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[V.ii.e] Taxes upon the Rent of Houses - Adam Smith, Glasgow Edition of the Works and Correspondence Vol. 2b An Inquiry Into the Nature and Causes of the Wealth of Nations, Vol. 2 [1776]

Edition used:

An Inquiry Into the Nature and Causes of the Wealth of Nations, Vol. I and II, ed. R. H. Campbell and A. S. Skinner, vol. II of the Glasgow Edition of the Works and Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1981).

Part of: The Glasgow Edition of the Works and Correspondence of Adam Smith, 7 vols.

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Taxes upon the Rent of Houses

1The rent of a house may be distinguished into two parts, of which the one may very properly be called the Building rent; the other is commonly called the Ground rent.

2The building rent is the interest or profit of the capital expended in building the house. In order to put the trade of a builder upon a level with other trades, it is necessary that this rent should be sufficient, first, to pay him the same interest which he would have got for his capital if he had lent it upon good security; and, secondly, to keep the house in constant repair, or, what comes to the same thing, to replace, within a certain term of years, the capital which had been employed in building it. The building rent, or the ordinary profit of building is, therefore, every where regulated by the ordinary interest of money.1 Where the market rate of interest is four per cent. the rent of a house which, over and above paying the ground rent, affords six, or six and a half per cent. upon the whole expence of building, may perhaps afford a sufficient profit to the builder. Where the market rate of interest is five per cent., it may perhaps require seven or seven and a half per cent. If, in proportion to the interest of money, the trade of the builder affords at any time a much greater profit than this, it will soon draw so much capital from other trades as will reduce the profit to its proper level. If it affords at any time much less than this, other trades will soon draw so much capital from it as will again raise that profit.

3Whatever part of the whole rent of a house is over and above what is sufficient for affording this reasonable profit, naturally goes to the ground–rent; and where the owner of the ground and the owner of the building are two different persons, is, in most cases, compleatly paid to the former. This surplus rent is the price which the inhabitant of the house pays for some real or supposed advantage of the situation. In country houses, at a distance from any great town, where there is plenty of ground to chuse upon, the ground rent is scarce any thing, or no more than what the ground which the house stands upon would pay if employed in agriculture. In country villas in the neighbourhood of some great town, it is sometimes a good deal higher; and the peculiar conveniency or beauty of situation is there frequently very well paid for.2 Ground rents are generally highest in the capital, and in those particular parts of it where there happens to be the greatest demand for houses, whatever be the reason of that demand, whether for trade and business, for pleasure and society, or for mere vanity and fashion.

4A tax upon house–rent, payable by the tenant and proportioned to the whole rent of each house, could not, for any considerable time at least, affect the building rent. If the builder did not get his reasonable profit, he would be obliged to quit the trade; which, by raising the demand for building, would in a short time bring back his profit to its proper level with that of other trades. Neither would such a tax fall altogether upon the ground–rent; but it would divide itself in such a manner as to fall, partly upon the inhabitant of the house, and partly upon the owner of the ground.

5Let us suppose, for example, that a particular person judges that he can afford for house–rent an expence of sixty pounds a year; and let us suppose too that a tax of four shillings in the pound, or of one–fifth, payable by the inhabitant, is laid upon house–rent. A house of sixty pounds rent will in this case cost him seventy–two pounds a year, which is twelve pounds more than he thinks he can afford. He will, therefore, content himself with a worse house, or a house of fifty pounds rent, which, with the additional ten pounds that he must pay for the tax, will make up the sum of sixty pounds a year, the expence which he judges he can afford; and in order to pay the tax he will give up a part of the additional conveniency which he might have had from a house of ten pounds a year more rent. He will give up, I say, a part of this additional conveniency; for he will seldom be obliged to give up the whole, but will, in consequence of the tax, get a better house for fifty pounds a year, than he could have got if there had been no tax. For as a tax of this kind, by taking away this particular competitor, must diminish the competition for houses of sixty pounds rent, so it must likewise diminish it for those of fifty pounds rent, and in the same manner for those of all other rents, except the lowest rent, for which it would for some time increase the competition. But the rents of every class of houses for which the competition was diminished, would necessarily be more or less reduced. As no part of this reduction, however, could, for any considerable time at least, affect the building rent; the whole of it must in the long–run necessarily fall upon the ground–rent. The final payment of this tax, therefore, would fall, partly upon the inhabitant of the house, who, in order to pay his share, would be obliged to give up a part of his conveniency; and partly upon the owner of the ground, who, in order to pay his share, would be obliged to give up a part of his revenue. In what proportion this final payment would be divided between them, it is not perhaps very easy to ascertain. The division would probably be very different in different circumstances, and a tax of this kind might, according to those different circumstances, affect very unequally both the inhabitant of the house and the owner of the ground.

