Chapter LXII: Part II: Of Taxes (2)

Though, in many different countries of Europe, taxes have been imposed
upon the rent of houses, I do not know of any in which ground-rents have
been considered as a separate subject of taxation. The contrivers of taxes
have, probably, found some difficulty in ascertaining what part of the
rent ought to be considered as ground-rent, and what part ought to be
considered as building-rent. It should not, however, seem very difficult
to distinguish those two parts of the rent from one another.

In Great Britain the rent of houses is supposed to be taxed in the same
proportion as the rent of land, by what is called the annual land tax. The
valuation, according to which each different parish and district is
assessed to this tax, is always the same. It was originally extremely
unequal, and it still continues to be so. Through the greater part of the
kingdom this tax falls still more lightly upon the rent of houses than
upon that of land. In some few districts only, which were originally rated
high, and in which the rents of houses have fallen considerably, the land
tax of three or four shillings in the pound is said to amount to an equal
proportion of the real rent of houses. Untenanted houses, though by law
subject to the tax, are, in most districts, exempted from it by the favour
of the assessors; and this exemption sometimes occasions some little
variation in the rate of particular houses, though that of the district is
always the same. Improvements of rent, by new buildings, repairs, etc. go
to the discharge of the district, which occasions still further variations
in the rate of particular houses.

In the province of Holland, {Memoires concernant les Droits, etc. p. 223.}
every house is taxed at two and a-half per cent. of its value, without any
regard, either to the rent which it actually pays, or to the circumstance
of its being tenanted or untenanted. There seems to be a hardship in
obliging the proprietor to pay a tax for an untenanted house, from which
he can derive no revenue, especially so very heavy a tax. In Holland,
where the market rate of interest does not exceed three per cent., two and
a-half per cent. upon the whole value of the house must, in most cases,
amount to more than a third of the building-rent, perhaps of the whole
rent. The valuation, indeed, according to which the houses are rated,
though very unequal, is said to be always below the real value. When a
house is rebuilt, improved, or enlarged, there is a new valuation, and the
tax is rated accordingly.

The contrivers of the several taxes which in England have, at different
times, been imposed upon houses, seem to have imagined that there was some
great difficulty in ascertaining, with tolerable exactness, what was the
real rent of every house. They have regulated their taxes, therefore,
according to some more obvious circumstance, such as they had probably
imagined would, in most cases, bear some proportion to the rent.

The first tax of this kind was hearth-money; or a tax of two shillings
upon every hearth. In order to ascertain how many hearths were in the
house, it was necessary that the tax-gatherer should enter every room in
it. This odious visit rendered the tax odious. Soon after the Revolution,
therefore, it was abolished as a badge of slavery.

The next tax of this kind was a tax of two shillings upon every
dwelling-house inhabited. A house with ten windows to pay four shillings
more. A house with twenty windows and upwards to pay eight shillings. This
tax was afterwards so far altered, that houses with twenty windows, and
with less than thirty, were ordered to pay ten shillings, and those with
thirty windows and upwards to pay twenty shillings. The number of windows
can, in most cases, be counted from the outside, and, in all cases,
without entering every room in the house. The visit of the tax-gatherer,
therefore, was less offensive in this tax than in the hearth-money.

This tax was afterwards repealed, and in the room of it was established
the window-tax, which has undergone two several alterations and
augmentations. The window tax, as it stands at present (January 1775),
over and above the duty of three shillings upon every house in England,
and of one shilling upon every house in Scotland, lays a duty upon every
window, which in England augments gradually from twopence, the lowest rate
upon houses with not more than seven windows, to two shillings, the
highest rate upon houses with twenty-five windows and upwards.

The principal objection to all such taxes is their inequality; an
inequality of the worst kind, as they must frequently fall much heavier
upon the poor than upon the rich. A house of ten pounds rent in a country
town, may sometimes have more windows than a house of five hundred pounds
rent in London; and though the inhabitant of the former is likely to be a
much poorer man than that of the latter, yet, so far as his contribution
is regulated by the window tax, he must contribute more to the support of
the state. Such taxes are, therefore, directly contrary to the first of
the four maxims above mentioned. They do not seem to offend much against
any of the other three.

