An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith [e book reader pdf TXT] 📗
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are unjust. But a simple augmentation is an injustice of open
violence; whereas an adulteration is an injustice of treacherous
fraud. This latter operation, therefore, as soon as it has been
discovered, and it could never be concealed very long, has always
excited much greater indignation than the former. The coin, after
any considerable augmentation, has very seldom been brought back
to its former weight ; but after the greatest adulterations, it
has almost always been brought back to its former fineness. It
has scarce ever happened, that the fury and indignation of the
people could otherwise be appeased.
In the end of the reign of Henry VIII., and in the beginning of
that of Edward VI., the English coin was not only raised in its
denomination, but adulterated in its standard. The like frauds
were practised in Scotland during the minority of James VI. They
have occasionally been practised in most other countries.
That the public revenue of Great Britain can never be completely
liberated, or even that any considerable progress can ever be
made towards that liberation, while the surplus of that revenue,
or what is over and above defraying the annual expense of the
peace establishment, is so very small, it seems altogether in
vain to expect. That liberation, it is evident, can never be
brought about, without either some very considerable augmentation
of the public revenue, or some equally considerable reduction of
the public expense.
A more equal land tax, a more equal tax upon the rent of houses,
and such alterations in the present system of customs and excise
as those which have been mentioned in the foregoing chapter,
might, perhaps, without increasing the burden of the greater part
of the people, but only distributing the weight of it more
equally upon the whole, produce a considerable augmentation of
revenue. The most sanguine projector, however, could scarce
flatter himself, that any augmentation of this kind would be such
as could give any reasonable hopes, either of liberating the
public revenue altogether, or even of making such progress
towards that liberation in time of peace, as either to prevent or
to compensate the further accumulation of the public debt in the
next war.
By extending the British system of taxation to all the different
provinces of the empire, inhabited by people either of British or
European extraction, a much greater augmentation of revenue might
be expected. This, however, could scarce, perhaps, be done,
consistently with the principles of the British constitution,
without admitting into the British parliament, or, if you will,
into the states-general of the British empire, a fair and equal
representation of all those different provinces ; that of each
province bearing the same proportion to the produce of its taxes,
as the representation of Great Britain might bear to the produce
of the taxes levied upon Great Britain. The private interest of
many powerful individuals, the confirmed prejudices of great
bodies of people, seem, indeed, at present, to oppose to so great
a change, such obstacles as it may be very difficult, perhaps
altogether impossible, to surmount. Without, however, pretending
to determine whether such a union be practicable or
impracticable, it may not, perhaps, be improper, in a speculative
work of this kind, to consider how far the British system of
taxation might be applicable to all the different provinces of
the empire ; what revenue might be expected from it, if so
applied ; and in what manner a general union of this kind might
be likely to affect the happiness and prosperity of the
differrent provinces comprehended within it. Such a speculation,
can, at worst, be regarded but as a new Utopia, less amusing,
certainly, but no more useless and chimerical than the old one.
The land-tax, the stamp duties, and the different duties of
customs and excise, constitute the four principal branches of the
British taxes.
Ireland is certainly as able, and our American and West India
plantations more able, to pay a land tax, than Great Britain.
Where the landlord is subject neither to tythe nor poor’s rate,
he must certainly be more able to pay such a tax, than where he
is subject to both those other burdens. The tythe, where there is
no modus, and where it is levied in kind, diminishes more what
would otherwise be the rent of the landlord, than a land tax
which really amounted to five shillings in the pound. Such a
tythe will be found, in most cases, to amount to more than a
fourth part of the real rent of the land, or of what remains
after replacing completely the capital of the farmer, together
with his reasonable profit. If all moduses and all impropriations
were taken away, the complete church tythe of Great Britain and
Ireland could not well be estimated at less than six or seven
millions. If there was no tythe either in Great Britain or
Ireland, the landlords could afford to pay six or seven millions
additional land tax, without being more burdened than a very
great part of them are at present. America pays no tythe, and
could, therefore, very well afford to pay a land tax. The lands
in America and the West Indies, indeed, are, in general, not
tenanted nor leased out to farmers. They could not, therefore, be
assessed according to any rent roll. But neither were the lands
of Great Britain, in the 4th of William and Mary, assessed
according to any rent roll, but according to a very loose and
inaccurate estimation. The lands in America might be assessed
either in the same manner, or acording to an equitable valuation,
in consequence of an accurate survey, like that which was lately
made in the Milanese, and in the dominions of Austria, Prussia,
and Sardinia.
