Зображення сторінки
PDF
ePub

CHAPTER V.

OF SOME OTHER TAXES.

these are stamp duties. In some countries, contracts of many kinds are not valid unless registered, and their registration is made an occasion for a tax.

§ 1. BESIDES direct taxes on in- | in France, are another: in England come, and taxes on consumption, the financial systems of most countries comprise a variety of miscellaneous imposts, not strictly included in either class. The modern European systems retain many such taxes, though in much less number and variety than those semi-barbarous governments which European influence has not yet reached. In some of these, scarcely any incident of life has escaped being made an excuse for some fiscal exaction; hardly any act, not belonging to daily routine, can be performed by any one, without obtaining leave from some agent of government, which is only granted in consideration of a payment: especially when the act requires the aid or the peculiar guarantee of a public authority. In the present treatise we may confine our attention to such taxes as lately existed, or still exist, in countries usually classed as civilized.

In almost all nations a considerable revenue is drawn from taxes on contracts. These are imposed in various forms. One expedient is that of taxing the legal instrument which serves as evidence of the contract, and which is commonly the only evidence legally admissible. In England, scarcely any contract is binding unless executed on stamped paper, which has paid a tax to government; and until very lately, when the contract related to property the tax was proportionally much

heavier on the smaller than on the larger transactions; which is still true of some of those taxes. There are also stamp duties on the legal instruments which are evidence of the fulfilment of contracts; such as acknowledgments of receipt, and deeds of release. Taxes on contracts are not always levied by means of stamps. The duty on sales by auction, abrogated by Sir Robert Peel, was an instance in point. The taxes on transfers of landed property,

Of taxes on contracts, the most important are those on the transfer of property; chiefly on purchases and sales. Taxes on the sale of consumable commodities are simply taxes on those commodities. If they affect only some particular commodities, they raise the prices of those commodities, and are paid by the consumer. If the attempt were made to tax all purchases and sales, which, however absurd, was for centuries the law of Spain, the tax, if it could be enforced, would be equivalent to a tax on all commodities, and would not affect prices: if levied from the sellers, it would be a tax on profits, if from the buyers, a tax on consumption; and neither class could throw tho burthen upon the other. If confined to some one mode of sale, as for example by auction, it discourages recourse to that mode, and if of any material amount, prevents it from being adopted at all, unless in a case of emergency; in which case as the seller is under a necessity to sell, but the buyer under no necessity to buy, the tax falls on the seller; and this was the strongest of the objections to the auction duty: it almost always fell on a necessitous person, and in the crisis of his necessities.

Taxes on the purchase and sale of land are, in most countries, liable t the same objection. Landed property in old countries is seldom parted with, except from reduced circumstances, or some urgent need: the seller, therefore, must take what he can get, while the buyer, whose object is an investment, makes his calculations on the interest which he can obtain for his money in other ways, and wik not buy

if he is charged with a government tax on the transaction.* It has indeed been objected, that this argument would not apply if all modes of permanent investment, such as the purchase of government securities, shares in joint-stock companies, mortgages, and the like, were subject to the same tax. But even then, if paid by the buyer, it would be equivalent to a tax on interest: if sufficiently heavy to be of any importance, it would disturb the established relation between interest and profit; and the disturbance would redress itself by a rise in the rate of interest, and a fall of the price of land and of all securities. It appears to me, therefore, that the seller is the person by whom such taxes, unless under peculiar circumstances, will generally be borne.

All taxes must be condemned which throw obstacles in the way of the sale of land, or other instruments of production. Such sales tend naturally to render the property more productive. The seller, whether moved by necessity or choice, is probably some one who is either without the means, or without the capacity, to make the most advantageous use of the property for productive purposes; while the buyer, on the other hand, is at any rate not needy, and is frequently both inclined and able to improve the property, since, as it is worth more to such a person than to any other, he is likely to offer the highest price for it. All taxes, therefore, and all difficulties and expenses, annexed to such contracts, are decidedly detrimental; especially in the case of land, the source of subsistence, and the original foundation of all wealth, on the improvement of which, therefore, so much depends. Too great facilities cannot be given to enable land to pass into the hands, and as

sume the modes of aggregation or division, most conducive to its productiveness. If landed properties are too large, alienation should be free, in order that they may be subdivided; if too small, in order that they may be united. All taxes on the transfer of landed property should be abolished; but, as the landlords have no claim to be relieved from any reservation which the state has hitherto made in its own favour from the amount of their rent, an annual impost equivalent to the average produce of these taxes should be distributed over the land generally, in the form of a land-tax.