6The inequality with which a tax of this kind might fall upon the owners of different ground–rents, would arise altogether from the accidental inequality of this division. But the inequality with which it might fall upon the inhabitants of different houses would arise, not only from this, but from another cause. The proportion of the expence of house–rent to the whole expence of living, is different in the different degrees of fortune. It is perhaps highest in the highest degree, and it diminishes gradually through the inferior degrees, so as in general to be lowest in the lowest degree. The necessaries of life occasion the great expence of the poor. They find it difficult to get food, and the greater part of their little revenue is spent in getting it. The luxuries and vanities of life occasion the principal expence of the rich;3 and a magnificent house embellishes and sets off to the best advantage all the other luxuries and vanities which they possess. A tax upon house–rents, therefore, would in general fall heaviest upon the rich; and in this sort of inequality there would not, perhaps, be any thing very unreasonable. It is not very unreasonable that the rich should contribute to the publick expence, not only in proportion to their revenue, but something more than in that proportion.

7The rent of houses, though it in some respects resembles the rent of land, is in one respect essentially different from it. The rent of land is paid for the use of a productive subject.4 The land which pays it produces it. The rent of houses is paid for the use of an unproductive subject. Neither the house nor the ground which it stands upon produce any thing. The person who pays the rent, therefore, must draw it from some other source of revenue, distinct from and independent of this subject.5 A tax upon the rent of houses, so far as it falls upon the inhabitants, must be drawn from the same source as the rent itself, and must be paid from their revenue, whether derived from the wages of labour, the profits of stock, or the rent of land. So far as it falls upon the inhabitants, it is one of those taxes which fall, not upon one only, but indifferently upon all the three different sources of revenue; and is in every respect of the same nature as a tax upon any other sort of consumable commodities. In general there is not perhaps, any one article of expence or consumption by which the liberality or narrowness of a man’s whole expence can be better judged of, than by his house rent. A proportional tax upon this particular article of expence might, perhaps, produce a more considerable revenue than any which has hitherto been drawn from it in any part of Europe. If the tax indeed was very high, the greater part of people would endeavour to evade it, as much as they could, by contenting themselves with smaller houses, and by turning the greater part of their expence into some other channel.

8The rent of houses might easily be ascertained with sufficient accuracy, by a policy of the same kind with that which would be necessary for ascertaining the ordinary rent of land. Houses not inhabited ought to pay no tax. A tax upon them would fall altogether upon the proprietor, who would thus be taxed for a subject which afforded him neither conveniency nor revenue. Houses inhabited by the proprietor ought to be rated, not according to the expence which they might have cost in building, but according to the rent which an equitable arbitration might judge them likely to bring, if leased to a tenant. If rated according to the expence which they may have cost in building, a tax of three or four shillings in the pound, joined with other taxes, would ruin almost all the rich and great families of this, and, I believe, of every other civilized country. Whoever will examine, with attention, the different town and country houses of some of the richest and greatest families in this country, will find that, at the rate of only six and a half, or seven per cent. upon the original expence of building, their house–rent is nearly equal to the whole neat rent of their estates. It is the accumulated expence of several successive generations, laid out upon objects of great beauty and magnificence, indeed; but, in proportion to what they cost, of very small exchangeable value* .