The natural tendency of the window tax, and of all other taxes upon
houses, is to lower rents. The more a man pays for the tax, the less, it
is evident, he can afford to pay for the rent. Since the imposition of the
window tax, however, the rents of houses have, upon the whole, risen more
or less, in almost every town and village of Great Britain, with which I
am acquainted. Such has been, almost everywhere, the increase of the
demand for houses, that it has raised the rents more than the window tax
could sink them; one of the many proofs of the great prosperity of the
country, and of the increasing revenue of its inhabitants. Had it not been
for the tax, rents would probably have risen still higher.

ARTICLE II.—Taxes upon Profit, or upon the Revenue arising from
Stock.

The revenue or profit arising from stock naturally divides itself into two
parts; that which pays the interest, and which belongs to the owner of the
stock; and that surplus part which is over and above what is necessary for
paying the interest.

This latter part of profit is evidently a subject not taxable directly. It
is the compensation, and, in most cases, it is no more than a very
moderate compensation for the risk and trouble of employing the stock. The
employer must have this compensation, otherwise he cannot, consistently
with his own interest, continue the employment. If he was taxed directly,
therefore, in proportion to the whole profit, he would be obliged either
to raise the rate of his profit, or to charge the tax upon the interest of
money; that is, to pay less interest. If he raised the rate of his profit
in proportion to the tax, the whole tax, though it might be advanced by
him, would be finally paid by one or other of two different sets of
people, according to the different ways in which he might employ the stock
of which he had the management. If he employed it as a farming stock, in
the cultivation of land, he could raise the rate of his profit only by
retaining a greater portion, or, what comes to the same thing, the price
of a greater portion, of the produce of the land; and as this could be
done only by a reduction of rent, the final payment of the tax would fall
upon the landlord. If he employed it as a mercantile or manufacturing
stock, he could raise the rate of his profit only by raising the price of
his goods; in which case, the final payment of the tax would fall
altogether upon the consumers of those goods. If he did not raise the rate
of his profit, he would be obliged to charge the whole tax upon that part
of it which was allotted for the interest of money. He could afford less
interest for whatever stock he borrowed, and the whole weight of the tax
would, in this case, fall ultimately upon the interest of money. So far as
he could not relieve himself from the tax in the one way, he would be
obliged to relieve himself in the other.

The interest of money seems, at first sight, a subject equally capable of
being taxed directly as the rent of land. Like the rent of land, it is a
neat produce, which remains, after completely compensating the whole risk
and trouble of employing the stock. As a tax upon the rent of land cannot
raise rents, because the neat produce which remains, after replacing the
stock of the farmer, together with his reasonable profit, cannot be
greater after the tax than before it, so, for the same reason, a tax upon
the interest of money could not raise the rate of interest; the quantity
of stock or money in the country, like the quantity of land, being
supposed to remain the same after the tax as before it. The ordinary rate
of profit, it has been shewn, in the first book, is everywhere regulated
by the quantity of stock to be employed, in proportion to the quantity of
the employment, or of the business which must be done by it. But the
quantity of the employment, or of the business to be done by stock, could
neither be increased nor diminished by any tax upon the interest of money.
If the quantity of the stock to be employed, therefore, was neither
increased nor diminished by it, the ordinary rate of profit would
necessarily remain the same. But the portion of this profit, necessary for
compensating the risk and trouble of the employer, would likewise remain
the same; that risk and trouble being in no respect altered. The residue,
therefore, that portion which belongs to the owner of the stock, and which
pays the interest of money, would necessarily remain the same too. At
first sight, therefore, the interest of money seems to be a subject as fit
to be taxed directly as the rent of land.

There are, however, two different circumstances, which render the interest
of money a much less proper subject of direct taxation than the rent of
land.

