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in character.1 Everything was ruled by what was known as the arbitrio, that is, the arbitrary judgment of the authorities, and the income tax was utilized as the most potent engine of oppression or of favoritism.

The Florentine income tax lasted for only a relatively short time. With the final downfall of democratic liberties and with the reintroduction of the aristocratic régime in the sixteenth century, not only the income tax but all direct taxation of the wealthier classes disappeared. Before long the public revenues in Florence, as well as in most of the other Italian commonwealths, came to be derived chiefly from indirect taxes, supplemented in some cases by a kind of vague ability tax, or so-called "family" tax, the burden of which rested primarily on the poor.

§ 2. The General or State Taxes

The medieval general or state taxes were a repetition on a somewhat larger scale of the local taxes. If we recall the development in England, it will be remembered that the principal tax was really a tax on property and produce.2 It was known for some time as the fifteenth and tenth, because in the case of real estate a fifteenth was levied on the rental value or produce, while in the case of chattels a tenth of the selling value was nominally taken by the tax-gatherer. It will also be remembered how, in the hope of preventing the gradual diminution of the yield, the tax was changed from a percentage to an apportioned tax; that is, instead of actually assessing a fifteenth of the produce and a tenth of the selling value respectively, an arbitrary sum was fixed upon as representing what a fifteenth or tenth ought to yield, and this arbitrary sum was then apportioned among the various local divisions. Finally, it will be remembered how personal property slipped out of the assessment lists, and how it gradually

1 Cf., for various aspects of the situation, Canestrini, op. cit., pp. 145, 164, 176,

419, 475.

2 Seligman, Essays in Taxation, pp. 45 et seq.

became impossible to raise the required amounts. When the fifteenth and tenth disappeared, the general property tax was reintroduced in the sixteenth century under the name of the General Subsidy. After a time, however, the three phenomena repeated themselves: the change from a personal to an apportioned tax, the gradual escape of personal property, and the fading away of the yield. During the middle of the seventeenth century the old system was tried anew under the name of Commonwealth Monthly Assessments, with precisely the same results. Finally, after the Revolution, the attempt was made for the fourth time by the so-called Property Tax. The old story, however, again repeated itself, and in 1697 Parliament fixed the sum which a given rate was expected to produce; that is, it became an apportioned tax of stated amount.1

The English tax at the close of the seventeenth century, like all its mediæval predecessors, was a combination of property and produce tax. In the case of land, the tax was assessed on the rack rent or yearly value in 1692 at the rate of four shillings for every pound of rent. In the case of personal property, the tax was assessed on the value of the property, but as the rental of land was deemed to be six per cent of its selling value, the same supposition was applied to personal property, so that four shillings on the pound of rental value would be equivalent to twenty-four shillings on every hundred pounds of capital value. The tax on "personal estates" was therefore levied at the rate of twentyfour shillings for every hundred pounds of selling value. Finally, in the case of "any person exercising any publick office or employment of profit," the tax was assessed directly upon these salaries at the rate of four shillings for every pound of salary.3

The tax, therefore, was a property tax, except that the value of lands was reached through their rent, and with the further

9 and 10 William and Mary, c. 10.

24 William and Mary, c. I.

3 Dowell, The History of Taxation and Taxes in England, 2d ed., London, 1888, vol. iii, p. 84, gives a very unclear and confused account of the tax.

exception that property in public offices was taxed through the salaries themselves. It was hence a combination of property and produce tax; and it is especially to be noted. that no gains or profits were taxed unless, with the one exception of public salaries, they were derived from visible property. Moreover, while according to the intent of the law the chief revenue was to come from personal property, and only the necessary remainder was to be levied on the produce of real estate, in actual practice virtually nothing was assessed except real estate, so that the tax soon became a land tax. In fact, by the year 1697 it was officially termed "an aid by a land tax," or, in common parlance, the Land Tax. The salaries part of the tax lingered along during the eighteenth century, and in 1758 Pitt made an effort to increase the very scanty returns by imposing a new duty at the rate of a shilling in the pound on all offices, except naval and military offices, with a salary exceeding £100.1 The law, however, was more honored in the breach than in the observance, and soon became a dead letter. Thus, what was originally a general property tax with a slight element of product taxation degenerated into a land tax. Of a general income tax we find no trace at all, except the sporadic examples in 1435 and 1449, when a short-lived experiment was made with the introduction of the French system.2

