Has the foresight of the Constituents in establishing these sources of revenue been justified? or, in other words, were the elements of revenue created by the fundamental charter efficacious? A little study of the system of Argentine revenue will show that of all these sources enumerated, the only ones that have a permanent and fertile existence
are those relating to the customs receipts; that is, to the duties of export and import. The others either give poor and uncertain results, such as the sale and allocation of national lands; or are of a perilous nature and to be used with restraint, such as loans and transactions on credit; or they are drawn from services which produce revenue only within narrow limits, such as the Posts.
Besides the sources appointed by the Constitution for normal requirements and ordinary periods, the same charter enumerates another source to be resorted to in exceptional cases or for purposes of defence, when the common security and the general welfare of the State may demand it. This source is the imposition of “direct taxes, during a fixed period, and equally proportioned all over the Republic.”
It follows from these limits that the principal effective source of revenue intended by the Constitution to form the Federal Treasury is that of indirect taxation. So far the new fundamental code has not only followed the example of the principal nations, and hearkened to the counsel of economic science, but has also put into effect an eminently practical and far-seeing procedure.
Señor Alberdi, who of all writers has most profoundly studied the system of revenue established by the Argentine Constitution, has stated that indirect taxation is the most fruitful fiscal resource, as is proved by the customs revenues, which are relatively greater than those of all other taxes put together. The indirect tax, adds Señor Alberdi, is relatively the most equitable, as every one pays according to his tastes and his powers of consumption; the foreigner as well as the son of the soil.[97]
[97] See Sistema económico y rentístico, Obras de Alberdi, Vol. IV, p. 419.
As we have seen, the Constitution was far-seeing and lucid in its definition of the character of the revenues of the National Treasury: that is, in fixing upon the customs duties, the sale and allocation of land, the products of the Posts, and other contributions to be imposed by Congress for normal situations in a proportional and equitable manner; and also in deciding upon the imposition of direct taxation for determined periods, and relatively equal all over the country, for exceptional and abnormal times.
According to the commentator quoted above, when the Constitution left Congress the faculty of establishing, equitably and in due proportion, taxes of other kinds, and abstained from naming them or limiting them to a fixed number, it was because it wished to give the legislature the right of adopting all those recognised by economic science, in order that they might be imposed according to the principles of the Constitution itself.
If we now cast an eye over the table of the national revenue, we shall see that in 1908 the nation collected, in the form of direct taxes, the sum of £583,344; in the form of indirect taxes, £4,803,920; for the remuneration of services, a sum of £1,023,440, which had not the character of direct taxation; as the usufruct of land belonging to the national domain, and the profits of national undertakings, £2,510,240; and as capitation fees, £8,000. We must also include in the receipts the sums contributed by some of the provinces, and by the National Bank, to the service of the national debt; guaranteed, on their account, by the National Treasury. If we add together all these sums, which for one reason or another were placed to the account of the nation in 1908, we arrive at a general total of £22,392,160.