9Ground–rents are a still more proper subject of taxation than the rent of houses. A tax upon ground–rents would not raise the rents of houses. It would fall altogether upon the owner of the ground–rent, who acts always as a monopolist, and exacts the greatest rent which can be got for the use of his ground. More or less can be got for it according as the competitors happen to be richer or poorer, or can afford to gratify their fancy for a particular spot of ground at a greater or smaller expence. In every country the greatest number of rich competitors is in the capital, and it is there accordingly that the highest ground–rents are always to be found. As the wealth of those competitors would in no respect be increased by a tax upon ground–rents, they would not probably be disposed to pay more for the use of the ground. Whether the tax was to be advanced by the inhabitant, or by the owner of the ground, would be of little importance. The more the inhabitant was obliged to pay for the tax, the less he would incline to pay for the ground; so that the final payment of the tax would fall altogether upon the owner of the ground–rent. The ground–rents of uninhabited houses ought to pay no tax.

10Both ground–rents and the ordinary rent of land are a species of revenue which the owner, in many cases, enjoys without any care or attention of his own.6 Though a part of this revenue should be taken from him in order to defray the expences of the state, no discouragement will thereby be given to any sort of industry. The annual produce of the land and labour of the society, the real wealth and revenue of the great body of the people, might be the same after such a tax as before. Ground–rents, and the ordinary rent of land, are, therefore, perhaps, the species of revenue which can best bear to have a peculiar tax imposed upon them.

11Ground–rents seem, in this respect, a more proper subject of peculiar taxation than even the ordinary rent of land. The ordinary rent of land is, in many cases, owing partly at least to the attention and good management of the landlord.7 A very heavy tax might discourage too much this attention and good management. Ground–rents, so far as they exceed the ordinary rent of land, are altogether owing to the good government of the sovereign, which, by protecting the industry either of the whole people, or of the inhabitants of some particular place, enables them to pay so much more than its real value for the ground which they build their houses upon; or to make to its owner so much more than compensation for the loss which he might sustain by this use of it. Nothing can be more reasonable than that a fund which owes its existence to the good government of the state, should be taxed peculiarly, or should contribute something more than the greater part of other funds, towards the support of that government.

12Though, in many different countries of Europe, taxes have been imposed upon the rent of houses, I do not know of any in which ground–rents have been considered as a separate subject of taxation. The contrivers of taxes have, probably, found some difficulty in ascertaining what part of the rent ought to be considered as ground–rent, and what part ought to be considered as building rent. It should not, however, seem very difficult to distinguish those two parts of the rent from one another.

13In Great Britain the rent of houses is supposed to be taxed in the same proportion as the rent of land, by what is called the annual land–tax. The valuation, according to which each different parish and district is assessed to this tax, is always the same. It was originally extremely unequal, and it still continues to be so. Through the greater part of the kingdom this tax falls still more lightly upon the rent of houses than upon that of land. In some few districts only, which were originally rated high, and in which the rents of houses have fallen considerably, the land tax of three or four shillings in the pound, is said to amount to an equal proportion of the real rent ofb houses. Untenanted houses, though by law subject to the tax, are, in most districts, exempted from it by the favour of the assessors; and this exemption sometimes occasions some little variation in the rate of particular houses, though that of the district is always the same. cImprovements of rent; by new buildings, repairs, &c.; go to the discharge of the district, which occasions still further variations in the rate of particular houses.c

14In the province of Holland* every house is taxed at two and half per cent. of its value, without any regard either to the rent which it actually pays, or to the circumstance of its being tenanted or untenanted. There seems to be a hardship in obliging the proprietor to pay a tax for an untenanted house, from which he can derive no revenue; especially so very heavy a tax. In Holland, where the market rate of interest does not exceed three per cent. two and a half per cent. upon the whole value of the house, must, in most cases, amount to more than a third of the building–rent, perhaps of the whole rent. The valuation, indeed, according to which the houses are rated, though very unequal, is said to be always below the real value. When a house is rebuilt, improved, or enlarged, there is a new valuation, and the tax is rated accordingly.

15The contrivers of the several taxes which in England have, at different times, been imposed upon houses, seem to have imagined that there was some great difficulty in ascertaining, with tolerable exactness, what was the real rent of every house. They have regulated their taxes, therefore, according to some more obvious circumstance, such as they had probably imagined would, in most cases, bear some proportion to the rent.

16The first tax of this kind was hearth–money; or a tax of two shillings upon every hearth.8 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.9

17The 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.10 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.11 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.

