An inquiry into the nature and causes of the wealth of

741

Adam Smith

Fourthly, such taxes, by subjecting at least the dealers in the

taxed commodities, to the frequent visits and odious examination

of the tax-gatherers, expose them sometimes, no doubt, to some

degree of oppression, and always to much trouble and vexation;

and though vexation, as has already been said, is not strictly speak-

ing expense, it is certainly equivalent to the expense at which ev-

ery man would be willing to redeem himself from it. The laws of

excise, though more effectual for the purpose for which they were

instituted, are, in this respect, more vexatious than those of the

customs. When a merchant has imported goods subject to certain

duties of customs; when he has paid those duties, and lodged the

goods in his warehouse; he is not, in most cases, liable to any

further trouble or vexation from the custom-house officer. It is

otherwise with goods subject to duties of excise. The dealers have

no respite from the continual visits and examination of the excise

officers. The duties of excise are, upon this account, more un-

popular than those of the customs; and so are the officers who

levy them. Those officers, it is pretended, though in general, per-

haps, they do their duty fully as well as those of the customs; yet,

as that duty obliges them to be frequently very troublesome to

some of their neighbours, commonly contract a certain hardness

of character, which the others frequently have not. This observa-

tion, however, may very probably be the mere suggestion of fraudu-

lent dealers, whose smuggling is either prevented or detected by

their diligence.

The inconveniencies, however, which are, perhaps, in some de-

gree inseparable from taxes upon consumable communities, fall

as light upon the people of Great Britain as upon those of any

other country of which the government is nearly as expensive.

Our state is not perfect, and might be mended; but it is as good,

or better, than that of most of our neighbours.

In consequence of the notion, that duties upon consumable

goods were taxes upon the profits of merchants, those duties have,

in some countries, been repeated upon every successive sale of the

goods. If the profits of the merchant-importer or merchant-manu-

facturer were taxed, equality seemed to require that those of all the

middle buyers, who intervened between either of them and the

consumer, should likewise be taxed. The famous alcavala of Spain

seems to have been established upon this principle. It was at first a

tax of ten per cent. afterwards of fourteen per cent. and it is at

present only six per cent. upon the sale of every sort of property

whether moveable or immoveable; and it is repeated every time

the property is sold. {Memoires concernant les Droits, etc. tom. i,

p. 15} The levying of this tax requires a multitude of revenue of-

ficers, sufficient to guard the transportation of goods, not only

from one province to another, but from one shop to another. It

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742

The Wealth of Nations

subjects, not only the dealers in some sorts of goods, but those in

all sorts, every farmer, every manufacturer, every merchant and

shopkeeper, to the continual visit and examination of the tax-gath-

erers. Through the greater part of the country in which a tax of

this kind is established, nothing can be produced for distant sale.

The produce of every part of the country must be proportioned to

the consumption of the neighbourhood. It is to the alcavala, ac-

cordingly, that Ustaritz imputes the ruin of the manufactures of

Spain. He might have imputed to it, likewise, the declension of

agriculture, it being imposed not only upon manufactures, but

upon the rude produce of the land.

In the kingdom of Naples, there is a similar tax of three per

cent. upon the value of all contracts, and consequently upon that

of all contracts of sale. It is both lighter than the Spanish tax, and

the greater part of towns and parishes are allowed to pay a compo-

sition in lieu of it. They levy this composition in what manner

they please, generally in a way that gives no interruption to the

interior commerce of the place. The Neapolitan tax, therefore, is

not near so ruinous as the Spanish one.

The uniform system of taxation, which, with a few exception of

no great consequence, takes place in all the different parts of the

united kingdom of Great Britain, leaves the interior commerce of

the country, the inland and coasting trade, almost entirely free.

The inland trade is almost perfectly free; and the greater part of

goods may be carried from one end of the kingdom to the other,

without requiring any permit or let-pass, without being subject to

question, visit or examination, from the revenue officers. There

are a few exceptions, but they are such as can give no interruption

to any important branch of inland commerce of the country. Goods

carried coastwise, indeed, require certificates or coast-cockets. If

you except coals, however, the rest are almost all duty-free. This

freedom of interior commerce, the effect of the uniformity of the

system of taxation, is perhaps one of the principal causes of the

prosperity of Great Britain; every great country being necessarily

the best and most extensive market for the greater part of the pro-

ductions of its own industry. If the same freedom in consequence

of the same uniformity, could be extended to Ireland and the plan-

tations, both the grandeur of the state, and the prosperity of every

part of the empire, would probably be still greater than at present.

In France, the different revenue laws which take place in the

different provinces, require a multitude of revenue officers to sur-

round, not only the frontiers of the kingdom, but those of almost

each particular province, in order either to prevent the importa-

tion of certain goods, or to subject it to the payment of certain

duties, to the no small interruption of the interior commerce of

the country. Some provinces are allowed to compound for the

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