This doctrine, therefore, with regard to taxes may be admitted to some degree, but beware of the abuse. Exorbitant taxes, like extreme necessity, destroy industry by producing despair; and even before they reach this pitch they raise the wages of the labourer and manufacturer, and heighten the price of all commodities. An attentive, disinterested legislature will observe the point when the emolument ceases and the prejudice begins; but as the contrary character is much more common, it is to be feared that taxes all over Europe are multiplying to such a degree as will entirely crush all art and industry; though perhaps their first increase, together with circumstances, might have contributed to the growth of these advantages.
The best taxes are such as are levied upon consumptions, especially those of luxury, because such taxes are less felt by the people. They seem, in some measure, voluntary, since a man may choose how far he will use the commodity which is taxed: they are paid gradually and insensibly, and being confounded with the natural price of the commodity, they are scarcely perceived by the consumers. Their only disadvantage is that they are expensive in the levying.
Taxes upon possessions are levied without expense, but have every other disadvantage. Most states, however, are obliged to have recourse to them, in order to supply the deficiencies of the other.
But the most pernicious of all taxes are those which are arbitrary. They are commonly converted by their management into punishments on industry; and also by their unavoidable inequality are more grievous than by the real burden which they impose. It is surprising, therefore, to see them have place among any civilized people.
In general, all poll-taxes, even when not arbitrary—which they commonly are—may be esteemed dangerous; because it is so easy for the sovereign to add a little more and a little more to the sum demanded, that these taxes are apt to become altogether oppressive and intolerable. On the {p82} other hand, a duty upon commodities checks itself, and a prince will soon find that an increase of the impost is no increase of his revenue. It is not easy, therefore, for a people to be altogether ruined by such taxes.
Historians inform us that one of the chief causes of the destruction of the Roman state was the alteration which Constantine introduced into the finances, by substituting a universal poll-tax in lieu of almost all the tithes, customs, and excises which formerly composed the revenue of the empire. The people in all the provinces were so grinded and oppressed by the publicans that they were glad to take refuge under the conquering arms of the barbarians, whose dominion, as they had fewer necessities and less art, was found preferable to the refined tyranny of the Romans.
There is a prevailing opinion that all taxes, however levied, fall upon the land at last. Such an opinion may be useful in Britain, by checking the landed gentlemen, in whose hands our legislature is chiefly lodged, and making them preserve great regard for trade and industry; but I must confess that this principle, though first advanced by a celebrated writer, has so little appearance of reason that were it not for his authority it had never been received by anybody. Every man, to be sure, is desirous of pushing off from himself the burden of any tax which is imposed, and laying it upon others; but as every man has the same inclination, and is upon the defensive, no set of men can be supposed to prevail altogether in this contest. And why the landed gentleman should be the victim of the whole, and should not be able to defend himself as well as others are, I cannot readily imagine. All tradesmen, indeed, would willingly prey upon him and divide him among them if they could; but this inclination they always have, though no taxes were levied; and the same methods by which he guards against the imposition of tradesmen before taxes will serve him afterwards, and make them share the burden with him. No labour in any commodities that are exported can be very considerably raised in the price without losing the foreign market; and as some part of almost every {p83} manufactory is exported, this circumstance keeps the price of most species of labour nearly the same after the imposition of taxes. I may add that it has this effect upon the whole, for were any kind of labour paid beyond its proportion all hands would flock to it, and would soon sink it to a level with the rest.
I shall conclude this subject with observing that we have with regard to taxes an instance of what frequently happens in political institutions, that the consequence of things are diametrically opposite to what we should expect on the first appearance. It is regarded as a fundamental maxim of the Turkish Government that the Grand Seignior, though absolute master of the lives and fortunes of each individual, has no authority to impose a new tax; and every Ottoman prince who has made such an attempt either has been obliged to retract, or has found the fatal effects of his perseverance. One would imagine that this prejudice or established opinion were the firmest barrier in the world against oppression, yet it is certain that its effect is quite contrary. The emperor, having no regular method of increasing his revenue, must allow all the pashas and governors to oppress and abuse the subjects, and these he squeezes after their return from their government; whereas, if he could impose a new tax, like our European princes, his interest would so far be united with that of his people that he would immediately feel the bad effects of these disorderly levies of money, and would find that a pound raised by general imposition would have less pernicious effects than a shilling taken in so unequal and arbitrary a manner.
NOTE, OF TAXES.
[26] Account of the Netherlands, chap. vi.