still followed in Russia. The gentleman levies the tax on the peasant,
and pays it to the Czar. If the number of peasants diminishes, he pays
all the same; if it increases, he pays no more; so that it is his
interest not to worry or oppress his vassals.
13.7. 7. Of Taxes in Countries where Villainage is not established.
When the inhabitants of a state are all free subjects, and each man enjoys
his property with as much right as the prince his sovereignty, taxes may
then be laid either on persons, on lands, on merchandise, on two of
these, or on all three together.
In the taxing of persons, it would be an unjust proportion to
conform exactly to that of property. At Athens the people were divided
into four classes.
[4]
Those who drew five hundred measures of liquid or
dried fruit from their estates paid a talent
[5]
to the public; those who
drew three hundred measures paid half a talent; those who had two
hundred measures paid ten min; those of the fourth class paid nothing at
all. The tax was fair, though it was not proportionable: if it did not
follow the measure of people's property, it followed that of their
wants. It was judged that every man had an equal share of what was
necessary for nature, that whatsoever was necessary for nature ought not
to be taxed; that to this succeeded the useful, which ought to be taxed,
but less than the superfluous; and that the largeness of the taxes on
what was superfluous prevented superfluity.
In the taxing of lands it is customary to make lists or registers,
in which the different classes of estates are ranged. But it is very
difficult to know these differences, and still more so to find people
that are not interested in mistaking them. Here, therefore, are two
sorts of injustice, that of the man and that of the thing. But if in
general the tax be not exorbitant, and the people continue to have
plenty of necessaries, these particular acts of injustice will do no
harm. On the contrary, if the people are permitted to enjoy only just
what is necessary for subsistence, the least disproportion will be of
the greatest consequence.
If some subjects do not pay enough, the mischief is not so great;
their convenience and ease turn always to the public advantage; if some
private people pay too much, their ruin redounds to the public
detriment. If the government proportions its fortune to that of
individuals, the ease and convenience of the latter will soon make its
fortune rise. The whole depends upon a critical moment: shall the state
begin with impoverishing the subjects to enrich itself? Or had it better
wait to be enriched by its subjects? Is it more advisable for it to have
the former or the latter advantage? Which shall it choose — to begin or
to end with opulence?
The duties felt least by the people are those on merchandise,
because they are not demanded of them in form. They may be so prudently
managed that the people themselves shall hardly know they pay them. For
this purpose it is of the utmost consequence that the person who sells
the merchandise should pay the duty. He is very sensible that he does
not pay it for himself; and the consumer, who pays it in the main,
confounds it with the price. Some authors have observed that Nero had
abolished the duty of the five-and-twentieth part arising from the sale
of slaves;
[6]
and yet he had only ordained that it should be paid by the
seller instead of the purchaser; this regulation, which left the impost
entire, seemed nevertheless to suppress it.
There are two states in Europe where the imposts are very heavy upon
liquors: in one the brewer alone pays the duty, in the other it is
levied indiscriminately upon all the consumers; in the first nobody
feels the rigour of the impost, in the second it is looked upon as a
grievance; in the former the subject is sensible only of the liberty he
has of not paying, in the latter he feels only the necessity that
compels him to pay.
Further, the obliging the consumers to pay requires a perpetual
rummaging and searching into their houses. Now nothing is more contrary
than this to liberty; and those who establish these sorts of duties have
not surely been so happy as to hit upon the best method of collecting
the revenue.
Footnotes
[4]
Pollux, viii. 10, art. 130.
[6]
Tacitus, "Annals," lib. xiii, p. 31.
13.8. 8. In what Manner the Deception is preserved.
In order to make the
purchaser confound the price of the commodity with the impost, there
must be some proportion between the impost and the value of the
commodity: for which reason there ought not to be an excessive duty upon
merchandise of little value. There are countries in which the duty
exceeds seventeen or eighteen times the value of the commodity. In this
case the prince removes the disguise: his subjects plainly see they are
dealt with in an unreasonable manner, which renders them most
exquisitely sensible of their servile condition.
