THE EARLY PERSONAL TAXES.
§ 256. The purpose of this historical survey is not a collec tion of all sorts of curious and obscure facts from the records of all ages and all peoples, such as often characterizes the infan tile stage of historical research. It is of no consequence to us that certain kinds of taxes have made their appearance in this or that country at such or such a time during its development. What it concerns us to know is the relation of these forms of taxation to the political and fiscal development of a given people.
It is already a hundred years since K. H. Lang (in his His torische Entwicklung der Teutschen SteuervePfassung seit der Karolinger bis auf unsere Zeiten) discussed in this manner the phases of Ger man taxation in connection with the development of the military system. The motley array of varieties and forms of taxation is there exhibited, freed from the appearance of accident, and sub ject to the law of historical development.
It is also not to the purpose to sever the individual kinds of taxes which go to make up the fiscal system of each historical epoch from one another, and take up each one by itself. At the same time, the object of the present discussion could scarcely be accomplished without our singling out for examination cer tain leading groups of taxes which are to afford the material for the construction of our system.
No class of taxes is more deserving of such special attention than the one which, very significantly, makes its appearance right at the beginning, and recurs constantly in the later stages of the development of the tax system. For in spite of all reser vations, it remains true that the one tax which the groping hand of the primitive national economy, as well as the radicalism of advanced political systems, lays hold of, is above all others the tax of taxes. It is also a notable fact that on the most diverse occasions, based on the need of revenue or on the demand for equity in the distribution of the public burden, this one form of taxation has been resorted to for ages past, over and over again, for this reason if for no other, that it is the simplest in form.
§ 257. A characteristic of the old personal taxes is the fact that they were levied on some extraordinary occasion.' From the earliest beginnings down into the nineteenth century they are for the most part a temporary impost justified by a special plea of unusual necessity. This state of things changed only very slowly. The German writers on financial theory, even as late as the close of the eighteenth century, regarded the tax as an extraordinary impost, as a malady with respect to which there was an uncomfortable doubt whether it would ever be cured. Thiers reflects the sentiment of modern individualism in close touch with mediaeval individualism, when he airs his aversion to the direct tax in the assertion that it is characteristic of bar barous, as contrasted with civilized peoples.
The earliest form of this tax occurs in connection with the feudal state. In the place of personal service, and supplemen tary to the personal obligations of the vassal in cases of the bi nada necessitas (ransom of the sovereign, knighting of the vassal's son, betrothal of his daughter), the tax comes to be in times of war — adjutorium, scutagium, tallagium. The usual German term for it is " Bede "— as well as by its conventional Latin equivalent (petitio, rogatio, precaria), indicat ing a petitionary character, at least in its origin. Where, con trary to its nature, it takes on the character of a fixed burden, it is transformed into a burden on real property ; a fixed personal tax being, to the mediwval sense of personal liberty and dignity, a mark of the bondman. And as we have already found in the general survey of the historical development of the public econ omy (Book I. Chap. II.), this class of imposts blends with the peculiar burdens pertaining to villenage ; a fact which becomes intelligible when it is remembered that villenage originates in personal inability to bear arms.
It is quite in accord with the traditions of the feudal system that we find that the Great Elector of Brandenburg, as late as the year 1662, had gradually, and only after long and tedious negotiations with the estates of the realm, succeeded in substituting, in place of special grants for the purpose, fixed contributions from his terri tories toward the support of the standing army which he had created. At the same time the obligation of the knighthood to follow the sovereign in war was commuted into a money payment of forty thalers for each horseman.' In the towns, wherever the requirements of the tax administra tion permitted, the excise was generally introduced after 1667, to take the place of Contributions ; a step which lightened the taxes of the burghers and increased the revenue. The inadequacy of the Contribution became evident as early as the years 1677 and 1679, when an extraordinary subsidy, a " poll-money " [Kopfschoss], was levied on all inhabitants. In point of fact this contribution appears to have been an income tax ; we are told that (towards the total of 200,000 thalers) the Elector himself headed the list of contributors with a sum of 1000 thalers for his own person, 500 thalers for his consort, and so on for all the members of his house hold, with the purpose of taxing all inhabitants down to a mini mum rate of 4 groschen. This poll tax was repeated under his successor with increasing frequency but was made the subject of a formal waiver by Frederick William I. (1715), and was restricted to the case of a defensive war. Frederick the Great finally found other means of obtaining a revenue in order to provide for the heavy expenditures of the wars, and was able to leave the Prussian state at the end of his reign with a clear annual revenue of 20, 000,000 So far as this was accomplished by means of taxes it was by the use of those real taxes which are to us the opposite of'direct personal taxes.
