Taxes upon consumable commodities may either be levied by an administration of which the officers are appointed by government and are immediately accountable to government, of which the revenue must in this case vary from year to year according to the occasional variations in the produce of the tax, or they may be let in farm for a rent certain, the farmer being allowed to appoint his own officers, who, though obliged to levy the tax in the manner directed by the law, are under his immediate inspection, and are immediately accountable to him.The best and most frugal way of levying a tax can never be by farm.Over and above what is necessary for paying the stipulated rent, the salaries of the officers, and the whole expense of administration, the farmer must always draw from the produce of the tax a certain profit proportioned at least to the advance which he makes, to the risk which he runs, to the trouble which he is at, and to the knowledge and skill which it requires to manage so very complicated a concern.Government, by establishing an administration under their own immediate inspection of the same kind with that which the farmer establishes, might at least save this profit, which is almost always exorbitant.To farm any considerable branch of the public revenue requires either a great capital or a great credit; circumstances which would alone restrain the competition for such an undertaking to a very small number of people.Of the few who have this capital or credit, a still smaller number have the necessary knowledge or experience;another circumstance which restrains the competition still further.The very few, who are in condition to become competitors, find it more for their interest to combine together;to become co-partners instead of competitors, and when the farm is set up to auction, to offer no rent but what is much below the real value.In countries where the public revenues are in farm, the farmers are generally the most opulent people.Their wealth would alone excite the public indignation, and the vanity which almost always accompanies such upstart fortunes, the foolish ostentation with which they commonly display that wealth, excites that indignation still more.
The farmers of the public revenue never find the laws too severe which punish any attempt to evade the payment of a tax.
They have no bowels for the contributors, who are not their subjects, and whose universal bankruptcy, if it should happen the day after their farm is expired, would not much affect their interest.In the greatest exigencies of the state, when the anxiety of the sovereign for the exact payment of his revenue is necessarily the greatest, they seldom fail to complain that without laws more rigorous than those which actually take place, it will be impossible for them to pay even the usual rent.In those moments of public distress their demands cannot be disputed.The revenue laws, therefore, become gradually more and more severe.The most sanguinary are always to be found in countries where the greater part of the public revenue is in farm; the mildest, in countries where it is levied under the immediate inspection of the sovereign.Even a bad sovereign feels more compassion for his people than can ever be expected from the farmers of his revenue.He knows that the permanent grandeur of his family depends upon the prosperity of his people, and he will never knowingly ruin that prosperity for the sake of any momentary interest of his own.It is otherwise with the farmers of his revenue, whose grandeur may frequently be the effect of the ruin, and not of the prosperity of his people.
A tax is sometimes not only farmed for a certain rent, but the farmer has, besides, the monopoly of the commodity taxed.In France, the duties upon tobacco and salt are levied in this manner.In such cases the farmer, instead of one, levies two exorbitant profits upon the people; the profit of the farmer, and the still more exorbitant one of the monopolist.Tobacco being a luxury, every man is allowed to buy or not to buy as he chooses.
But salt being a necessary, every man is obliged to buy of the farmer a certain quantity of it; because, if he did not buy this quantity of the farmer, he would, it is presumed, buy it of some smuggler.The taxes upon both commodities are exorbitant.The temptation to smuggle consequently is to many people irresistible, while at the same time the rigour of the law, and the vigilance of the farmer's officers, render the yielding to that temptation almost certainly ruinous.The smuggling of salt and tobacco sends every year several hundred people to the galleys, besides a very considerable number whom it sends to the gibbet.Those taxes levied in this manner yield a very considerable revenue to government.In 1767, the farm of tobacco was let for twenty-two millions five hundred and forty-one thousand two hundred and seventy-eight livres a year.That of salt, for thirty-six millions four hundred and ninety-four thousand four hundred and four livres.The farm in both cases was to commence in 1768, and to last for six years.Those who consider the blood of the people as nothing in comparison with the revenue of the prince, may perhaps approve of this method of levying taxes.Similar taxes and monopolies of salt and tobacco have been established in many other countries; particularly in the Austrian and Prussian dominions, and in the greater part of the states of Italy.