Besides, the prince, to be able to levy a duty so disproportioned to
the value of the commodity, must be himself the vendor, and the people
must not have it in their power to purchase it elsewhere: a practice
subject to a thousand inconveniences.
Smuggling being in this case extremely lucrative, the natural and
most reasonable penalty, namely, the confiscation of the merchandise,
becomes incapable of putting a stop to it; especially as this very
merchandise is intrinsically of inconsiderable value. Recourse must
therefore be had to extravagant punishments, such as those inflicted for
capital crimes.
All proportion then of penalties is at an end. Persons that cannot
really be considered as vicious are punished like the most infamous
criminals; which of all things in the world is the most contrary to the
spirit of a moderate government.
Again, in proportion as people are tempted to cheat the farmer of
the revenues, the more the latter is enriched, and the former
impoverished. To put a stop to smuggling, the farmer must be invested
with extraordinary means of oppressing, and then the country is ruined.
13.9. 9. Of a bad Kind of Impost.
We shall here, by the way, take notice
of an impost laid in particular countries on the different articles of
civil contracts. As these are things subject to very nice disquisitions,
a vast deal of knowledge is necessary to make any tolerable defence
against the farmer of the revenues, who interprets, in that case, the
regulations of the prince, and exercises an arbitrary power over
people's fortunes. Experience has demonstrated that a duty on the paper
on which the deeds are drawn would be of far greater service.
13.10. 10. That the Greatness of Taxes depends on the Nature of the
Government.
Taxes ought to be very light in despotic governments:
otherwise who would be at the trouble of tilling the land? Besides, how
is it possible to pay heavy duties in a government that makes no manner
of return to the different contributions of the subject?
The exorbitant power of the prince, and the extreme depression of
the people, require that there should not be even a possibility of the
least mistake between them. The taxes ought to be so easy to collect,
and so clearly settled, as to leave no opportunity for the collectors to
increase or diminish them. A portion of the fruits of the earth, a
capitation, a duty of so much per cent on merchandise, are the only
taxes suitable to that government.
Merchants in despotic countries ought to have a personal safeguard,
to which all due respect should be paid. Without this they would be too
weak to dispute with the custom-house officers.
13.11. 11. Of Confiscations.
With respect to confiscations, there is one
thing very particular that, contrary to the general custom, they are
more severe in Europe than in Asia. In Europe not only the merchandise,
but even sometimes the ships and carriages, are confiscated; which is
never practised in Asia. This is because in Europe the merchant can have
recourse to magistrates, who are able to shelter him from oppression; in
Asia the magistrates themselves would be the greatest oppressors. What
remedy could a merchant have against a pasha who was determined to
confiscate his goods?
The prince, therefore, checks his own power, finding himself under
the necessity of acting with some kind of lenity. In Turkey they raise
only a single duty for the importation of goods, and afterwards the
whole country is open to the merchant. Smuggling is not attended with
confiscation or increase of duty. In China
[7]
they never look into the
baggage of those who are not merchants. Defrauding the customs in the
territory of the Mogul is not punished with confiscation, but with
doubling the duty. The princes of Tartary, who reside in towns, impose
scarcely any duty at all on the goods that pass through their
country.
[8]
In Japan, it is true, to cheat the customs is a capital
crime; but this is because they have particular reasons for prohibiting
all communication with foreigners; hence the fraud
[9]
is rather a contravention of the laws made for the security of the government than
of those of commerce.
Footnotes
[7]
Father Du Halde, ii, p. 37.
[8]
"History of the Tartars," part III, p. 290.
[9]
Being willing to trade with foreigners without having any
communication with them, they have pitched upon two nations for that
purpose — the Dutch for the commerce of Europe, and the Chinese for
that of Asia; they confine the factors and sailors in a kind of prison,
and lay such a restraint upon them as tires their patience.
13.12. 12. Relation between the Weight of Taxes and Liberty.
