THOUGHTS ON TAXATION, IN A LETTER TO A FRIEND. WITH OBSERVATIONS and REFLECTIONS on the consequences resulting from the proposed Plan, humbly submitted to the good People of the State of NEW-YORK.
NEW-YORK; Printed by WEBSTER and M'LEAN, No. 32, Maiden-Lane. M, DCC, LXXXIV.
FROM the various conversations that we have had on the subject of taxation, and still more from the absurd notions that many of your neighbours have entertained on this matter, in imagining that the income of their farms would scarcely be sufficient to defray the certain annual demand to pay the principal and interest of the foreign foederal and internal debt, as well as the absolute and necessary expence of government, I am induced to offer a Scheme whereby it will appear, that a sum far exceeding whatever possibly could be imagined would be required, might be raised without oppressing the inhabitants of Town or Country; and that too, in so simple and intelligible a manner, that every person, even of the meanest capacity, may comprehend and digest the whole: but as the sum specified can never be wanted nor required by the State, one quarter part of this proposed [Page iv]tax is here, by specimen, submitted to the consideration of yourself and friends; and if you should think it worthy of being given to the Public at large, I have no objection; as I should be infinitely happy in contributing my small mite towards the general good and prosperity of this flourishing and Independent State.
A SCHEME
TO raise One Million of Pounds annually, within the State of New-York, without taxing arable, wood land, or meadows; neither horses, nor cattle of any kind; much less silver plate, watches, &c. Also to remove the pernicious custom of false oaths, and smuggling, by a just and equitable Taxation; which would render this State the most happy of the Thirteen; since it would neither pay a land tax, nor customs, excise, or assessment on goods imported from any part of the world.
| IN the year 1776, the Province of New-York, was said to contain two hundred and fifty thousand inhabitants, amongst which there must have been at least sixty thousand sencible men: let us suppose that on a medium in seven years, two thirds of this number had children annually; and that in the said period two hundred thousand had died, including such as fell in battle, expired in jail, or were early taken away: likewise, that the number [Page 6]of emigrants, who had come from different parts of Europe, with their offspring, after having been residents in this State, amounted to twenty thousand; then the State of New-York, (the latter end of this year 1783,) ought to contain three hundred and fifty thousand souls, which, according to the usual way of reckoning, would require fifty thousand houses to hold them. Whereof let us suppose four thousand two hundred in New-York, as they stood computed in the year aforesaid, although greatly diminished since; and those taxed from ten* to fifty pounds each in proportion to the annual rent, classed in nine or ten different classes, they would produce at a medium the annual revenue of | £. 126,000 |
| Wharfs, warehouses, &c. to be rated in a like proportion of income, would yield at least. | 19,200 |
| Five thousand eight hundred houses in Albany, and the various Towns along the North River, as well as throughout Long-Island, and West-Chester, taxed at forty shillings to ten pounds each, they would produce on a medium. | 34,800 |
| Forty thousand houses in the Country, throughout all the Counties in the State, and on farms of various value and extent, proportioned in some degree to the supposed worth of the farm; or rather, to prevent disputes by comparison, to be divided into twelve or thirteen classes: they might be taxed from twenty shillings to twenty-five pounds each, and on a medium would produce a revenue of | 520 |
| Carried over | £. 700,000 |
| Brought over | £. 700,000 |
| Duties on goods and all manner of luxuries, reckoning at twenty shillings per head, and deducting one seventh part of the number, for infants at the breast, and the poor who are unable to pay, would produce | 300,000 |
| £. 1,000,000 |
BUT in order to prevent smuggling, which might greatly lessen the amount of duties, let us suppose the above sum of £. 300,000, was to be levied on the individuals by a tax, called the Equivalent of Duties, in much the same proportion as houses are taxed; that is to say, from one shilling to forty shillings each person, according to the respective ability of the inhabitant; and let all duties, imposts, and every other rate be done away: so that the country shall be free and open to receive goods from the whole world, without payment of any custom, toll, or assessment whatever.
SINCE nothing can be more destructive to the morals of a people, than the encouragement which seems to be given to perjury by the common forms of a Custom-House, and even with that infamous clog, it would be impossible to prevent smuggling on so extensive a shore, unless such a number of Costom-House Officers were employed as might become dangerous to the constitution, as well as disgusting and oppressive to the inhabitants, no good man could have, nor ought to make any reasonable resistance to this mode of levying the duties.
[Page 8] BESIDES a tax of this kind might be made exceedingly useful, in as much as on any emergency it could be even doubled without being greatly felt; whereas that upon houses would be oppressive if it greatly exceeded what is here proposed.
ON the contrary, as soon as the internal and federal State debt was paid, the tax on houses in the Country, Towns and Cities, ought to be reduced in proportion to the terms stated, and the wants of the State.