The Contribution, however, was made use of by both the two great Prussian kings of the eighteenth century as the point of departure for reforms which prepared the way for the modern land tax by means of a registry of incomes ; they aimed partly to consolidate the burdens resting on the land into a single impost, partly to lessen the inequality of the burdens resting on land owned by peasants compared with that owned by the knight hood.' § 258. But even during these earlier centuries the personal taxes developed into quite a different form when employed under circumstances which approached modern political life in being freed from the trammels of the feudal system and the territorial state.
What I have in mind is the democratic organizations of the old cantons of Switzerland and the city republics of the Middle Ages.
The rule is the same here as elsewhere during those centuries. The tax is for the most part an extraordinary burden, levied to meet cases of special necessity or the exigencies of war. Still, in certain ones of them there is a relatively early development of a fixed tax constituting a permanent element of the public finances.
Looking first to the early democracies of Switzerland 2 we find that the facts are as follows. In most of these democracies a general tax on the country was resorted to only as an extraordinary resource when the ordinary revenues of the treasury were insuf ficient, especially in case of war. So, for example, in Uri it was usual to impose a general tax in times of need. This tax, by ancient usage, was primarily levied on landed property, which was assessed by public officials, the creditors the landowner being required to contribute toward the owner's payment of the tax in the proportion of their claims. At the same time, every body was required, under oath, to return to the proper authori ties all his other property, whether situated at home or abroad, whether in the form of securities, rents or business establish ments ; the penalty being confiscation of everything not so returned. The same is true of Schwyz, Nidwalden, etc. In Glarus, where the property tax occurs as early as the time of the wars of Burgundy, the religious convention of 1683 mentions as a customary source of revenue for the general treasury, " imposts per capita and on estates," what afterwards was usually spoken of as the Hab-, Gut- und Kopfsteuer. This was a combination of
the capitation tax with the property tax, such as occurs in the case of the general tax of the German Empire as early as the fifteenth century, and such as we find it in the extraordi nary taxes levied by the Great Elector and by Frederick I. In this latter case the capitation tax becomes incorporated with the privileges of the " independent gentleman " in a thoroughly democratic fashion ; so much so that it became a condition of participation in the public privileges and immunities. During the eighteenth century a "uniform general tax " [Einfache Landessteuer] was regularly levied (one in a thousand gulden of property and one-fourth gulden per capita). To prevent unequal taxation, the estates of the realm enacted in 1725 that all per sons must return, on honor, all their property, excepting only household articles and clothing ; if it appeared in case of suc cession that the property was greater than returned, then the amount concealed was to escheat to the state, the officials being for this purpose empowered to make the necessary official inventory.
§ 259. In the mediaeval towns we find something similar, only at a distinctly earlier date.
In Zurich, Hans Waldmann, who was chosen Burgomaster in 1483 in opposition to the old families, introduced, in the town and in the territory belonging to the town, both the salt tax and the so-called Reisbiichsen into which all taxable inhabitants were to pay a yearly contribution ; the purpose being to provide beforehand for the case of war in order to meet the expenses of war so much the more easily. It is true this tion, created under the democratic administration of Wald mann, disappeared with his overthrow. At the same time it is instructive to note that the Richtebrief of the citizens of Zurich' of the year 1 304 speaks of the Gewerf, that is to say, the property tax, as a tax of frequent occurrence. When ever [Swenne], says the document, the Gewerf is levied, the tables in which the Gewerf is engrossed are to be read in the presence of all the citizens. This is followed by provisions respecting exemption from taxes and liability to pay taxes ; among other things a provision for the equal taxation of citizens of Zurich living outside the city, whether knights or citizens. In the year 1417 a property tax (Gutsteuer) was levied, for three years, towards which the Great Council ordained that everyone must pay one penny in the pound on all his estate, real and personal, house, chattels, clothing and raiment, except only the harness in which he served in the city guard. From persons who live expen sively or are engaged in a profitable business and still own but little property, the assessors of the tax are empowered to require payment in proportion to the profitableness of the business.