18This tax was afterwards repealed, and in the room of it was established the window–tax, which has undergone too several alterations and augmentations.12 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 two–pence, 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.

19The 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 is 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.

20The 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 every where 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.

article ii

Taxes upon Profit, or upon the Revenue arising from Stock

1The 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.

2This 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.1 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.2 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.

3The 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 compleatly compensating the whole risk and trouble of employing the stock.3 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 after the tax than before it: so, for the same reason, a tax upon the interest of money could not raise the rate of interest; the quantity of stock or money in the country, like the quantity of land, being supposed to remain the same after the tax as before it. The ordinary rate of profit, it has been shewn in the first book, is every where regulated by the quantity of stock to be employed in proportion to the quantity of the employment, or of the business which must be done by it.4 But the quantity of the employment, or of the business to be done by stock, could neither be increased nor diminished by any tax upon the interest of money. If the quantity of the stock to be employed, therefore, was neither increased nor diminished by it, the ordinary rate of profit would necessarily remain the same. But the portion of this profit necessary for compensating the risk and trouble of the employer, would likewise remain the same; that risk and trouble being in no respect altered. The residue, therefore, that portion which belongs to the owner of the stock, and which pays the interest of money, would necessarily remain the same too. At first sight, therefore, the interest of money seems to be a subject as fit to be taxed directly as the rent of land.

4There are, however, two different circumstances which render the interest of money a much less proper subject of direct taxation than the rent of land.

5First, the quantity and value of the land which any man possesses can never be a secret, and can always be ascertained with great exactness.5 But the whole amount of the capital stock which he possesses is almost always a secret, and can scarce ever be ascertained with tolerable exactness. It is liable, besides, to almost continual variations. A year seldom passes away, frequently not a month, sometimes scarce a single day, in which it does not rise or fall more or less. An inquisition into every man’s private circumstances, and an inquisition which, in order to accommodate the tax to them, watched over all the fluctuations of his fortune, would be a source of such continual and endless vexation as no people could support.

6Secondly, land is a subject which cannot be removed; whereas stock easily may. The proprietor of land is necessarily a citizen of the particular country in which his estate lies. The proprietor of stock is properly a citizen of the world, and is not necessarily attached to any particular country.6 He would be apt to abandon the country in which he was exposed to a vexatious inquisition, in order to be assessed to a burdensome tax, and would remove his stock to some other country where he could, either carry on his business, or enjoy his fortune more at his ease. By removing his stock he would put an end to all the industry which it had maintained in the country which he left. Stock cultivates land; stock employs labour. A tax which tended to drive away stock from any particular country, would so far tend to dry up every source of revenue, both to the sovereign and to the society. Not only the profits of stock, but the rent of land and the wages of labour, would necessarily be more or less diminished by its removal.

7The nations, accordingly, who have attempted to tax the revenue arising from stock, instead of any severe inquisition of this kind, have been obliged to content themselves with some very loose, and, therefore, more or less arbitrary estimation. The extreme inequality and uncertainty of a tax assessed in this manner, can be compensated only by its extreme moderation, in consequence of which every man finds himself rated so very much below his real revenue, that he gives himself little disturbance though his neighbour should be rated somewhat lower.7

8By what is called the land–tax in England, it was intended thata stock should be taxed in the same proportion as land. When the tax upon land was at four shillings in the pound, or at one–fifth of the supposed rent, it was intended that stock should be taxed at one–fifth of the supposed interest. When the present annual land–tax was first imposed, the legal rate of interest was six per cent.8 Every hundred pounds stock, accordingly, was supposed to be taxed at twenty–four shillings, the fifth part of six pounds. Since the legal rate of interest has been reduced to five per cent.9 every hundred pounds stock is supposed to be taxed at twenty shillings only. The sum to be raised, by what is called the land–tax, was divided between the country and the principal towns. The greater part of it was laid upon the country; and of what was laid upon the towns, the greater part was assessed upon the houses. What remained to be assessed upon the stock or trade of the towns (for the stock upon the land was not meant to be taxed) was very much below the real value of that stock or trade. Whatever inequalities, therefore, there might be in the original assessment, gave little disturbance. Every parish and district still continues to be rated for its land, its houses, and its stock, according to the original assessment; and the almost universal prosperity of the country, which in most places has raised very much the value of all these, has rendered those inequalities of still less importance now. The rate too upon each district continuing always the same, the uncertainty of this tax, so far as it might be assessed upon the stock of any individual, has been very much diminished, as well as rendered of much less consequence. If the greater part of the lands of England are not rated to the land–tax at half their actual value, the greater part of the stock of England is, perhaps, scarce rated at the fiftieth part of its actual value. In some towns the whole land–tax is assessed upon houses; as in Westminster, where stock and trade are free. It is otherwise in London.

