4. Every tax ought to be so contrived, as
both to take out and to keep out of the pockets
of the people as little as possible, over and
above what it brings into the public treasury
of the state. A tax may either take out or
keep out of the pockets of the people a great
deal more than it brings into the public
treasury, in the four following ways. First,
the levying of it may require a great number
of officers, whose salaries may eat up the
greater part of the produce of the tax, and
whose perquisites may impose another additional
tax upon the people. Secondly, it may
obstruct the industry of the people, and discourage
them from applying to certain branches
of business which might give maintenance
and employment to great multitudes. While
it obliges the people to pay, it may thus diminish,
or perhaps destroy, some of the funds
which might enable them more easily to do so.
Thirdly, by the forfeitures and other penalties
which those unfortunate individuals incur,
who attempt unsuccessfully to evade the tax,
it may frequently ruin them, and thereby put
an end to the benefit which the community
might have received from the employment of
their capitals. An injudicious tax offers a
great temptation to smuggling. But the
penalties of smuggling must arise in proportion
to the temptation. The law, contrary to
all the ordinary principles of justice, first
creates the temptation, and then punishes those
who yield to it; and it commonly enhances
the punishment, too, in proportion to the very
circumstance which ought certainly to alleviate
it, the temptation to commit the crime.[52]
Fourthly, by subjecting the people to the
frequent visits and the odious examination of
the tax-gatherers, it may expose them to much
unnecessary trouble, vexation, and oppression;
and though vexation is not, strictly speaking,
expense, it is certainly equivalent to the expense
at which every man would be willing
to redeem himself from it. It is in some one
or other of these four different ways, that
taxes are frequently so much more burdensome
to the people than they are beneficial to the
sovereign.
The evident justice and utility of the foregoing
maxims have recommended them, more
or less, to the attention of all nations. All
nations have endeavoured, to the best of their
judgment, to render their taxes as equal as
they could contrive; as certain, as convenient
to the contributor, both the time and the mode
of payment, and in proportion to the revenue
which they brought to the prince, as little
burdensome to the people. The following
short review of some of the principal taxes
which have taken place in different ages and
countries, will show, that the endeavours of
all nations have not in this respect been equally
successful.
ART. I.—Taxes upon Rent—Taxes upon the
Rent of Land.
A tax upon the rent of land may either be
imposed according to a certain canon, every
district being valued at a certain rent, which
valuation is not afterwards to be altered; or
it may be imposed in such a manner, as to
vary with every variation in the real rent of
the land, and to rise or fall with the improvement
or declaration of its cultivation.
A land tax which, like that of Great Britain,
is assessed upon each district according
to a certain invariable canon, though
it should be equal at the time of its first establishment,
necessarily becomes unequal in
process of time, according to the unequal degrees
of improvement or neglect in the cultivation
of the different parts of the country.
In England, the valuation, according
to which the different counties and parishes
were assessed to the land tax by the 4th of
William and Mary, was very unequal even at
its first establishment. This tax, therefore,
so far offends against the first of the four
maxims above mentioned. It is perfectly
agreeable to the other three. It is perfectly
certain. The time of payment for the tax,
being the same as that for the rent, is as convenient
as it can be to the contributor. Though
the landlord is, in all cases, the real contributor,
the tax is commonly advanced by the
tenant, to whom the landlord is obliged to allow
it in the payment of the rent. This tax
is levied by a much smaller number of officers
than any other which affords nearly the same
revenue. As the tax upon each district does
not rise with the rise of the rent, the sovereign
does not share in the profits of the landlord's
improvements. Those improvements sometimes
contribute, indeed, to the discharge of
the other landlords of the district. But the
aggravation of the tax, which this may sometimes
occasion upon a particular estate, is always
so very small, that it never can discourage
those improvements, nor keep down the produce
of the land below what it would otherwise
rise to. As it has no tendency to diminish
the quantity, it can have none to raise the
price of that produce. It does not obstruct
the industry of the people; it subjects the
landlord to no other inconveniency besides the
unavoidable one of paying the tax.
The advantage, however, which the landlord
has derived from the invariable constancy
of the valuation, by which all the lands of
Great Britain are rated to the land-tax, has
been principally owing to some circumstances
altogether extraneous to the nature of the
tax.