From this circumstance, and this only, it happens, that the land-tax in England is so little burdensome, comparatively to what it is in many nations of Europe. Lands in England are let in large portions: no body will let a farm so small as to be proportioned to the supplying of the mere physical wants of the farmer. But in other countries, where the oeconomy is different; where inheritances in land are constantly divided, as moveables, among all the children; the lots become so small, that the proprietor can draw no more from them than his own subsistence; and then when a land-tax is imposed, this poor little portion being valued in proportion to what it can produce, as well as the greatest estate in land, the husbandman is starved, although the tax demanded of him be laid on in the exact proportion to the produce of his land, while he that has a surplus is quite easy.
I would therefore recommend, in countries where this minute subdivision of lands has taken place, that for the future none under a certain extent or value should be suffered to be divided among the children, but ordered to be sold, and the price divided among them; and that the same regulation should be observed upon the death of such proprietors whose lands are not sufficient to produce three times the physical-necessary of the labourers. This would engage a people to exercise agriculture as a trade, and to give over that trifling husbandry which produces no surplus, and which involves so many poor people in the oppression of land-taxes. This plan can never be recommended as a plan to be executed all at once: it must be done by degrees, and in proportion to the progress of industry. The principle is so evident, that I never found any one who did not immediately agree to the justness of my observation; although in imposing land-taxes I have nowhere found it attended to[[53]].
[53]. Some small attention is paid to the poorer sort of landholders in England: for, by the annual act for a land-tax, no poor person shall be liable to the pound-rate, whose lands, &c. are not worth 20s. per annum value.
Here then is the use of theory; it directs us in practice to avoid difficulties, which might otherwise be judged unsurmountable.
2do, I farther observe, that it is a more hurtful error still to mistake the produce of industry for the taxable income arising from it, than to mistake the gross produce of land for the rent: because the profits upon industry bear a smaller proportion to its produce, than the rents of lands do to their full fruits.
The best method of raising money upon the lower classes of the industrious, is rightly to lay their consumption under proportional taxes, which they may easily draw back; because they will raise the price of their work proportionally.
From this we may conclude, contrary to the common opinion, that the test of well imposed taxes is to raise prices in proportion. When they are rightly imposed, every one who sells a commodity which has paid a tax, will draw it back, whether he be industrious or not. If he consumes it, he cannot draw it back, but by raising the price of his work, which again he cannot do, unless the tax be made so general as to affect all his competitors; and unless the consumption he has made be unavoidable to every one of them.
When we reflect upon the large quantities of exciseable goods which are consumed as superfluities, we must conclude that the rise of prices, daily complained of, proceeds more from our manners than from the taxes we pay.
3tio, The expence of a people is not merely what is sufficient to subsist them; but what they consume, either in fruits, of manufactures. Had indeed Davenant computed the value of this necessary quantity, and deducted it from the income, according to his acceptation of income; the remainder would have been a tolerable good representation of what I mean by income, or taxable fund; because whatever a people consume beyond the necessary, I consider as a superfluity which may be laid under taxation.
4to, I must also differ from him in his idea concerning superlucration, wealth, or national stock.