It is a general rule that taxes may be heavier in proportion to the liberty of
the subject, and that there is a necessity for reducing them in
proportion to the increase of slavery. This has always been and always
will be the case. It is a rule derived from nature that never varies. We
find it in all parts — in England, in Holland, and in every state where
liberty gradually declines, till we come to Turkey. Switzerland seems to
be an exception to this rule, because they pay no taxes; but the
particular reason for that exemption is well known, and even confirms
what I have advanced. In those barren mountains provisions are so dear,
and the country is so populous, that a Swiss pays four times more to
nature than a Turk does to the sultan.
A conquering people, such as were formerly the Athenians and the
Romans, may rid themselves of all taxes as they reign over vanquished
nations. Then indeed they do not pay in proportion to their liberty,
because in this respect they are no longer a people, but a monarch.
But the general rule still holds good. In moderate governments there
is an indemnity for the weight of the taxes, which is liberty. In
despotic countries
[10]
there is an equivalent for liberty, which is the
lightness of the taxes.
In some monarchies in Europe there are particular provinces
[11]
which from the very nature of their civil government are in a more
flourishing condition than the rest. It is pretended that these
provinces are not sufficiently taxed, because through the goodness of
their government they are able to be taxed higher; hence the ministers
seem constantly to aim at depriving them of this very government, whence
a diffusive blessing is derived, which redounds even to the prince's
advantage.
Footnotes
[10]
In Russia the taxes are but small; they have been increased
since the despotic power of the prince is exercised with more
moderation. See the "History of the Tartars," part II.
[11]
The Pais d'etats, where the states of the province assemble to
deliberate on public affairs.
13.13. 13. In what Government Taxes are capable of Increase.
Taxes may be increased in most republics, because the citizen, who thinks he is
paying himself, cheerfully submits to them, and moreover is generally
able to bear their weight, from the nature of the government.
In a monarchy taxes may be increased, because the moderation of the
government is capable of procuring opulence: it is a recompense, as it
were, granted to the prince for the respect he shows to the laws. In
despotic governments they cannot be increased, because there can be no
increase of the extremity of slavery.
13.14. 14. That the Nature of the Taxes is in Relation to the Government.
A capitation is more natural to slavery; a duty on merchandise is more
natural to liberty, by reason it has not so direct a relation to the
person.
It is natural in a despotic government for the prince not to give
money to his soldiers, or to those belonging to his court; but to
distribute lands amongst them, and of course that there should be very
few taxes. But if the prince gives money, the most natural tax he can
raise is a capitation, which can never be considerable. For as it is
impossible to make different classes of the contributors, because of the
abuses that might arise thence, considering the injustice and violence
of the government, they are under an absolute necessity of regulating
themselves by the rate of what even the poorest and most wretched are
able to contribute.
The natural tax of moderate governments is the duty laid on
merchandise. As this is really paid by the consumer, though advanced by
the merchant, it is a loan which the latter has already made to the
former. Hence the merchant must be considered on the one side as the
general debtor of the state, and on the other as the creditor of every
individual. He advances to the state the duty which the consumer will
sometime or other refund: and he has paid for the consumer the duty
which he has advanced for the merchandise. It is therefore obvious that
in proportion to the moderation of the government, to the prevalence of
the spirit of liberty, and to the security of private fortunes, a
merchant has it in his power to advance money to the state, and to pay
considerable duties for individuals. In England a merchant lends really
to the government fifty or sixty pounds sterling for every tun of wine
he imports. Where is the merchant that would dare do any such thing in a
country like Turkey? And were he so presumptuous, how could he do it
with a crazy or shattered fortune?
13.15. 15. Abuse of Liberty.
To these great advantages of liberty it is
owing that liberty itself has been abused. Because a moderate government
has been productive of admirable effects, this moderation has been laid
aside; because great taxes have been raised, they wanted to carry them
to excess; and ungrateful to the hand of liberty, of whom they received
this present, they addressed themselves to slavery, who never grants the
least favour.