9In all countries a severe inquisition into the circumstances of private persons has been carefully avoided.

10At Hamburgh* every inhabitant is obliged to pay to the state, one–fourth per cent. of all that he possesses; and as the wealth of the people of Hamburgh consists principally in stock, this tax may be considered as a tax upon stock. Every man assesses himself, and, in the presence of the magistrate, puts annually into the publick coffer a certain sum of money, which he declares upon oath to be one–fourth per cent. of all that he possesses, but without declaring what it amounts to, or being liable to any examination upon that subject. This tax is generally supposed to be paid with great fidelity. In a small republick, where the people have entire confidence in their magistrates, are convinced of the necessity of the tax for the support of the state, and believe that it will be faithfully applied to that purpose, such conscientious and voluntary payment bmayb sometimes be expected. It is not peculiar to the people of Hamburgh.

11The canton of Underwald in Switzerland is frequently ravaged by storms and inundations, andc is thereby exposed to extraordinary expences. Upon such occasions the people assemble, and every one is said to declare with the greatest frankness what he is worth, in order to be taxed accordingly. At Zurich the law orders, that, in cases of necessity, every one should be taxed in proportion to his revenue; the amount of which he is obliged to declare upon oath. They have no suspicion, it is said, that any of their fellow–citizens will deceive them. At Basil the principal revenue of the state arises from a small custom upon goods exported. All the citizens make oath that they will pay every three months all the taxes imposed by the law. All merchants and even all inn–keepers are trusted with keeping themselves the account of the goods which they sell either within or without the territory. At the end of every three months they send this account to the treasurer, with the amount of the tax computed at the bottom of it. It is not suspected that the revenue suffers by this confidence* .

12To oblige every citizen to declare publickly upon oath the amount of his fortune, must not, it seems, in those Swiss cantons, be reckoned a hardship. At Hamburgh it would be reckoned the greatest. Merchants engaged in the hazardous projects of trade, all tremble at the thoughts of being obliged at all times to expose the real state of their circumstances. The ruin of their credit and the miscarriage of their projects, they foresee, would too often be the consequence. A sober and parsimonious people, who are strangers to all such projects, do not feel that they have occasion for any such concealment.10

13In Holland, soon after the exaltation of the late prince of Orange to the stadtholdership, a tax of two per cent. or the fiftieth penny, as it was called, was imposed upon the whole substance of every citizen. Every citizen assessed himself and paid his tax in the same manner as at Hamburgh; and it was in general supposed to have been paid with great fidelity. The people had at that time the greatest affection for their new government, which they had just established by a general insurrection. The tax was to be paid but once; in order to relieve the state in a particular exigency. It was, indeed, too heavy to be permanent. In a country where the market rate of interest seldom exceeds three per cent.,11 a tax of two per cent. amounts to thirteen shillings and fourpence in the pound upon the highest neat revenue which is commonly drawn from stock. It is a tax which very few people could pay without encroaching more or less upon their capitals. In a particular exigency the people may, from great publick zeal, make a great effort, and give up even a part of their capital, in order to relieve the state. But it is impossible that they should continue to do so for any considerable time; and if they did, the tax would soon ruin them so compleatly as to render them altogether incapable of supporting the state.

14The tax upon stock imposed by the land–tax bill in England, though it is proportioned to the capital, is not intended to diminish or take away any part of that capital. It is meant only to be a tax upon the interest of money proportioned to that upon the rent of land; so that when the latter is at four shillings in the pound, the former may be at four shillings in the pound too. The tax at Hamburgh, and the still more moderate taxes of Underwald and Zurich, are meant, in the same manner, to be taxes, not upon the capital, but upon the interest or neat revenue of stock. That of Holland was meant to be a tax upon the capital.