The only important country in which we find the development of the income tax for state purposes before the nineteenth century is France. The leading French direct tax in the Middle Ages was the taille, the development of a charge that was universal throughout early medieval Europe and which, in England, had been known as tallage. The tallage was a more or less arbitrary feudal imposition upon the king's tenants, calculated primarily according to the amount of the land, but modified to some extent by general considerations of ability to pay. In England it disappeared at an early period, to merge into the general property taxes which have

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been discussed above. In France it survived until the Revolution, and became the leading direct tax, being composed of two parts, the taille réelle, levied on lands, and the taille personnelle, levied on individuals apart from their lands. The tax soon became honeycombed with abuses, whole classes of the population securing exemption from the burden, until it became a completely unequal and thoroughly arbitrary imposition upon the less well-to-do classes, resting upon considerations neither of property nor of income, but depending entirely upon the whim of the assessor.

At the close of the seventeenth century the fiscal situation of France had become so bad that increased revenue was imperatively necessary. France had by this time become a great industrial and commercial nation, and was far in advance not only of England, but of the adjoining countries. Accordingly, the government now thought that it would be possible to lay tribute upon these newer forms of wealth. After the elaboration of plans of tax reform in the shape of a general income tax by publicists like Vauban and Boisguilbert, the government decided to make the attempt. At first, however, it contented itself with introducing in 1697 a classified poll tax known as the capitation, or capitation graduée. This was a kind of class tax; that is to say, the tax was imposed upon individuals according to their social status, the rate for all members of the same class being identical. There were twenty-two classes, the tax ranging from one livre to two thousand livres. The capitation was suppressed in 1698, but reëstablished in 1701, and it was then gradually transformed into a tax on individual incomes, members of the same class now being rated differently. By 1705 the capitation, although still so called, had virtually become an income tax in three-fourths of the country, and lasted throughout the eighteenth century.1

Almost from the beginning, however, abuses disclosed themselves. In 1701, for instance, certain classes were permitted to compound for the tax, a practice known as abonne

1 For a general history of the capitation, see especially Clamageran, Histoire de l'Impôt en France, vol. iii, pp. 32-36 et seq. Paris, 1876.

ment. In 1705 the capitation was in very large measure simply added to the taille, just as in Massachusetts to-day the income tax is for the most part levied only on those who are already on the lists of the property tax. Then in 1708 began the period of exemptions, individuals as well as whole. classes being freed from the tax, until before long all the shortcomings of the old taille reappeared in the capitation. Toward the end of the century, whenever the capitation was still levied separately, it was assessed practically on the presumptive income of the individual as measured by his house. rent; and this part of the capitation was continued after the Revolution as a house-rentals tax. So far as it was levied at all on business incomes, it gave rise to the most enormous inequality and inquisition. The important point to remember, however, is that what was called in France the capitation or poll tax had become, according to the theory of the law at all events, an income tax.

With the comparative failure of the capitation as a fiscal device, the government resorted to other attempts to secure a revenue from incomes. Thus, in 1710, Louis XIV enacted the so-called dixième, or Tenth, which was supposed to be a tax of ten per cent on all incomes throughout the country. This tax, suppressed and reenacted from time to time, was converted in 1749 into a five per cent tax, or Twentieth (vingtième); and this continued until the Revolution, being supplemented by a second Twentieth in 1756 and a third Twentieth from 1760 to 1763, and again from 1783 to 1786.4

1 Clamageran, op. cit., p. 89.

2 Clamageran, op. cit., p. 90.

8 For the abuses connected with the capitation, see Clamageran, op. cit., pp. 329 et seq.

4 A detailed account of the Tenth and the Twentieth will be found in M. Houques-Fourcade, Les Impôts sur le Revenu en France au XVIII Siècle. Histoire de la Dixième et de la Cinquantième, Leur Application dans la Généralité de Guyenne. Paris, 1889. The cinquantième, or Fiftieth, referred to in the title, was a two per cent tax imposed on the produce of land in 1725. This was, however, abolished in 1727. A recent popular article on the Tenth and Twentieth, as well as on the Capitation and the Taille, is that of Charles de Lasteyrie, “L'Impôt sur le Revenu sous l'Ancien Régime" in the Revue des Deux Mondes, April, 1910.

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