Some of the taxes on contracts are very pernicious, imposing a virtual penalty upon transactions which it ought to be the policy of the legislator to encourage. Of this sort is the stamp duty on leases, which in a country of large properties are an essential condition of good agriculture; and the tax on insurances, a direct discouragement to prudence and forethought. In the case of fire insurances, the tax was until lately in all cases, and still is in most cases, exactly double the amount of the premium of insurance on common risks; so that the person insuring is obliged by the government to pay for the insurance just three times the value of the risk. If this tax existed in France, we should not see, as we do in some of her provinces, the plate of an insurance company on almost every cottage or hovel. This, indeed, must be ascribed to the provident and calculating habits produced by the dis semination of property through the labouring class: but a tax of so extravagant an amount would be a heavy drag upon any habits of providence.

§ 2. Nearly allied to the taxes on contracts are those on communication. The principal of these is the postage tax; to which may be added taxes on advertisements, and on newspapers, which are taxes on the communication of information.

The statement in the text requires modification in the case of countries where the land is owned in small portions. These being neither a badge of importance, nor in general an object of local attachment, are readily parted with at a small advance on their original cost, with the intention of buy. ing elsewhere: and the desire of acquiring land, even on disadvantageous terms, is so great, as to be little checked by even a high making the government the sole authorized carrier of them, and demand.

rate of taxation.

The common mode of levying a tax on the conveyance of letters, is by

ing a monopoly price. When this them, newspapers are a luxury which price is so moderate as it is in this they can as well afford to pay for as country under the uniform penny post- any other indulgence, and which is as age, scarcely if at all exceeding what unexceptionable a source of revenue. would be charged under the freest But to that large part of the commucompetition by any private company, it | nity who have been taught to read, but can hardly be considered as taxation, have received little other intellectual but rather as the profits of a business; education, newspapers are the source whatever excess there is above the of nearly all the general information ordinary profits of stock being a fair which they possess, and of nearly all result of the saving of expense, caused their acquaintance with the ideas and by having only one establishment and topics current among mankind; and one set of arrangements for the whole an interest is more easily excited in country, instead of many competing newspapers, than in books or other ones. The business, too, being one more recondite sources of instruction. which both can and ought to be con- Newspapers contribute so little, in a ducted on fixed rules, is one of the few direct way, to the origination of useful businesses which it is not unsuitable to ideas, that many persons undervalue a government to conduct. The post the importance of their office in disoffice, therefore, is at present one of the seminating them. They correct many best of the sources from which this prejudices and superstitions, and keep country derives its revenue. But a up a habit of discussion, and interest postage much exceeding what would in public concerns, the absence of which be paid for the same service in a system is a great cause of the stagnation of of freedom, is not a desirable tax. Its mind usually found in the lower and chief weight falls on letters of business, middle, if not in all, ranks, of those and increases the expense of mercan- countries where newspapers of an im tile relations between distant places. portant or interesting character do not It is like an attempt to raise a large exist. There ought to be no taxes revenue by heavy tolls: it obstructs all which render this great diffuser of inoperations by which goods are con- formation, of mental excitement, and veyed from place to place, and dis- mental exercise, less accessible to that courages the production of commodities portion of the public which most needs in one place for consumption in an- to be carried into a region of ideas other; which is not only in itself one and interests beyond its own limited of the greatest sources of economy of horizon. labour, but is a necessary condition of almost all improvements in production, and one of the strongest stimulants to industry and promoters of civilization.

§ 3. In the enumeration of bad taxes, a conspicuous place must be assigned to law taxes; which extract A tax on advertisements is not free a revenue for the state from the various from the same objection, since in what- operations involved in an application ever degree advertisements are useful to the tribunals. Like all needless to business, by facilitating the coming expenses attached to law proceedings, together of the dealer or producer and they are a tax on redress, and therethe consumer, in that same degree, if fore a premium on injury. Although the tax be high enough to be a serious such taxes have been abolished in this discouragement to advertising, it pro- country as a general source of revenue, longs the period during which goods they still exist in the form of fees of remain unsold, and capital locked up court, for defraying the expense of the in idleness. courts of justice; under the idea, apA tax on newspapers is objection-parently, that those may fairly be reable, not so much where it does fall as where it does not, that is, where it prevents newspapers from being used. To the generality of those who buy

[ocr errors]

quired to bear the expenses of the administration of justice, who reap the benefit of it. The fallacy of this doe trine was powerfully exposed by

T

tham. As he remarked, those who are | in rendering the service. Thus limited,

under the necessity of going to law, are those who benefit least, not most, by the law and its administration. To them the protection which the law affords has not been complete, since they have been obliged to resort to a court of justice to ascertain their rights, or maintain those rights against infringement: while the remainder of the public have enjoyed the immunity from injury conferred by the law and the tribunals, without the inconvenience of an appeal to them.