Liberty produces excessive taxes; the effect of excessive taxes is
slavery; and slavery produces a diminution of tribute.
Most of the edicts of the eastern monarchs are to exempt every year
some province of their empire from paying tribute.
[12]
The manifestations of their wills are favours. But in Europe the edicts of
princes are disagreeable even before they are seen, because they always
make mention of their own wants, but not a word of ours.
From an unpardonable indolence in the ministers of those countries,
owing to the nature of the government, and frequently to the climate,
the people derive this advantage, that they are not incessantly plagued
with new demands. The public expense does not increase, because the
ministers do not form new projects: and if some by chance are formed,
they are such as are soon executed. The governors of the state do not
perpetually torment the people, for they do not perpetually. torment
themselves. But it is impossible there should be any fixed rule in our
finances, since we always know that we shall have something or other to
execute, without ever knowing what it is.
It is no longer customary with us to give the appellation of a great
minister to a wise dispenser of the public revenues, but to a person of
dexterity and cunning, who is clever at finding out what we call the
ways and means.
Footnotes
[12]
This is the practice of the emperors of China.
13.16. 16. Of the Conquests of the Mahometans.
It was this excess of taxes
[13]
that occasioned the prodigious facility with which the
Mahometans carried on their conquests. Instead of a continual series of
extortions devised by the subtle avarice of the Greek emperors, the
people were subjected to a simple tribute which was paid and collected
with ease. Thus they were far happier in obeying a barbarous nation
than a corrupt government, in which they suffered every inconvenience of
lost liberty, with all the horror of present slavery.
Footnotes
[13]
See in history the greatness, the oddity, and even the folly of
those taxes. Anastasius invented a tax for breathing, "ut quisque pro
haustu ris penderet."
13.17. 17. Of the Augmentation of Troops.
A new distemper has spread itself
over Europe, infecting our princes, and inducing them to keep up an
exorbitant number of troops. It has its redoublings, and of necessity
becomes contagious. For as soon as one prince augments his forces, the
rest of course do the same; so that nothing is gained thereby but the
public ruin. Each monarch keeps as many armies on foot as if his people
were in danger of being exterminated: and they give the name of
peace
[14]
to this general effort of all against all. Thus is Europe
ruined to such a degree that were private people to be in the same
situation as the three most opulent powers of this part of the globe,
they would not have necessary subsistence. We are poor with the riches
and commerce of the whole world; and soon, by thus augmenting our
troops, we shall be all soldiers, and be reduced to the very same
situation as the Tartars.
[15]
Great princes, not satisfied with hiring or buying troops of petty
states, make it their business on all sides to pay subsidies for
alliances, that is, generally to throw away their money.
The consequence of such a situation is the perpetual augmentation of
taxes; and the mischief which prevents all future remedy is that they
reckon no more upon their revenues, but in waging war against their
whole capital. It is no unusual thing to see governments mortgage their
funds even in time of peace, and to employ what they call extraordinary
means to ruin themselves — means so extraordinary indeed, that such are
hardly thought of by the most extravagant young spendthrift.
Footnotes
[14]
True it is that this state of effort is the chief support of the
balance, because it checks the great powers.
[15]
All that is wanting for this is to improve the new invention of
the militia established in most parts of Europe, and carry it to the
same excess as they do the regular troops.
13.18. 18. Of an Exemption from Taxes.
The maxim of the great eastern
empires, of exempting such provinces as have very much suffered from
taxes, ought to be extended to monarchical states. There are some,
indeed, where this practice is established; yet the country is more
oppressed than if no such rule took place; because as the prince levies
still neither more nor less, the state becomes bound for the whole. In
order to ease a village that pays badly, they load another that pays
better; the former is not relieved, and the latter is ruined. The people
grow desperate, between the necessity of paying for fear of exactions,
and the danger of paying for fear of new burdens.
A well-regulated government ought to set aside, for the first
article of its expense, a determinate sum to answer contingent cases. It
is with the public as with individuals, who are ruined when they live up
exactly to their income.
