or a tax of two shillings upon every hearth.
In order to ascertain how many hearths were
in the house, it was necessary that the tax-gatherer
should enter every room in it. This
odious visit rendered the tax odious. Soon
after the Revolution, therefore, it was abolished
as a badge of slavery.
The next tax of this kind was a tax of two
shillings upon every dwelling-house inhabited.
A house with ten windows to pay four shillings
more. A house with twenty windows
and upwards to pay eight shillings. This tax
was afterwards so far altered, that houses with
twenty windows, and with less than thirty,
were ordered to pay ten shillings, and those
with thirty windows and upwards to pay twenty
shillings. The number of windows can, in
most cases, be counted from the outside, and,
in all cases, without entering every room in
the house. The visit of the tax-gatherer, therefore,
was less offensive in this tax than in the
hearth-money.
This tax was afterwards repealed, and in
the room of it was established the window-tax,
which has undergone two several alterations
and augmentations. The window tax, as it
stands at present (January 1775), over and
above the duty of three shillings upon every
house in England, and of one shilling upon
every house in Scotland, lays a duty upon
every window, which in England augments
gradually from twopence, the lowest rate upon
houses with not more than seven windows, to
two shillings, the highest rate upon houses
with twenty-five windows and upwards.
The principal objection to all such taxes is
their inequality; an inequality of the worst
kind, as they must frequently fall much heavier
upon the poor than upon the rich. A
house of ten pounds rent in a country town,
may sometimes have more windows than a
house of five hundred pounds rent in London;
and though the inhabitant of the former
in likely to be a much poorer man than that of
the latter, yet, so far as his contribution is regulated
by the window tax, he must contribute
more to the support of the state. Such
taxes are, therefore, directly contrary to the
first of the four maxims above mentioned.
They do not seem to offend much against any
of the other three.
The natural tendency of the window tax,
and of all other taxes upon houses, is to lower
rents. The more a man pays for the tax, the
less, it is evident, he can afford to pay for the
rent. Since the imposition of the window tax,
however, the rents of houses have, upon the
whole, risen more or less, in almost every
town and village of Great Britain, with which
I am acquainted. Such has been, almost
everywhere, the increase of the demand for
houses, that it has raised the rents more than
the window tax could sink them; one of the
many proofs of the great prosperity of the
country, and of the increasing revenue of its
inhabitants. Had it not been for the tax,
rents would probably have risen still higher.
ART. II.—Taxes upon Profit, or upon the Revenue
arising from Stock.
The revenue or profit arising from stock
naturally divides itself into two parts; that
which pays the interest, and which belongs to
the owner of the stock; and that surplus part
which is over and above what is necessary for
paying the interest.
This latter part of profit is evidently a subject
not taxable directly. It is the compensation,
and, in most cases, it is no more than a
very moderate compensation for the risk and
trouble of employing the stock. The employer
must have this compensation, otherwise he cannot,
consistently with his own interest, continue
the employment. If he was taxed directly,
therefore, in proportion to the whole
profit, he would be obliged either to raise the
rate of his profit, or to charge the tax upon
the interest of money; that is, to pay less interest.
If he raised the rate of his profit in
proportion to the tax, the whole tax, though
it might be advanced by him, would be finally
paid by one or other of two different sets
of people, according to the different ways in
which he might employ the stock of which he
had the management. If he employed it as
a farming stock, in the cultivation of land,
he could raise the rate of his profit only by retaining
a greater portion, or, what comes to
the same thing, the price of a greater portion,
of the produce of the land; and as this could
be done only by a reduction of rent, the final
payment of the tax would fall upon the landlord.
If he employed it as a mercantile or
manufacturing stock, he could raise the rate
of his profit only by raising the price of his
goods; in which case, the final payment of
the tax would fall altogether upon the consumers
of those goods. If he did not raise
the rate of his profit, he would be obliged to
charge the whole tax upon that part of it
which was allotted for the interest of money.
He could afford less interest for whatever
stock he borrowed, and the whole weight of
the tax would, in this case, fall ultimately upon
the interest of money. So far as he could
not relieve himself from the tax in the one
way, he would be obliged to relieve himself
in the other.
The interest of money seems, at first sight,
a subject equally capable of being taxed directly
as the rent of land. Like the rent of
land, it is a neat produce, which remains, after
completely compensating the whole risk and
trouble of employing the stock. As a tax
upon the rent of land cannot raise rents, because
the neat produce which remains, after
replacing the stock of the farmer, together
with his reasonable profit, cannot be greater