First, the quantity and value of the land which any man possesses, can
never be a secret, and can always be ascertained with great exactness. But
the whole amount of the capital stock which he possesses is almost always
a secret, and can scarce ever be ascertained with tolerable exactness. It
is liable, besides, to almost continual variations. A year seldom passes
away, frequently not a month, sometimes scarce a single day, in which it
does not rise or fall more or less. An inquisition into every man’s
private circumstances, and an inquisition which, in order to accommodate
the tax to them, watched over all the fluctuations of his fortune, would
be a source of such continual and endless vexation as no person could
support.

Secondly, land is a subject which cannot be removed; whereas stock easily
may. The proprietor of land is necessarily a citizen of the particular
country in which his estate lies. The proprietor of stock is properly a
citizen of the world, and is not necessarily attached to any particular
country. He would be apt to abandon the country in which he was exposed to
a vexatious inquisition, in order to be assessed to a burdensome tax; and
would remove his stock to some other country, where he could either carry
on his business, or enjoy his fortune more at his ease. By removing his
stock, he would put an end to all the industry which it had maintained in
the country which he left. Stock cultivates land; stock employs labour. A
tax which tended to drive away stock from any particular country, would so
far tend to dry up every source of revenue, both to the sovereign and to
the society. Not only the profits of stock, but the rent of land, and the
wages of labour, would necessarily be more or less diminished by its
removal.

The nations, accordingly, who have attempted to tax the revenue arising
from stock, instead of any severe inquisition of this kind, have been
obliged to content themselves with some very loose, and, therefore, more
or less arbitrary estimation. The extreme inequality and uncertainty of a
tax assessed in this manner, can be compensated only by its extreme
moderation; in consequence of which, every man finds himself rated so very
much below his real revenue, that he gives himself little disturbance
though his neighbour should be rated somewhat lower.

By what is called the land tax in England, it was intended that the stock
should be taxed in the same proportion as land. When the tax upon land was
at four shillings in the pound, or at one-fifth of the supposed rent, it
was intended that stock should be taxed at one-fifth of the supposed
interest. When the present annual land tax was first imposed, the legal
rate of interest was six per cent. Every hundred pounds stock,
accordingly, was supposed to be taxed at twenty-four shillings, the fifth
part of six pounds. Since the legal rate of interest has been reduced to
five per cent. every hundred pounds stock is supposed to be taxed at
twenty shillings only. The sum to be raised, by what is called the land
tax, was divided between the country and the principal towns. The greater
part of it was laid upon the country; and of what was laid upon the towns,
the greater part was assessed upon the houses. What remained to be
assessed upon the stock or trade of the towns (for the stock upon the land
was not meant to be taxed) was very much below the real value of that
stock or trade. Whatever inequalities, therefore, there might be in the
original assessment, gave little disturbance. Every parish and district
still continues to be rated for its land, its houses, and its stock,
according to the original assessment; and the almost universal prosperity
of the country, which, in most places, has raised very much the value of
all these, has rendered those inequalities of still less importance now.
The rate, too, upon each district, continuing always the same, the
uncertainty of this tax, so far as it might he assessed upon the stock of
any individual, has been very much diminished, as well as rendered of much
less consequence. If the greater part of the lands of England are not
rated to the land tax at half their actual value, the greater part of the
stock of England is, perhaps, scarce rated at the fiftieth part of its
actual value. In some towns, the whole land tax is assessed upon houses;
as in Westminster, where stock and trade are free. It is otherwise in
London.

In all countries, a severe inquisition into the circumstances of private
persons has been carefully avoided.

