Chap. IV: Of cumulative Taxes

I shall not here repeat what I have already said concerning the characteristics of this kind of imposition; but after citing some examples, I shall examine it more closely, as to its nature and consequences.

The most familiar examples of it to an Englishman, are tithes, land-tax, window-tax, and poors-rates.

The most familiar examples to a Frenchman, are the Taille, Fourage, and Ustencil, (which go commonly together); also the Capitation, the Dixieme, the Vingtieme, and the Industrie. (3)

The nature of all these taxes, is, to affect the possessions, income, and profits of every individual, without putting it in their power to draw them back in any way whatever; consequently, such taxes tend very little towards enhancing the price of commodities.

Those who come under such taxes, do not always consider that their past industry, gains, or advantages of fortune, are here intended to suffer a diminution, in favour of the state; for which out-going they have, perhaps, made no provision.

When people of the lower classes, instead of being subjected to proportional taxes, are laid under such impositions, there results a great inconvenience. They are allowed to receive the whole profit of their industry, which in the former chapter we called their (B), the state however reserving to itself a claim for a part of it: this, instead of being paid gradually, as in a proportional tax, is collected at the end of the year, when they have made no provision for it, and consequently, they are put to distress.

Besides, how hard is it to deprive them of the power of drawing back what they pay? And how ill judged to trust money with those who are supposed to gain only an easy physical-necessary? An equivalent for procuring the articles of ease and luxury, should not be left in the hands of those who are not permitted to enjoy them.

From this we may conclude, First, That the more such taxes are proportional to the subject taxed; Secondly, the more evident this proportion appears; and Thirdly, the more frequently and regularly such taxes are levied; the more they will resemble proportional taxes, and the less burden will be found in paying them. Let me illustrate this by some examples.

The stoppage upon a soldier's pay, either for the invalids, or Chelsea, is a cumulative tax; but the method of levying it gives it all the advantages of one of the proportional kind. First, It bears an exact and determinate proportion to the value of his pay. Secondly, This proportion he knows perfectly. And Thirdly, Instead of receiving the whole into his own possession, and paying the hospital at the end of the year, it is regularly and gradually retained from him at every payment.

Tithes are a cumulative tax; but they are accompanied with all the three requisites to make them light; although in other respects they are excessively burdensome. First, They bear an exact proportion to the crop. Secondly, This proportion is perfectly known. Thirdly, Nature, and not the labourer, makes the provision. But they fall upon an improper object: they affect the whole produce of the land, and not the surplus; which last is the only fund that ought to be taxed, as has been said.

The land-tax in Scotland bears, First, a very determinate proportion to the valuation of the land; and has, Secondly, the advantage of being well known to every contributor., so that provision may easily be made for it. But the third requisite is wanting: the proprietor having the public money in his hands, often applies it to private purposes; and when the demand is made upon him, he is put to distress.

The taille, in many provinces of France, bears, first, a very exact proportion to the value of the land. (4)

But in the second place, the proportion is entirely unknown to the man who pays it; being nowhere to be seen but in the offices of the intendant and his deputies.

And in the last place, the whole payment comes at once.

What hides, and consequently destroys this proportion with respect to the French taille tariffée, is, that if after the first distribution is laid on, as in Scotland, at so many shillings in the pound of valuation, the full sum intended to be raised do not come in; either because the intendant has given exemptions to certain parishes, on account of the accidents of sterility, hail, mortality among the cattle, and the like; or because the property of a part of the parish has fallen into the hands of people exempted from the taille; or lastly that others, who were really bound to pay a part of it, are become insolvent. The intendant must then make a second, and perhaps a third general distribution of the deficiency upon all the former contributors, in the most exact proportion indeed to the valuation of the lands, but yet by the nature of it impossible to be foreseen. It is for these reasons chiefly that the taille in that kingdom is so grievous.

These second distributions of the tax, First, destroy the proportion between the tax and the revenue taxed. Secondly, They make it impossible to judge of the amount of them. And lastly, the demand comes at once, when, perhaps, the money has been otherwise applied.

The French tax upon industry is more grievous still; because none of the three requisites above-mentioned are allowed to operate.

This tax is supposed to be proportional to the profits made upon trade, and other branches of industry, not having the land for their object. All merchants and tradesmen, in cities, and in the country, pay the tax called Industrie; and the reason given for establishing this tax, as I have said in another place, is in order to make every individual in the state contribute to the expence of it, in proportion to the advantages he reaps. Nothing would be more just, could it be put in execution, without doing greater hurt to the state, than the revenue drawn from it can do good.

I shall now shew how, in this tax, all the three requisites we have mentioned are wanting.

First, by its nature, it can bear no exact proportion to the profits of the industrious man; since nobody but the person taxed can so much as guess at their extent.

Secondly, It cannot possibly be provided for, as no check can be put upon the imposer, unless as far as general rules are laid down for each class of the industrious; and from these again other inconveniences flow, as shall be observed.

Thirdly, It comes at once upon poor people, who have been frequently forced to beg for want of employment before the tax-gatherer could make his demand; and those who remain, frequently become beggars before they can comply with it.

I say, that from the general rules laid down for regulating this tax, as to every class, a workman who has a large family to maintain, is no less taxed than one who has no charge but himself: and it will be allowed, I believe, that the profits of one industrious person of the lower classes, is in no country sufficient to pay any considerable tax, and maintain a large family, much less a sickly one. I therefore imagine, that cumulative taxes never should be raised upon such classes of inhabitants as have no income but their personal industry, which is so frequently precarious.

Merchants also ought not to be subjected to any tax upon their industry. They ought to be allowed to accumulate riches as fast as they, can: because they employ them for the advancement of industry; and every deduction from their profits is a diminution upon this so useful a fund.

When cumulative taxes are laid upon any of the industrious classes, they tend to check growing wealth; and are most commonly imposed in monarchical states, where riches are apt to excite jealousy, as has been observed.

But as to the class of land proprietors, that is to say, the more wealthy inhabitants, who live upon a revenue already made, the impropriety of cumulative taxes is much less. They are however burdensome, and disagreeable in all cases, and ought to be dispensed with, when the necessary supplies can be made out by proportional taxes, without raising the prices of labour too high for the prosperity of foreign trade.

From the examples I have given of this branch of taxation, I hope the nature of it may be fully understood, and that for the future no inconvenience will arise from my employing the term of cumulative tax.

I shall now subjoin its definition. A cumulative tax, is the accumulation of that return which every individual, who enjoys any superfluity, owes daily to the state, for the advantages he receives by living in the society. As this definition would not have been understood at setting out, I thought it proper, first, to explain the nature of the thing to be defined.