[1 ]See above, II.iv.17, where Smith discusses the relationship between interest and the rent of land, and I.ix.22, where he considers that between interest and profit.

[2 ]See above, I.xi.b.4, where Smith discusses the relationship between land rent and situation.

[3 ]See above, I.xi.c.31.

[4 ]See above, II.v.12.

[5 ]See above, II.i.12.

[aa* ]Since the first publication of this book, a tax nearly upon the above–mentioned principles has been imposed.a [First by 18 George III, c. 26 (1778) and then by 19 George III, c. 59 (1779). Under the first statute the duty was at the rate of 6d. in the £ on houses of an annual value of £5 and under £50, and 1s. in the £ on houses of higher value. The later statute altered the rates to 6d. in the £ on houses of £5 and under £20 annual value, 9d. in the £ on those of £20 and under £40, and 1s. in the £ on those of higher value.]

[6 ]The same point is made at I.xi.p.8.

[7 ]A rather more qualified view is stated above, I.xi.a.2, and see also V.iii.54.

[b]the 1

[c–c]2–6

[* ]Memoires concernant les Droits, &c. p. 223. [‘Toutes les Maisons en général, soit qu’elles soient louées, soit qu’elles ne le soient pas, sont taxées à Deux & demi pour cent de leur valeur, suivant l’estimation qui en est faite sans égard au prix des loyers ni aux réparations on entretien; les estimations sont en général sont inégales, mais toujours inférieures à la valeur réalle.’ (De Beaumont, Mémoires, i.223.)]

[8 ]14 Charles II, c. 10 (1662); 15 Charles II, c. 13 (1663); 16 Charles II, c. 3 (1664).

[9 ]Abolished because ‘grievous to the People’ by 1 William and Mary, c. 10 (1688) in Statutes of the Realm, vi.61–2; 1 William and Mary, sess. 1, c. 10 in Ruffhead’s edition.

[10 ]7 and 8 William III, c. 18 (1695).

[11 ]8 Anne, c. 10 (1709) in Statutes of the Realm, ix.207; 8 Anne, c. 4 in Ruffhead’s edition.

[12 ]20 George II, c. 3 (1746); 31 George II, c. 22 (1757).

[1 ]See above, I.ix.18 and I.vi.18.

[2 ]See below, V.ii.g.8, V.ii.i.2, V.ii.k.9.

[3 ]See above, I.ix.18, 19.

[4 ]See above, I.ix.

[5 ]Cf. LJ (B) 310, ed. Cannan 239: ‘It is easy to levy a tax upon land because it is evident what quantity everyone possesses, but it is very difficult to lay a tax upon stock or money without very arbitrary proceedings.’

[6 ]See above, II.v.14, III.iv.24, and below, V.ii.k.80, V.iii.55. The point is made by Montesquieu, Esprit, XX.xxiii.1, where it is also remarked that ‘moveable effects, as money, notes, bills of exchange, stocks in companies, vessels, and, in fine, all merchandise, belong to the whole world in general; in this respect, it is composed of but one single state, of which all the societies upon earth are members.’

[7 ]LJ (B) 311, ed. Cannan 240, points out with reference to land, stock, or money that of these only land is taxed in England. He also indicates that the English avoid taxes on stock ‘from a kind of delicacey with regard to examining into the circumstances of particular persons, which is apparently an infringement upon liberty’ (313, ed. Cannan 241).

[a]the 6

[8 ]By 12 Charles II, c. 13 (1660).

[9 ]By 13 Anne, c. 15 (1713) in Statutes of the Realm, ix.928; 12 Anne, st. 2, c. 16 in Ruffhead’s edition. See above, I.ix.5, and below V.iii.27.

[* ]Memoires concernant les Droits, tome i. p. 74. [De Beaumont’s account is: ‘La Taille consiste dans le Quart pour cent que tout habitant, sans exception, est obligé de payer de tout ce qu’il possède en meubles & immeubles. Il ne se fait aucune répartition de cette taille. Chaque bourgeois se cottise lui–même & porte son imposition à la Maison de ville, & on n’exige autre chose de lui, sinon le serment qu’il est obligé de faire que ce qu’il paye, forme véritablement ce qu’il doit acquitter.’ (Mémoires, i.74.)]