At Hamburg, {Memoires concernant les Droits, tom. i, p.74} every
inhabitant is obliged to pay to the state one fourth per cent. of all that
he possesses; and as the wealth of the people of Hamburg consists
principally in stock, this tax maybe considered as a tax upon stock. Every
man assesses himself, and, in the presence of the magistrate, puts
annually into the public coffer a certain sum of money, which he declares
upon oath, to be one fourth per cent. of all that he possesses, but
without declaring what it amounts to, or being liable to any examination
upon that subject. This tax is generally supposed to be paid with great
fidelity. In a small republic, where the people have entire confidence in
their magistrates, are convinced of the necessity of the tax for the
support of the state, and believe that it will be faithfully applied to
that purpose, such conscientious and voluntary payment may sometimes be
expected. It is not peculiar to the people of Hamburg.

The canton of Underwald, in Switzerland, is frequently ravaged by storms
and inundations, and it is thereby exposed to extraordinary expenses. Upon
such occasions the people assemble, and every one is said to declare with
the greatest frankness what he is worth, in order to be taxed accordingly.
At Zurich, the law orders, that in cases of necessity, every one should be
taxed in proportion to his revenue; the amount of which he is obliged to
declare upon oath. They have no suspicion, it is said, that any of their
fellow citizens will deceive them. At Basil, the principal revenue of the
state arises from a small custom upon goods exported. All the citizens
make oath, that they will pay every three months all the taxes imposed by
law. All merchants, and even all inn-keepers, are trusted with keeping
themselves the account of the goods which they sell, either within or
without the territory. At the end of every three months, they send this
account to the treasurer, with the amount of the tax computed at the
bottom of it. It is not suspected that the revenue suffers by this
confidence. {Memoires concernant les Droits, tom. i p. 163, 167,171.}

To oblige every citizen to declare publicly upon oath, the amount of his
fortune, must not, it seems, in those Swiss cantons, be reckoned a
hardship. At Hamburg it would be reckoned the greatest. Merchants engaged
in the hazardous projects of trade, all tremble at the thoughts of being
obliged, at all times, to expose the real state of their circumstances.
The ruin of their credit, and the miscarriage of their projects, they
foresee, would too often be the consequence. A sober and parsimonious
people, who are strangers to all such projects, do not feel that they have
occasion for any such concealment.

In Holland, soon after the exaltation of the late prince of Orange to the
stadtholdership, a tax of two per cent. or the fiftieth penny, as it was
called, was imposed upon the whole substance of every citizen. Every
citizen assesed himself, and paid his tax, in the same manner as at
Hamburg, and it was in general supposed to have been paid with great
fidelity. The people had at that time the greatest affection for their new
government, which they had just established by a general insurrection. The
tax was to be paid but once, in order to relieve the state in a particular
exigency. It was, indeed, too heavy to be permanent. In a country where
the market rate of interest seldom exceeds three per cent., a tax of two
per cent. amounts to thirteen shillings and four pence in the pound, upon
the highest neat revenue which is commonly drawn from stock. It is a tax
which very few people could pay, without encroaching more or less upon
their capitals. In a particular exigency, the people may, from great
public zeal, make a great effort, and give up even a part of their
capital, in order to relieve the state. But it is impossible that they
should continue to do so for any considerable time; and if they did, the
tax would soon ruin them so completely, as to render them altogether
incapable of supporting the state.

The tax upon stock, imposed by the land tax bill in England, though it is
proportioned to the capital, is not intended to diminish or, take away any
part of that capital. It is meant only to be a tax upon the interest of
money, proportioned to that upon the rent of land; so that when the latter
is at four shillings in the pound, the former may be at four shillings in
the pound too. The tax at Hamburg, and the still more moderate taxes of
Underwald and Zurich, are meant, in the same manner, to be taxes, not upon
the capital, but upon the interest or neat revenue of stock. That of
Holland was meant to be a tax upon the capital.

Taxes upon the Profit of particular Employments.

In some countries, extraordinary taxes are imposed upon the profits of
stock; sometimes when employed in particular branches of trade, and
sometimes when employed in agriculture.

Of the former kind, are in England, the tax upon hawkers and pedlars, that
upon hackney-coaches and chairs, and that which the keepers of ale-houses
pay for a licence to retail ale and spiritous liquors. During the late
war, another tax of the same kind was proposed upon shops. The war having
been undertaken, it was said, in defence of the trade of the country, the
merchants, who were to profit by it, ought to contribute towards the
support of it.