Side by side with this Gutsteuer was a Leibsteuer (poll tax) levied on all persons. It appears that during the fifteenth cen tury, and also during the sixteenth and seventeenth centuries, the was continually approaching the character of a fixed impost, being thrown off in displeasure every once in a while by the citi zens after having been in force for decades together (not unlike the fortune which the English income tax has experienced in the nineteenth century).
In Duderstadt 4 the scot [Schoss] makes its appearance as a regular and considerable factor in the annual revenues, about the middle of the fifteenth century. The accounts rendered for each year invariably begin with a list of those liable to pay the scot, that is, of persons required to pay a tax on land, on house and home, tithes, incomes, rents, and personal property (except clothing), church livings and foundations, the guilds, the citizens and the disfranchised inhabitants, the citizens living outside, the Jews, and the outlying farms. At Michaelmas, at the beginning of each fiscal year, the clerk of the treasury drew up the tax lists, and the tax was paid according to these lists, in two installments. Anyone who failed to pay the scot forfeited his brewery privi leges for the year, or else he was obliged to pay an additional one-fourth of the scot as a penalty. The scot amounted to more than half the aggregate annual revenue. As early as 1435 and 1438 there occur discussions between the town council and the guilds with regard to increasing the scot. The guilds demanded that property [Erbe und Gut] should be taxed at a higher rate than the earnings of the handicraftsmen ; they succeeded in effecting that the assessment was to be made before the nine guild masters. On account of the town's being involved in a variety of feuds, an extra scot (hulpe, hulpegelt) amounting to about one-fifth of the regular tax was levied, and that repeatedly, between 1443 and 1456. The guilds made this a lever by which to further their demands for a fuller participation in the city's affairs, and in fact it enabled them to effect the appointment of the so-called Viermiinner, and so to control and even to dis place the treasurer.
§ 260. There is one thing, especially, about the old personal taxes which impresses on the modern observer the closeness of the connection between the past and the present, viz., the vary ing character of the measures taken to insure a proper assess ment of the taxpayer.' We find a high-strung reliance on the uprightness of the taxpayers on the one side, and severe penalties on the other. There is a great variation from place to place and often from one decade to another.
Adam Smith cites, as examples of the exceptional conditions under which he regards the income tax as admissible, the taxation of Hamburg, Zurich, Unterwalden and Holland. Regarding Hamburg he relates that (as was true of Bremen until very lately) every taxpayer assessed himself, and paid the amount due (one fourth per cent. of his property) into the public treasury. mak ing oath as to its correctness without naming the sum. Smith explains the general confidence entertained as to the honest pay ment of this tax' by pointing out that the community in question was a small one, that the people had great confidence in their gov ernment, and that they were thoroughly persuaded of the neces sity of the tax. Of Zurich he relates—and similarly of the other Swiss cantons—that each citizen publicly states the amount of his property under oath ; such a measure would seem a very great hardship to a body of citizens engaged in trade, as the people of Hamburg were, while it would seem quite unobjectionable to a sober and thrifty people like the Swiss.
In point of fact, this contrast of race and occupation which Smith points out does not explain the matter. Within the Swiss cantons, and often in places but little removed from each other, the arrangements differ widely.
In the Zurich Richtebrief of 1304 it is provided, as has been pointed out, that the amounts assessed are to be read in public. But Bluntschli' tells us that in the fifteenth century the amount of the tax was thrown into a vessel by the taxpayers without being counted, and he adds (much the same as what Smith says of Hamburg) that the reasons for this method were personal confidence on the one hand, and the wish to avoid pub lication of the amount of property belonging to the individuals, on the other. Close by, in the Province of Zurich, in the village of Elgg, the tax law was quite a different one. If the magistrate and the council were of opinion that anyone had, under oath, returned his property at too low a figure, any citizen whosoever might "seize and purchase"' the property at the price returned.
In the canton of again, self-assessment prevailed from 1725 to 1735; but in 1735 a committee was appointed to manage the assessment, and in 1764 a law was passed making the assessment a duty of the magistrates. Then, on complaints being made of inequality of taxation, self-assessment was rein troduced in 1781 and was confirmed in 1794, but only to be abolished again in 1796 as "altogether too rigorous," and again replaced by official assessment.