[b–b]om. 5

[c]it 5–6

[dd* ]Memoires concernant les Droits,d tom. i, p. 163, 166, 171. [The accounts of the procedure in the three places cited, according to De Beaumont, is as follows:

Underwald: ‘Le territoire d’Underwald est si souvent dévasté par des orages & des inondations, que ce Canton a quelquefois des dépenses extraordinaires à acquitter. Dans ces cas, le peuple s’assemble, chacun convient, avec la plus grande franchise, du bien dont il jouit, & est taxé tantôt à 5 sous, quelquefois à 10 sous par 1000 livres de capital. On décide dans la même assemblée l’espace de temps pendant lequel l’impôt doit subsister.’ (Mémoires, i.171.)

Zurich: ‘Une loi expresse porte que dans des cas de besoin, chaque Particulier sera taxé à proportion de ses revenus, en quoi qu’ils puissent consister, & qu’il indiquera sous la foi de serment.’ (Mémoires, i.163.)

Basle: ‘Le revenu le plus considérable du Canton, consiste dans les droits de Douane. Chaque Bourgeois prête tous les ans serment de payer ce qu’il devra d’impôt, & tous les trois mois le Marchand & le Cabaretier, qui forment entr’eux une très–grande partie de la bourgeoisie envoient, soit aux Trésoriers de l’État, soit aux Baillis, un compte de ce qu’ils ont vendu, soit dans le pays soit à l’étranger, & règlent au bas du compte le montant de la somme qu’ils jugent devoir légitimement payer.’ (Mémoires, i.166–7.)]

[10 ]LJ (B) 310, ed. Cannan 239–40, comments: ‘It is a hardship upon a man in trade to oblige him to shew his books, which is the only way in which we can know how much he is worth. It is a breach of liberty, and may be productive of very bad consequences by ruining his credit. The circumstances of people in trade are at sometimes far worse than others.’

[11 ]See above, I.ix.10.

[aa* ]Since the first publication of this book, a tax nearly upon the above–mentioned principles has been imposed.a [First by 18 George III, c. 26 (1778) and then by 19 George III, c. 59 (1779). Under the first statute the duty was at the rate of 6d. in the £ on houses of an annual value of £5 and under £50, and 1s. in the £ on houses of higher value. The later statute altered the rates to 6d. in the £ on houses of £5 and under £20 annual value, 9d. in the £ on those of £20 and under £40, and 1s. in the £ on those of higher value.]

[dd* ]Memoires concernant les Droits,d tom. i, p. 163, 166, 171. [The accounts of the procedure in the three places cited, according to De Beaumont, is as follows:

Underwald: ‘Le territoire d’Underwald est si souvent dévasté par des orages & des inondations, que ce Canton a quelquefois des dépenses extraordinaires à acquitter. Dans ces cas, le peuple s’assemble, chacun convient, avec la plus grande franchise, du bien dont il jouit, & est taxé tantôt à 5 sous, quelquefois à 10 sous par 1000 livres de capital. On décide dans la même assemblée l’espace de temps pendant lequel l’impôt doit subsister.’ (Mémoires, i.171.)

Zurich: ‘Une loi expresse porte que dans des cas de besoin, chaque Particulier sera taxé à proportion de ses revenus, en quoi qu’ils puissent consister, & qu’il indiquera sous la foi de serment.’ (Mémoires, i.163.)

Basle: ‘Le revenu le plus considérable du Canton, consiste dans les droits de Douane. Chaque Bourgeois prête tous les ans serment de payer ce qu’il devra d’impôt, & tous les trois mois le Marchand & le Cabaretier, qui forment entr’eux une très–grande partie de la bourgeoisie envoient, soit aux Trésoriers de l’État, soit aux Baillis, un compte de ce qu’ils ont vendu, soit dans le pays soit à l’étranger, & règlent au bas du compte le montant de la somme qu’ils jugent devoir légitimement payer.’ (Mémoires, i.166–7.)]

[a]3–6

[d]Id. 1–2