§ 4. Besides the general taxes of the State, there are in all or most countries local taxes, to defray any expenses of a public nature which it is thought best to place under the control or management of a local authority. Some of these expenses are incurred for purposes in which the particular locality is solely or chiefly interested; as the paving, cleansing, and lighting of the streets; or the making and repairing of roads and bridges, which may be important to people from any part of the country, but only in so far as they, or goods in which they have an interest, pass along the roads or over the bridges. In other cases again, the expenses are of a kind as nationally important as any others, but are defrayed locally because supposed more ikely to be well administered by local bodies; as, in England, the relief of the poor and the support of gaols, and in some other countries, of schools. To decide for what public objects local | superintendence is best suited, and what are those which should be kept immediately under the central government, or under a mixed system of local management and central superintendence, is a question not of political economy, but of administration. It is an important principle, however, that taxes imposed by a local authority, being less amenable to publicity and discussion than the acts of the government, should always be special laid on for some definite service, and not exceeding the expense actually incurred

it is desirable, whenever practicable, that the burthen should fall on those to whom the service is rendered; that the expense, for instance, of roads and bridges, should be defrayed by a toll on passengers and goods conveyed by them, thus dividing the cost between those who use them for pleasure or convenience, and the consumers of the goods which they enable to be brought to and from the market at a diminished expense. When, however, the tolls have repaid with interest the whole of the expenditure, the road or bridge should be thrown open free of toll, that it may be used also by those to whom, unless open gratuitously, it would be valueless; provision being made for repairs either from the funds of the state, or by a rate levied on the localities which reap the principal benefit.

In England, almost all local taxes are direct, (the coal duty of the City of London, and a few similar imposts, being the chief exceptions,) though the greatest part of the taxation for general purposes is indirect. On the contrary, in France, Austria, and other countries where direct taxation is much more largely employed by the state, the local expenses of towns are principally defrayed by taxes levied on commodities when entering them. These indirect taxes are much more objectionable in towns than on the frontier, because the things which the country supplies to the towns are chiefly the necessaries of life and the materials of manufacture, while of what a country imports from foreign countries, the greater part usually consists of luxuries. An octroi cannot produce a large revenue, without pressing severely upon the labouring classes of the towns; unless their wages rise proportionally, in which case the tax falls in a great measure on the consumers of town produce, whether residing in town or country, since capital will not remain in the towns if its profits fall below their ordinary proportion as compared with the rural districts.

CHAPTER VI.

COMPARISON BETWEEN DIRECT AND INDIRECT TAXATION.

§ 1. ARE direct or indirect taxes the most eligible? This question, at all times interesting, has of late excited a considerable amount of discussion. In England there is a popular feeling, of old standing, in favour of indirect, or it should rather be said in opposition to direct, taxation. The feeling is not grounded on the merits of the case, and is of a puerile kind. An Englishman dislikes, not so much the payment as the act of paying. He dislikes seeing the face of the tax-collector, and being subjected to his peremptory demand. Perhaps, too, the money which he is required to pay directly out of his pocket is the only taxation which he is quite sure that he pays at all. That a tax of one shilling per pound on tea, or of two shillings per bottle on wine, raises the price of each pound of tea and bottle of wine which he consumes, by that and more than that amount, cannot indeed be denied; it is the fact, and is intended to be so, and he himself, at times, is perfectly aware of it; but it makes hardly any impression on his practical feelings and associations, serving to illustrate the distinction between what is merely known to be true and what is felt to be so. The unpopularity of direct taxation, contrasted with the easy manner in which the public consent to let themselves be fleeced in the prices of commodities, has generated in many friends of improvement a directly opposite mode of thinking to the foregoing. They contend that the very reason which makes direct taxation disagreeable, makes it preferable. Under it, every one knows how much he really pays; and if he votes for a war, or any other expensive national luxury, he does so with his eyes open to what it costs him. If all axes were direct, taxation would be much more perceived than at present; and there would be a security which

now there is not, for economy in the public expenditure.

Although this argument is not without force, its weight is likely to be constantly diminishing. The real incidence of indirect taxation is every day more generally understood and more familiarly recognised: and whatever else may be said of the changes which are taking place in the tendencies of the human mind, it can scarcely, I think, be denied, that things are more and more estimated according to their calculated value, and less according to their non-essential accompaniments. The mere distinction between paying money directly to the tax-collector, and contributing the same sum_through the intervention of the tea-dealer or the wine-merchant, no longer makes the whole difference between dislike or opposition, and passive acquiescence. But further, while any such infirmity of the popular mind subsists, the argument grounded on it tells partly on the other side of the question. If our present revenue of about seventy millions were all raised by direct taxes, an extreme dissatisfaction would certainly arise at having to pay so much; but while men's minds are so little guided by reason, as such a change of feeling from so irrelevant a cause would imply, so great an aversion to taxation might not be an unqualified good. Of the seventy millions in question, nearly thirty are pledged, under the most binding obligations, to those whose property has been borrowed and spent by the state and while this debt remains unredeemed, a greatly increased impatience of taxation would involve no little danger of a breach of faith, similar to that which, in the defaulting states of America, has been produced, and in some of them still continues, from the same cause. That part, indeed, of the

« НазадПродовжити »