Thoughts on the mechanism of societies

by marquis de Charles Casaux

The system of taxation, which may be called general, is composed of the four different kinds of taxes which I have just mentioned:—First, some kind of poll-tax, under that or any other name;—secondly, a land-tax;—thirdly, an impost on the consumption of the rich, or luxury;—and fourthly, in fine, the freedom taken with the consumption of the poor, or general consumption; for the sun of reason forces its way through the darkness of prejudices; these only serve to retard the progress of nature wherever light first began to shine. It would be easier to stifle truth at first, than entirely to escape its effects.

No country in the world can be guarded against the injustice inseparable from the two first parts of the system of a compound-taxation, whatever may be in that respect the wisdom of the legislature, and its tenderness in the manner of collecting the impost; no country can be free from that other kind of injustice which results from the general prejudice in favour of the tax on luxury, which constitutes the third part of the system under examination; but the ensemble—the whole together, does not produce every where the same effects on the prices.

In France, from the beginning of the present century down to the time when Mons. Turgot was intrusted with the department of the finances, the sum of what I can collect from the French mode of taxation, is, that without any determined system, without any other rule than the immediate want of money, and the facility of procuring that money by means of a loan, at any interest whatever, they had successively taxed whatever came first to hand, or occurred to the imagination of the comptroller general for the time being; nothing was spared, in order that no one should complain; landed estates, employments, money, individuals, the one because he was industrious, the other because he had no industry and that he might acquire some; this man, because he had a title; that other, because he had none; a third, on account of what he consumed; a fourth, for that consumption to which he was doomed,—(an expedient which, together with the galleys, was devised by the farmers general, as an admirable stroke upon smuggling). No sin more venial, than to take some liberties with a compound of such motley pieces; nothing more severe than the reflexions thrown out against it on the other side of the channel; and nothing can more forcibly prove that France was planning some reform on the subject, than the orders given most minutely to enquire into the principles and effects of the various modes of taxation adopted in other parts of Europe. I think, in regard to all those parts of French taxation, which I have alluded to, as every intelligent man does in France and England: nevertheless, if one cannot positively affirm, that the result of such a chaos of strange regulations, has been, that every one perceiving the burden to be general, nobody ever thought of easing himself at the expence of others who appeared to have been loaded in the same manner, yet it cannot be contradicted, that, notwithstanding the want of true principles on the part of the taxator in France, the price of every thing might have continued to this day, without material alteration, had it not been for an event, of which I shall speak in the sequel; and if it were true, as some very deep politicians will have it, that the more depreciated commodities are in a country, the quicker that nation advances towards opulence, because, in such a case, the national manufacturer has it in his power to favour the foreigner by underselling all other countries in the world; if this principle were not at least questionable, as I hope to prove it by and by, every one would admit that the compound-taxation, even compounded, as I have just described it, does not appear totally destitute of some advantages.

Before I venture to express my thoughts on the subject, I wish the reader would form to himself an idea of what might be the effect of such a system in England;—in England, where every man is a calculator, and adds without ceremony, on the creditor side of his books, the number of figures necessary to balance those which he thinks too many in the calculation of others. They say in England, and there they are more bitterly persuaded than any where else, that taxes take annually out of the pockets of those who pay them, the whole amount of the impost; but there as every where, and there much sooner than in any other part of the world, justice and reason never fail to put into the head of each individual, what he is to do, that the tax be not paid for a long while out of his own pocket. I may therefore boldly say, that nothing more is wanted on the part of England, to join perfectly in opinion with me, concerning the most important point (that which concerns the national debt), than to observe, that every one has always done as secretly and as expeditiously as he could, for himself alone, what I insist it would be advantageous to do openly, with equal celerity, for the general good[8]. I now resume my subject.

It would be, methinks, a difficult matter not to conclude, from such very reasonable conflict of private calculations, that, were the French system to be adopted in England, it would not, in that land of benediction, experience the fate of exotic plants; far from degenerating, far from keeping the price of all things at the lowest ebb, it would acquire from the influence of general maxims, and from universal custom, the weight necessary to balance that multitude of private injuries, from which it is impossible to keep it free. Now, this cannot be effected without forcing the price of every thing up to a pitch so much more extravagant, as each man, in such a case, is the natural judge of the indemnity he should allow himself for the tax imposed, and for the advantage that others derive from it; if any one should shrink on the occasion, he finds in his corporation a degree of vigour, of which he shares the benefit. The word of the law is the only bridle in England; a tax of 4s. on a particular article, increases its known price only by something more; but if government gets 50,000l. from a tax, under the appellation of licence, or any other name, which leaves the man thus taxed, supreme judge of the rate, and at liberty to choose the means of indemnifying himself, one may rest assured that such a tax costs the people six times as much as it brings in to government. Let every man candidly weigh this (I don’t say undenied, but I say) undeniable assertion, from the circumstances of the moment; let him examine what remains to be done by the land proprietor, that he may not be most shamefully ransomed; let him judge in what predicament that man must stand, whose fixed revenue in money, affords him no resource against the effects produced by such an emulation; let him observe, above all, that the daily labourer will not, before the matter is brought to the last extremity, be paid one penny more, because care has been charitably taken to tax almost none of the articles of his consumption; and let him then, if he dares to do it, let him bless the tax on luxury, and any other kind of impost, but such as is laid on the objects of most general consumption.

The real necessity of providing for the interest due on the debt contracted during the last war, and the imaginary advantage of the intended reimbursement, have compelled the present Ministry (and according to the maxims and ideas that predominate at this time, would have compelled all possible administrations) to impose many taxes of the very exceptionable kind; to their effects add those of the indirect tax of corporations, premiums, prohibitions, and new obstacles thrown in the smuggler’s way, it will not be wonderful that the million sterling for the imaginary want of a reimbursement, together with the three millions some hundred thousands, for the real want, (the interest of the debt) and which, at the word, ought not to increase the total mass of prices much above 8 per cent. actually advance them to 12, whilst in France the expences of the late war will not perhaps occasion, at first, a rise of more than 6 per cent. It will be seen in the sequel why I say, at first.

But, they say in France—but, they say in England, all the articles of consumption are already so loaded, that it is impossible to think of increasing the weight. The French Farmers General themselves tremble when they propose to increase the duties on any article; will not consumption suffer by it?—Such is every where the terrible argument that prevents the establishment of the only unexceptionable system, the only equitable, and the only advantageous one to the people—to the people, on whose account they pretend to be so anxious.—That system, it is true, would lessen by one half, the nominal value of those operations that are held in so important a light, of all those tricks of which the contrivers themselves entertain so high an opinion; but what ease, what leisure would not this very system procure to the Minister! Let us then see whether the formidable argument, on which is grounded the impossibility of doing the best, will bear the analysis, so formidable also in so many cases.

Some Doubts on the supposed Impossibility of laying all Taxes on Consumption.

The universal voice in England is, that so many taxes should be laid, as are necessary to answer the exigences. Ministry, Opposition, Subjects, all agree in this essential point; but if we except some taxes which bear principally on the land proprietor, who never says any thing, and whose silence commands that of every one who shares in his burden, the ablest man in the three kingdoms is not capable of proposing one, on any article, which would not be followed by a petition from those very men who do not even wait till it has received the royal sanction, in order to derive from it an extravagant advantage, if it be within the meaning of licences, and perhaps only a profit rather above a reasonable one, if it bears on an object properly specified.