A tax, however, upon the profits of stock employed in any particular
branch of trade, can never fall finally upon the dealers (who must in all
ordinary cases have their reasonable profit, and, where the competition is
free, can seldom have more than that profit), but always upon the
consumers, who must be obliged to pay in the price of the goods the tax
which the dealer advances; and generally with some overcharge.

A tax of this kind, when it is proportioned to the trade of the dealer, is
finally paid by the consumer, and occasions no oppression to the dealer.
When it is not so proportioned, but is the same upon all dealers, though
in this case, too, it is finally paid by the consumer, yet it favours the
great, and occasions some oppression to the small dealer. The tax of five
shillings a-week upon every hackney coach, and that of ten shillings
a-year upon every hackney chair, so far as it is advanced by the different
keepers of such coaches and chairs, is exactly enough proportioned to the
extent of their respective dealings. It neither favours the great, nor
oppresses the smaller dealer. The tax of twenty shillings a-year for a
licence to sell ale; of forty shillings for a licence to sell spiritous
liquors; and of forty shillings more for a licence to sell wine, being the
same upon all retailers, must necessarily give some advantage to the
great, and occasion some oppression to the small dealers. The former must
find it more easy to get back the tax in the price of their goods than the
latter. The moderation of the tax, however, renders this inequality of
less importance; and it may to many people appear not improper to give
some discouragement to the multiplication of little ale-houses. The tax
upon shops, it was intended, should be the same upon all shops. It could
not well have been otherwise. It would have been impossible to proportion,
with tolerable exactness, the tax upon a shop to the extent of the trade
carried on in it, without such an inquisition as would have been
altogether insupportable in a free country. If the tax had been
considerable, it would have oppressed the small, and forced almost the
whole retail trade into the hands of the great dealers. The competition of
the former being taken away, the latter would have enjoyed a monopoly of
the trade; and, like all other monopolists, would soon have combined to
raise their profits much beyond what was necessary for the payment of the
tax. The final payment, instead of falling upon the shop-keeper, would
have fallen upon the consumer, with a considerable overcharge to the
profit of the shop-keeper. For these reasons, the project of a tax upon
shops was laid aside, and in the room of it was substituted the subsidy,
1759.

What in France is called the personal taille, is perhaps, the most
important tax upon the profits of stock employed in agriculture, that is
levied in any part of Europe.

In the disorderly state of Europe, during the prevalence of the feudal
government, the sovereign was obliged to content himself with taxing those
who were too weak to refuse to pay taxes. The great lords, though willing
to assist him upon particular emergencies, refused to subject themselves
to any constant tax, and he was not strong enough to force them. The
occupiers of land all over Europe were, the greater part of them,
originally bond-men. Through the greater part of Europe, they were
gradually emancipated. Some of them acquired the property of landed
estates, which they held by some base or ignoble tenure, sometimes under
the king, and sometimes under some other great lord, like the ancient
copy-holders of England. Others, without acquiring the property, obtained
leases for terms of years, of the lands which they occupied under their
lord, and thus became less dependent upon him. The great lords seem to
have beheld the degree of prosperity and independency, which this inferior
order of men had thus come to enjoy, with a malignant and contemptuous
indignation, and willingly consented that the sovereign should tax them.
In some countries, this tax was confined to the lands which were held in
property by an ignoble tenure; and, in this case, the taille was said to
be real. The land tax established by the late king of Sardinia, and the
taille in the provinces of Languedoc, Provence, Dauphine, and Britanny; in
the generality of Montauban, and in the elections of Agen and Condom, as
well as in some other districts of France; are taxes upon lands held in
property by an ignoble tenure. In other countries, the tax was laid upon
the supposed profits of all those who held, in farm or lease, lands
belonging to other people, whatever might be the tenure by which the
proprietor held them; and in this case, the taille was said to be
personal. In the greater part of those provinces of France, which are
called the countries of elections, the taille is of this kind. The real
taille, as it is imposed only upon a part of the lands of the country, is
necessarily an unequal, but it is not always an arbitrary tax, though it
is so upon some occasions. The personal taille, as it is intended to be
proportioned to the profits of a certain class of people, which can only
be guessed at, is necessarily both arbitrary and unequal.