With regard to an obligation for the whole amongst the inhabitants
of the same village, some pretend
[16]
that it is but reasonable, because
there is a possibility of a fraudulent combination on their side: but
was it ever heard that, upon mere supposition, we are to establish a
thing in itself unjust and ruinous to the state?
Footnotes
[16]
See a treatise on the "Roman Finances," chap. 2, Paris, 1740.
13.19. 19. Which is more suitable to the Prince and to the People, the
farming the Revenues, or managing them by Commission?
The managing of the revenues by commission is like the conduct of a good father of a
family, who collects his own rents himself with economy and order.
By this management of the revenues the prince is at liberty to press
or to retard the levy of the taxes, either according to his own wants or
to those of his people. By this he saves to the state the immense
profits of the farmers, who impoverish it in a thousand ways. By this he
prevents the people from being mortified with the sight of sudden
fortunes. By this the public money passes through few hands, goes
directly to the treasury, and consequently makes a quicker return to the
people. By this the prince avoids an infinite number of bad laws
extorted from him by the importunate avarice of the farmers, who pretend
to offer a present advantage for regulations pernicious to posterity.
As the moneyed man is always the most powerful, the farmer renders
himself arbitrary even over the prince himself; he is not the
legislator, but he obliges the legislator to give laws.
I acknowledge that it is sometimes of use to farm out a new duty,
for there is an art in preventing frauds, which motives of interest
suggest to the farmers, but commissioners never think of. Now the manner
of levying it being once established by the farmer, it may afterwards be
safely entrusted to a commission. In England the management of the
Excise and of the Post-office was borrowed from that of the farmers of
the revenue.
In republics the revenues of the state are generally managed by
commission. The contrary practice was a great defect in the Roman
government.
[17]
In despotic governments the people are infinitely
happier where this management is established — witness Persia and
China.
[18]
The unhappiest of all are those where the prince farms out
his sea-ports and trading cities. The history of monarchies abounds with
mischiefs done by the farmers of the revenue.
Incensed at the oppressive extortions of the publicans, Nero formed
a magnanimous but impracticable scheme of abolishing all kinds of
imposts. He did not think of managing the revenues by commissioners,
but he made four edicts:
[19]
that the laws enacted against publicans,
which had hitherto been kept secret, should be promulgated; that they
should exact no claims for above a year backward; that there should be a
prætor established to determine their pretensions without any formality;
and that the merchants should pay no duty for their vessels. These were
the halcyon days of that emperor.
Footnotes
[17]
Cæsar was obliged to remove the publicans from the province of
Asia, and to establish there another kind of regulation, as we learn
from Dio, xlii. 6; and Tacitus, "Annals," i. 76, informs us that Macedonia
and Achaia, provinces left by Augustus to the people of Rome, and
consequently governed pursuant to the ancient plan, obtained to be of
the number of those which the emperor governed by his officers.
[18]
See Sir John Chardin's "Travels through Persia," vi.
[19]
Tacitus, "Annals," xiii. 51.
13.20. 20. Of the Farmers of the Revenues.
When the lucrative profession of
a farmer of the revenue becomes likewise a post of honour, the state is
ruined. It may do well enough in despotic governments, where this
employment is often
times exercised by the governors themselves. But it is by no means
proper in a republic, since a custom of the like nature destroyed that
of Rome. Nor is it better in monarchies, nothing being more opposite to
the spirit of this government. All the other orders of the state are
dissatisfied; honour loses its whole value; the gradual and natural
means of distinction are no longer respected; and the very principle of
the government is subverted.
It is true indeed that scandalous fortunes were raised in former
times; but this was one of the calamities of the Fifty Years' War. These
riches were then considered as ridiculous; now we admire them.
Every profession has its particular lot. That of the tax-gatherers
is wealth; and wealth is its own reward. Glory and honour fall to the
share of that nobility who are sensible of no other happiness. Respect
and esteem are for those ministers and magistrates whose whole life is a
continued series of labour, and who watch day and night over the welfare
of the empire.
