An Inquiry into the Nature and Causes of the Wealth of Nations - Adam Smith (ebooks children's books free .TXT) 📗
- Author: Adam Smith
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any new charge upon the sovereign. The other expenses of
government were, the greater part of them, very moderate. The
administration of justice, it has been shewn, instead of being a
cause of expense was a source of revenue. The labour of the
country people, for three days before, and for three days after,
harvest, was thought a fund sufficient for making and maintaining
all the bridges, highways, and other public works, which the
commerce of the country was supposed to require. In those
days the principal expense of the sovereign seems to have
consisted in the maintenance of his own family and household. The
officers of his household, accordingly, were then the great
officers of state. The lord treasurer received his rents.
The lord steward and lord chamberlain looked after the expense of
his family. The care of his stables was committed to the lord
constable and the lord marshal. His houses were all built in the
form of castles, and seem to have been the principal fortresses
which he possessed. The keepers of those houses or castles might
be considered as a sort of military governors. They seem to have
been the only military officers whom it was necessary to maintain
in time of peace. In these circumstances, the rent of a great
landed estate might, upon ordinary occasions, very well defray
all the necessary expenses of government.
In the present state of the greater part of the civilized
monarchies of Europe, the rent of all the lands in the country,
managed as they probably would be, if they all belonged to one
proprietor, would scarce, perhaps, amount to the ordinary revenue
which they levy upon the people even in peaceable times. The
ordinary revenue of Great Britain, for example, including not
only what is necessary for defraying the current expense of the
year, but for paying the interest of the public debts, and for
sinking a part of the capital of those debts, amounts to upwards
of ten millions a-year. But the land tax, at four shillings
in the pound, falls short of two millions a-year. This land
tax, as it is called however, is supposed to be one-fifth, not
only of the rent of all the land, but of that of all the houses,
and of the interest of all the capital stock of Great Britain,
that part of it only excepted which is either lent to the public,
or employed as farming stock in the cultivation of land. A very
considerable part of the produce of this tax arises from the rent
of houses and the interest of capital stock. The land tax of the
city of London, for example, at four shillings in the pound,
amounts to �123,399: 6: 7; that of the city of Westminster to
�63,092: 1: 5; that of the palaces of Whitehall and St. James’s,
to �30,754: 6: 3. A certain proportion of the land tax is, in
the same manner, assessed upon all the other cities and towns
corporate in the kingdom ; and arises almost altogether, either
from the rent of houses, or from what is supposed to be the
interest of trading and capital stock. According to the
estimation, therefore, by which Great Britain is rated to the
land tax, the whole mass of revenue arising from the rent of all
the lands, from that of all the houses, and from the interest of
all the capital stock, that part of it only excepted which is
either lent to the public, or employed in the cultivation of
land, does not exceed ten millions sterling a-year, the ordinary
revenue which government levies upon the people, even in
peaceable times. The estimation by which Great Britain is rated
to the land tax is, no doubt, taking the whole kingdom at an
average, very much below the real value ; though in several
particular counties and districts it is said to be nearly equal
to that value. The rent of the lands alone, exclusive of that of
houses and of the interest of stock, has by many people been
estimated at twenty millions; an estimation made in a great
measure at random, and which, I apprehend, is as likely to be
above as below the truth. But if the lands of Great Britain,
in the present state of their cultivation, do not afford a rent
of more than twenty millions a-year, they could not well afford
the half, most probably not the fourth part of that rent, if they
all belonged to a single proprietor, and were put under the
negligent, expensive, and oppressive management of his factors
and agents. The crown lands of Great Britain do not at present
afford the fourth part of the rent which could probably be drawn
from them if they were the property of private persons. If the
crown lands were more extensive, it is probable, they would be
still worse managed.
The revenue which the great body of the people derives from land
is, in proportion, not to the rent, but to the produce of the
land. The whole annual produce of the land of every country,
if we except what is reserved for seed, is either annually
consumed by the great body of the people, or exchanged for
something else that is consumed by them. Whatever keeps down the
produce of the land below what it would otherwise rise to, keeps
down the revenue of the great body of the people, still more than
it does that of the proprietors of land. The rent of land, that
portion of the produce which belongs to the proprietors, is
scarce anywhere in Great Britain supposed to be more than a third
part of the whole produce. If the land which, in one state of
cultivation, affords a revenue of ten millions sterling a-year,
would in another afford a rent of twenty millions ; the rent
being, in both cases, supposed a third part of the produce, the
revenue of the proprietors would be less than it otherwise might
be, by ten millions a-year only; but the revenue of the great
hotly of the people would be less than it otherwise might be, by
thirty millions a-year, deducting only what would be necessary
for seed. The population of the country would be less by the
number of people which thirty millions a-year, deducting always
the seed, could maintain, according to the particular mode of
living, and expense which might take place in the different ranks
of men, among whom the remainder was distributed.