In France, the personal taille at present (1775) annually imposed upon the
twenty generalities, called the countries of elections, amounts to
40,107,239 livres, 16 sous. {Memoires concernant les Droits, etc tom. ii,
p.17.} the proportion in which this sum is assessed upon those different
provinces, varies from year to year, according to the reports which are
made to the king’s council concerning the goodness or badness of the
crops, as well as other circumstances, which may either increase or
diminish their respective abilities to pay. Each generality is divided
into a certain number of elections; and the proportion in which the sum
imposed upon the whole generality is divided among those different
elections, varies likewise from year to year, according to the reports
made to the council concerning their respective abilities. It seems
impossible, that the council, with the best intentions, can ever
proportion, with tolerable exactness, either of these two assessments to
the real abilities of the province or district upon which they are
respectively laid. Ignorance and misinformation must always, more or less,
mislead the most upright council. The proportion which each parish ought
to support of what is assessed upon the whole election, and that which
each individual ought to support of what is assessed upon his particular
parish, are both in the same manner varied from year to year, according as
circumstances are supposed to require. These circumstances are judged of,
in the one case, by the officers of the election, in the other, by those
of the parish; and both the one and the other are, more or less, under the
direction and influence of the intendant. Not only ignorance and
misinformation, but friendship, party animosity, and private resentment,
are said frequently to mislead such assessors. No man subject to such a
tax, it is evident, can ever be certain, before he is assessed, of what he
is to pay. He cannot even be certain after he is assessed. If any person
has been taxed who ought to have been exempted, or if any person has been
taxed beyond his proportion, though both must pay in the mean time, yet if
they complain, and make good their complaints, the whole parish is
reimposed next year, in order to reimburse them. If any of the
contributors become bankrupt or insolvent, the collector is obliged to
advance his tax; and the whole parish is reimposed next year, in order to
reimburse the collector. If the collector himself should become bankrupt,
the parish which elects him must answer for his conduct to the
receiver-general of the election. But, as it might be troublesome for the
receiver to prosecute the whole parish, he takes at his choice five or six
of the richest contributors, and obliges them to make good what had been
lost by the insolvency of the collector. The parish is afterwards
reimposed, in order to reimburse those five or six. Such reimpositions are
always over and above the taille of the particular year in which they are
laid on.

When a tax is imposed upon the profits of stock in a particular branch of
trade, the traders are all careful to bring no more goods to market than
what they can sell at a price sufficient to reimburse them from advancing
the tax. Some of them withdraw a part of their stocks from the trade, and
the market is more sparingly supplied than before. The price of the goods
rises, and the final payment of the tax falls upon the consumer. But when
a tax is imposed upon the profits of stock employed in agriculture, it is
not the interest of the farmers to withdraw any part of their stock from
that employment. Each farmer occupies a certain quantity of land, for
which he pays rent. For the proper cultivation of this land, a certain
quantity of stock is necessary; and by withdrawing any part of this
necessary quantity, the farmer is not likely to be more able to pay either
the rent or the tax. In order to pay the tax, it can never be his interest
to diminish the quantity of his produce, nor consequently to supply the
market more sparingly than before. The tax, therefore, will never enable
him to raise the price of his produce, so as to reimburse himself, by
throwing the final payment upon the consumer. The farmer, however, must
have his reasonable profit as well as every other dealer, otherwise he
must give up the trade. After the imposition of a tax of this kind, he can
get this reasonable profit only by paying less rent to the landlord. The
more he is obliged to pay in the way of tax, the less he can afford to pay
in the way of rent. A tax of this kind, imposed during the currency of a
lease, may, no doubt, distress or ruin the farmer. Upon the renewal of the
lease, it must always fall upon the landlord.