Stamp duties, it is evident, might be levied without any
variation, in all countries where the forms of law process, and
the deeds by which property, both real and personal, is
transferred, are the same, or nearly the same.
The extension of the custom-house laws of Great Britain to
Ireland and the plantations, provided it was accompanied, as in
justice it ought to be, with an extension of the freedom of
trade, would be in the highest degree advantageous to both. All
the invidious restraints which at present oppress the trade of
Ireland, the distinction between the enumerated and
non-enumerated commodities of America, would be entirely at an
end. The countries north of Cape Finisterre would be as open to
every part of the produce of America, as those south of that cape
are to some parts of that produce at present. The trade between
all the different parts of the British empire would, in
consequence of this uniformity in the custom-house laws, be as
free as the coasting trade of Great Britain is at present. The
British empire would thus afford, within itself, an immense
internal market for every part of the produce of all its
different provinces. So great an extension of market would soon
compensate, both to Ireland and the plantations, all that they
could suffer from the increase of the duties of customs.
The excise is the only part of the British system of taxation,
which would require to be varied in any respect, according as it
was applied to the different provinces of the empire. It might be
applied to Ireland without any variation ; the produce and
consumption of that kingdom being exactly of tho same nature with
those of Great Britain. In its application to America and the
West Indies, of which the produce and consumption are so very
different from those of Great Britain, some modification might be
necessary, in the same manner as in its application to the cyder
and beer counties of England.
A fermented liquor, for example, which is called beer, but which,
as it is made of molasses, bears very little resemblance to our
beer, makes a considerable part of the common drink of the people
in America. This liquor, as it can be kept only for a few days,
cannot, like our beer, be prepared and stored up for sale in
great breweries ; but every private family must brew it for their
own use, in the same manner as they cook their victuals. But to
subject every private family to the odious visits and examination
of the tax-gatherers, in the same manner as we subject the
keepers of alehouses and the brewers for public sale, would be
altogether inconsistent with liberty. If, for the sake of
equality, it was thought necessary to lay a tax upon this liquor,
it might be taxed by taxing the material of which it is made,
either at the place of manufacture, or, if the circumstances of
the trade rendered such an excise improper, by laying a duty upon
its importation into the colony in which it was to be consumed.
Besides the duty of one penny a-gallon imposed by the British
parliament upon the importation of molasses into America, there
is a provincial tax of this kind upon their importation into
Massachusetts Bay, in ships belonging to any other colony, of
eightpence the hogshead; and another upon their importation from
the northern colonies into South Carolina, of fivepence the
gallon. Or, if neither of these methods was found convenient,
each family might compound for its consumption of this liquor,
either according to the number of persons of which it consisted,
in the same manner as private families compound for the malt tax
in England; or according to the different ages and sexes of those
persons, in the same manner as several different taxes are levied
in Holland ; or, nearly as Sir Matthew Decker proposes, that all
taxes upon consumable commodities should be levied in England.
This mode of taxation, it has already been observed, when applied
to objects of a speedy consumption, is not a very convenient one.
It might be adopted, however, in cases where no better could be
done.
Sugar, rum, and tobacco, are commodities which are nowhere
necessaries of life, which are become objects of almost universal
consumption, and which are, therefore, extremely proper subjects
of taxation. If a union with the colonies were to take place,
those commodities might be taxed, either before they go out of
the hands of the manufacturer or grower ; or, if this mode of
taxation did not suit the circumstances of those persons, they
might be deposited in public warehouses, both at the place of
manufacture, and at all the different ports of the empire, to
which they might afterwards be transported, to remain there,
under the joint custody of the owner and the revenue officer,
till such time as they should be delivered out, either to the
consumer, to the merchant-retailer for home consumption, or to
the merchant-exporter; the tax not to be advanced till such
delivery. When delivered out for exportation, to go duty-free,
upon proper security being given, that they should really be
exported out of the empire. These are, perhaps, the principal
commodities, with regard to which the union with the colonies
might require some considerable change in the present system of
British taxation.
What might be the amount of the revenue which this system of
taxation, extended to all the different provinces of the empire,
might produce, it must, no doubt, be altogether impossible to
ascertain with tolerable exactness. By means of this system,
there is annually levied in Great Britain, upon less than eight
millions of people, more than ten millions of revenue. Ireland
contains more than two millions of people, and, according to the
accounts laid before the congress, the twelve associated
provinces of America contain more than three. Those accounts,
however, may have been exaggerated, in order, perhaps, either to
encourage their own people, or to intimidate those of this
country ; and we shall suppose, therefore,
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