Part 18

But his 20 millions revenue, have, as I have said, the same component parts as the 40 millions which he is obliged to give up for the expences of cultivation, and other incumbrances attending property:—he cannot therefore increase them to 25 millions, without raising by one twelfth the total amount of the 60 millions of landed revenue; this will at once carry up the quarter of wheat from 40s. to 43s. 4d.: this is therefore an advance of 8⅓ per cent. on his commodities:—upon which we must observe, that no increase will take place in the wages of the mechanic, or of the husbandman; for the objects of luxury are the only ones which we suppose to have been taxed: such is the infernal side of this heavenly system.—Yet this is not all.

What is the money-proprietor to do, not having it in his power to raise the price of his money as the landed proprietor can do that of his wheat, but who, on the contrary, is invariably limited to the same nominal revenue, whilst the tax of the other 5 millions, which the humanity of the taxator had levelled at him, has occasioned a rise of 25 per cent. in the nominal value of those articles of luxury in which he indulged himself?—He will, he must leave them in the hands of industry, and confine himself to such objects as are not taxed; it is a resource, as it is at the same time a compulsive measure.—The produce of the tax will then be inadequate to the want: a second impost must then be thought on, to supply the deficit of the first.—Fall again upon luxury, cry the enthusiasts; this is more necessary than ever, for bread is already 8⅓ per cent. dearer than it was, and the land proprietors have abated nothing of their luxury; they ride still in their chariots, whilst the poor loaded porter constantly trudges on foot. Enthusiasts will never see further, and those who are not enthusiasts do not yet see far enough; for they only say that it is expedient for government, that the prices of commodities be kept up, in order to facilitate the payment of the impost.—Yet, if it is expedient for government, that the prices be kept up to facilitate the payment of the impost, I conclude that it is an absolute necessity for government, that the prices do increase, when there is no other visible means to establish the possibility of paying taxes. I therefore have to answer only to the enthusiasts, and let it be as the enthusiasts will have it:⸺

But the first 5 millions of the charitable tax could not be paid, without an advanced price of 8⅓ per cent. on all the productions of the earth, without raising the wheat from 40s. to 43s. 4d.—it will then be necessary to increase its price by as much again; it must advance from 43s. 4d. to 46s. 8d. in order that the tax be paid without foreign assistance. Then all will be settled, regulated, balanced, and paid between the capitalists of land and those of industry; but as no objects will have been taxed but those of luxury, how long will it be before the people, the labouring man can see justice done to him?—Ten popular insurrections perhaps will be required to extort it. Yet let us suppose that the very first proves sufficient to procure it complete, that is, that their wages be raised 16⅔ per cent. as the tax after all the necessary re-actions has increased the price of the produce of their labour:—in this case, instead of the 20 millions allowed before to each of the two classes of working men, cultivators and mechanics, they will then receive 23,333,333l. 13s. 4d.—But how will you wrest from the hands of the land proprietor 3,333,333l. 13s. 4d. out of the portion which he was obliged to lay by, that the tax might be paid by his consumption, without his advancing again the price of his commodities in such a proportion as will return him the new sum which he is forced to pay?—And were he not to augment again the price of his commodities, would not then a new tax become necessary to supply the deficit which the rise of wages of the labouring men must occasion in the consumption of their employers?—The land proprietor will then add still to the price of his goods;—but will not this addition, equally necessary as the two first, be productive of a further necessity of raising in proportion the price of labour, the wages of the labouring man?—No doubt; and another insurrection would procure justice, if the thought did not occur at last of observing, that the class of labouring men being, before the tax, in possession of one third of the general revenue, forms, in this respect, a third interest equal to one half of the two other. Now, the tax having enforced an advance in prices of 16⅔, to shelter the two former from its effect, there must also be, in favour of the third interest, a third increase of 8⅓, which rising at last to 25 per cent. more, the price of labour, as that of its produce, both in regard to land and industry, will exactly leave to each of the three interests, under the denomination of twenty-five, the same comforts as each of them enjoyed under that of twenty before the tax was laid.

In regard therefore to the effects of the tax on the prices of provisions, there is not the least difference between the system of taxing luxury, and that of a land-tax; 50s. in the supposition of an impost of ten millions, would prove in either system the necessary price of wheat; for if ever a price can be termed necessary, it is when it cannot be lower without effecting the ruin of the land proprietor, and even without missing the sole and indispensable end of taxation, unless recourse be had to one of the following resources:

Either

To export such commodities, which, as it might be absurdly supposed, the nation is no longer able to consume,

Or,

To steal from the people the proportionable increase due to them in the price of their labour, if they should prove so complaisant as tamely to submit, out of gratitude, for the tax being laid only upon luxury.

I shall conclude this article with a reflexion which may give birth to many others.

The impost on luxury, which, after a very little time, as we have seen, proves no ways injurious to those who were able to pay for the objects upon which the tax was laid, is besides, under another point of view, really advantageous to those very men who seem the only contributors to it; because it sets entirely above the reach of the people, a number of articles in which they would indulge themselves, to the great benefit of the tax, and which, though perhaps intended by the general provider, as well for the poor as for the rich, are nevertheless, by the merciful system of taxation, exclusively reserved to the rich.—Is this the intention of the merciful taxator?—in my opinion it ought not to be that of an intelligent one.