In the countries where the personal taille takes place, the farmer is
commonly assessed in proportion to the stock which he appears to employ in
cultivation. He is, upon this account, frequently afraid to have a good
team of horses or oxen, but endeavours to cultivate with the meanest and
most wretched instruments of husbandry that he can. Such is his distrust
in the justice of his assessors, that he counterfeits poverty, and wishes
to appear scarce able to pay anything, for fear of being obliged to pay
too much. By this miserable policy, he does not, perhaps, always consult
his own interest in the most effectual manner; and he probably loses more
by the diminution of his produce, than he saves by that of his tax.
Though, in consequence of this wretched cultivation, the market is, no
doubt, somewhat worse supplied; yet the small rise of price which this may
occasion, as it is not likely even to indemnify the farmer for the
diminution of his produce, it is still less likely to enable him to pay
more rent to the landlord. The public, the farmer, the landlord, all
suffer more or less by this degraded cultivation. That the personal taille
tends, in many different ways, to discourage cultivation, and consequently
to dry up the principal source of the wealth of every great country, I
have already had occasion to observe in the third book of this Inquiry.

What are called poll-taxes in the southern provinces of North America, and
the West India islands, annual taxes of so much a-head upon every negro,
are properly taxes upon the profits of a certain species of stock employed
in agriculture. As the planters, are the greater part of them, both
farmers and landlords, the final payment of the tax falls upon them in
their quality of landlords, without any retribution.

Taxes of so much a head upon the bondmen employed in cultivation, seem
anciently to have been common all over Europe. There subsists at present a
tax of this kind in the empire of Russia. It is probably upon this account
that poll-taxes of all kinds have often been represented as badges of
slavery. Every tax, however, is, to the person who pays it, a badge, not
of slavery, but of liberty. It denotes that he is subject to government,
indeed; but that, as he has some property, he cannot himself be the
property of a master. A poll tax upon slaves is altogether different from
a poll-tax upon freemen. The latter is paid by the persons upon whom it is
imposed; the former, by a different set of persons. The latter is either
altogether arbitrary, or altogether unequal, and, in most cases, is both
the one and the other; the former, though in some respects unequal,
different slaves being of different values, is in no respect arbitrary.
Every master, who knows the number of his own slaves, knows exactly what
he has to pay. Those different taxes, however, being called by the same
name, have been considered as of the same nature.

The taxes which in Holland are imposed upon men and maid servants, are
taxes, not upon stock, but upon expense; and so far resemble the taxes
upon consumable commodities. The tax of a guinea a-head for every
man-servant, which has lately been imposed in Great Britain, is of the
same kind. It falls heaviest upon the middling rank. A man of two hundred
a-year may keep a single man-servant. A man of ten thousand a-year will
not keep fifty. It does not affect the poor.

Taxes upon the profits of stock, in particular employments, can never
affect the interest of money. Nobody will lend his money for less interest
to those who exercise the taxed, than to those who exercise the untaxed
employments. Taxes upon the revenue arising from stock in all employments,
where the government attempts to levy them with any degree of exactness,
will, in many cases, fall upon the interest of money. The vingtieme, or
twentieth penny, in France, is a tax of the same kind with what is called
the land tax in England, and is assessed, in the same manner, upon the
revenue arising upon land, houses, and stock. So far as it affects stock,
it is assessed, though not with great rigour, yet with much more exactness
than that part of the land tax in England which is imposed upon the same
fund. It, in many cases, falls altogether upon the interest of money.
Money is frequently sunk in France, upon what are called contracts for the
constitution of a rent; that is, perpetual annuities, redeemable at any
time by the debtor, upon payment of the sum originally advanced, but of
which this redemption is not exigible by the creditor except in particular
cases. The vingtieme seems not to have raised the rate of those annuities,
though it is exactly levied upon them all.