Though there is not at present in Europe, any civilized state of
any kind which derives the greater part of its public revenue
from the rent of lands which are the property of the state; yet,
in all the great monarchies of Europe, there are still many large
tracts of land which belong to the crown. They are generally
forest, and sometimes forests where, after travelling several
miles, you will scarce find a single tree; a mere waste and loss
of country, in respect both of produce and population. In every
great monarchy of Europe, the sale of the crown lands would
produce a very large sum of money, which, if applied to the
payment of the public debts, would deliver from mortgage a much
greater revenue than any which those lands have even afforded to
the crown. In countries where lands, improved and cultivated very
highly, and yielding, at the time of sale, as great a rent as can
easily be got from them, commonly sell at thirty years purchase;
the unimproved, uncultivated, and low-rented crown lands, might
well be expected to sell at forty, fifty, or sixty years
purchase. The crown might immediately enjoy the revenue
which this great price would redeem from mortgage. In the course
of a few years, it would probably enjoy another revenue. When the
crown lands had become private property, they would, in the
course of a few years, become well improved and well cultivated.
The increase of their produce would increase the population of
the country, by augmenting the revenue and consumption of the
people. But the revenue which the crown derives from the duties
or custom and excise, would necessarily increase with the revenue
and consumption of the people.
The revenue which, in any civilized monarchy, the crown derives
from tlhe crown lands, though it appears to cost nothing to
individuals, in reality costs more to the society than perhaps
any other equal revenue which the crown enjoys. It would, in
all cases, be for the interest of the society, to replace this
revenue to the crown by some other equal revenue, and to divide
the lands among the people, which could not well be done better,
perhaps, than by exposing them to public sale.
Lands, for the purposes of pleasure and magnificence, parks,
gardens, public walks, etc. possessions which are everywhere
considered as causes of expense, not as sources of revenue, seem
to be the only lands which, in a great and civilized monarchy,
ought to belong to the crown.
Public stock and public lands, therefore, the two sources of
revenue which may peculiarly belong to the sovereign or
commonwealth, being both improper and insufficient funds for
defraying the necessary expense of any great and civilized state
; it remains that this expense must, the greater part of it, be
defrayed by taxes of one kind or another; the people contributing
a part of their own private revenue, in order to make up a public
revenue to the sovereign or commonwealth.
PART II.
Of Taxes.
The private revenue of individuals, it has been shown in the
first book of this Inquiry, arises, ultimately from three
different sources ; rent, profit, and wages. Every tax must
finally be paid from some one or other of those three different
sources of revenue, or from all of them indifferently. I shall
endeavour to give the best account I can, first, of those taxes
which, it is intended should fall upon rent; secondly, of those
which, it is intended should fall upon profit ; thirdly, of those
which, it is intended should fall upon wages ; and fourthly, of
those which, it is intended should fall indifferently upon all
those three different sources of private revenue. The particular
consideration of each of these four different sorts of taxes will
divide the second part of the present chapter into four articles,
three of which will require several other subdivisions. Many of
these taxes, it will appear from the following review, are not
finally paid from the fund, or source of revenue, upon which it
is intended they should fall.
Before I enter upon the examination of particular taxes,it is
necessary to premise the four following maximis with regard to
taxes in general.
1. The subjects of every state ought to contribute towards the
support of the government, as nearly as possible, in proportion
to their respective abilities; that is, in proportion to the
revenue which they respectively enjoy under the protection of the
state. The expense of government to the individuals of a great
nation, is like the expense of management to the joint tenants of
a great estate, who are all obliged to contribute in proportion
to their respective interests in the estate. In the obsevation or
neglect of this maxim, consists what is called the equality or
inequality of taxation. Every tax, it must be observed once
for all, which falls finally upon one only of the three sorts of
revenue above mentioned, is necessarily unequal, in so far as it
does not affect the other two. In the following examination of
different taxes, I shall seldom take much farther notice of this
sort of inequality; but shall, in most cases, confine my
observations to that inequality which is occasioned by a
particular tax falling unequally upon that particular sort of
private revenue which is affected by it.
2.
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