Effects of a merciless Tax upon all the Articles of the most general Consumption.

Instead of laying a tax on men, from whom, without rushing with open eyes into the perpetration of a thousand injuries, it is impossible to require any thing more than a personal service, when it is necessary and possible withal; instead of taxing the land, from which nothing can be expected but food, and the rough materials to which industry can give from one to many hundred degrees of value; instead of taxing that imaginary monster called luxury, which procures so substantial a support to some, and such pleasing comforts to others, lay your tax solely, and without predilection, on all those products of national and foreign industry which are more generally consumed; then, in my opinion, you will have reason to flatter yourself that riches are taxed to their very source, and without inconvenience to any one, since you tax it in the hands of those who are, by the strictest justice, authorised to a benefit for all the advances made by them to the consumer.

So then, though the tax of 10 millions be fixed on certain parts of industry, nothing will prevent the whole from rising proportionably; and for this, God alone be thanked. The whole will be then 70 millions instead of 60;—upon which the least reflexion is sufficient to make us feel the necessity of the re-actions mentioned in the foregoing system, but with this difference, that the general consumption having been taxed, the two capitalists cannot, even on the very day when the impost takes place, shut their eyes against the justice of increasing the salary of the labouring man in a due proportion.—Now, the interest of the two capitalists could not, as in the preceding system, be preserved undiminished, but by an increase from 60 to 70 millions, that is to say, 16⅔ per cent.—Now, the interest of the labouring man is, as has been observed before, equal to one half of the other two classes in the general revenue, or, in other words, equal to either;—it will therefore become necessary, in order to restore the former equilibrium, to introduce a fresh increase of 8⅓ per cent. upon every thing;—in consequence of which the price of labour, being raised 25 per cent. just as its products, both in cultivation and industry, will leave also the two classes of labourers in the same situation they were in previous to the tax; each of them was then in possession of 20 millions out of 60, each will now get 25 out of 75.

I think also that then, a Minister of finance, ever so anxious about his operations, ever so zealous for the establishment of none but productive taxes, could not conceive a single article of consumption that might suffer by this arrangement; it would appear too evidently that every one would then have the very same faculty of consuming, manufacturing, or saving, under the denomination of 25, all that he had before consumed, manufactured, or saved under the denomination of 20.

It would also be seen then, that the success of those taxes termed productive, is not to be ascribed to the abilities of the taxator, but to the abilities of the persons taxed, who have taken care to right themselves by so much as the taxator ought to have been afraid of being unjust.

Then also would every one be sensible, that the advance in all the prices could not be only of a 12th part, or 8⅓ per cent. as in the glorious system of a poll-tax established by Divine Justice, but of 25 per cent. neither more nor less than in the system of the land-tax, neither more nor less than in the system of an exclusive tax upon luxury; that consequently wheat, as well as produce of any other sort, as well as labour which gives the whole, would be indebted to the tax for a fifth part of its new nominal value, and that 50s. would be the medium price of wheat;—its necessary price, but not more necessary in that merciless taxation, than in the merciful one laid on the exclusive consumption of the rich:—and this calls for the attention of every individual; nor can it be too often repeated, because then neither hypocrites, nor enthusiasts, nor good men, nor manufacturers, nor farmers, nor proprietors, could any longer deceive themselves or others, on the price of labour; it would be too self-evident that the said price ought to increase with the taxes, and that no one would be injured by that increase.

Then it would also appear, that some people had very good reason to say, that the burden of all taxes, falls one time or another, on the landed property; but who could refuse to admit besides, that I am tolerably founded in insisting, that when taxes have in fine reached every part of the whole, no one part can feel the weight?

The money proprietor, it will be said, the lender alone will be aggrieved; he must lose the fifth part of his usual comforts, he must pay 15 for those articles which he could procure formerly for 12.

I shall confine myself to three answers:

First, Is it not self-evident, that any financiering operation, which reduces from 5 to 4, the interest of a national debt, deprives as well the lender of the fifth part of his comforts, AS IF THE NATION HAD LOADED HERSELF WITH TEN MILLIONS MORE, TO BE PAID ANNUALLY? (such is the present hypothesis.) There stands, therefore, between the two cases no other difference, but the palpable justice and necessity of the one, and I believe we may say, the unsuspected inutility and injustice of the other.

Secondly, We have already seen that the loss of the lender, in all cases, flows essentially from the nature of his capital; that it is inseparable from the advance of prices, whether that advance originates from an accession of wealth, or is produced by taxes, or brought on by monopoly; and that besides, by lending to the State, with the certainty that the State could not pay the interest of the loan without the assistance of an import, he has beforehand submitted to the effects of an impost indispensable to his main object.

Thirdly, If we except a poll-tax, which we should suppose laid by Divine Justice, and which, in the present hypothesis, should wrest from the lender only a twelfth part of his enjoyments, where is the system, which, in the supposition of a tax of ten millions, being now necessary in England, would not deprive him of a fifth part of those enjoyments?—We shall see presently that a compound-tax would perhaps prove still less favourable; but how much has he to dread, in all cases, from the indirect taxation of the monopoly, which it is impossible duly to estimate!

Effects of Compound Taxation.

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. 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.