AND whereas the number of houses that might be erected yearly, from henceforward, would greatly encrease the revenue, the same should be regulated in such a manner, that the surplus be proportionably deducted from next year's tax on houses, or appropriated towards the establishment of a sinking fund, which might be made the basis of a solid State Bank and Loan Office, whose profits arising from monies lent on lands, and bills or notes discounted, would in a few years be altogether sufficient for the support of our civil government, and be the means of abrogating and doing away all taxes, as well as duties whatsoever.
| IF it should be objected to the proposed plan, that the calculations would be found fallacious, in as much as the number of inhabitants, said to be in the State, is exaggerated; let us deduct one fifth part, or ten thousand houses in the Country, which we shall suppose is over-rated; and these containing seventy thousand souls, according to our method of computation, would still leave two hundred and eighty thousand; a number that we think may [Page 9]be depended and safely calculated on: the proportion of tax that will fall short of the aforementioned on houses, will amount to | £. 130,000 |
| And for equivalent of duties on sixty thousand souls less, in the same ratio, | 60,000 |
| Charge of collecting eight hundred thousand pounds, including all salaries, wages, &c. to the persons employed for that purpose, two and a half percent, | 20,000 |
| £. 210,000 | |
| So that there would still result a clear revenue per annum, of | 790,000 |
| £. 1,000,000 |
BUT if one quarter part of the said seven hundred and ninety thousand pounds only should be required, Taxes collected for the amount in the mode and manner here before described, (provided the number of souls in the State was found to correspond even with this last supposition of two hundred and eighty thousand) would prove a mere bagatelle, and scarcely be felt by the community: to evince which, I subjoin a specimen of the mode to raise two hundred thousand pounds, or five hundred thousand Spanish dollars, allowing thirteen classes in the Country, and that each householder [Page 10]holder must contribute according to the number of the class wherein he is ranked, viz.
| £. s d | £. s d | ||
| No. I. | To pay for House tax per annum, | 0 5 0 | |
| For Equivalent of duties, supposing seven souls at three-pence each, | 0 1 9 | 0 6 9 | |
| II. | House tax per annum, | 0 15 0 | |
| Equivalent ditto, 7, at 1s each, | 0 7 0 | 1 2 | |
| III. | House tax per annum, | 1 5 0 | |
| Equivalent ditto, 7, at 1s 9d | 0 12 3 | 1 17 | |
| IV. | House tax per annum, | 1 15 0 | |
| Equivalent ditto, 7, at 2s 6d | 17 6 | 2 12 6 | |
| V. | House tax per annum, | 2 5 0 | |
| Equivalent ditto, 7, at 3s 4d | 1 3 4 | 3 8 4 | |
| VI. | House tax, per annum, | 2 15 0 | |
| Equivalent ditto, 7, at 4s 2d | 1 9 2 | 4 4 2 | |
| VII. | House tax per annum, | 3 5 0 | |
| Equivalent ditto, 7, at 5s | 1 15 0 | 5 0 0 | |
| VIII. | House tax per annum, | 3 15 0 | |
| Equivalent ditto, 7, at 5s 10d | 2 0 10 | 5 15 10 | |
| Carried over | £. 24 6 7 | ||
| Brought over | £. 24 6 — | ||
| No. IX. | House tax per annum, | 4 5 0 | |
| Equivalent ditto, 7, at 6s 8d | 2 6 8 | 6 11 8 | |
| X. | House tax per annum, | 4 15 0 | |
| Equivalent ditto, 7, at 7s 6d | 2 12 6 | 7 7 6 | |
| XI. | House tax per annum, | 5 5 0 | |
| Equivalent ditto, 7, at 8s 4d | 2 18 4 | 8 3 4 | |
| XII. | House tax per annum, | 5 15 0 | |
| Equivalent ditto, 7, at 9s 2d | 3 4 2 | 8 19 2 | |
| XIII. | House tax per annum, | 6 5 0 | |
| Equivalent ditto, 7, at 10s | 3 10 0 | 9 15 0 | |
| £. 65 3 3 |
| NOW thirteen houses, at the medium of three pounds five shillings each, will produce | £. 42 5 0 |
| AND ninety-one souls contained or supposed to live therein, at five shillings each, | 22 15 0 |
| £. 65 0 0 |
THEREFORE the foregoing is the most exact computation that could be made without introducing fractional parts of a penny, which has been purposely avoided: and it is to be observed also, that merely to form a calculation, each family has been reckoned [Page 12]to consist of seven souls, that is to say the master, mistress, and five children, or servants; but let the number be more or less, the householder has only to pay the equivalent tax in proportion to that of which his family consists.
NO one can doubt but that those who have hitherto had the direction of assessing for a County and Poor rate, are capable to make a proper distribution, or arrange the different classes here proposed: for it is only required to divide the number of householders by thirteen, and let all who formerly paid the least, amounting in number to one thirteenth part of the whole, come into No. I. or the lowest class; and those who contributed the most or greatest sum, into No. XIII. or the highest class: the medium and different gradations can therefore be easily ascertained, a due respect being had to the supposed worth of a man's real or personal estate in the country, and to the rent at which the house lets in the City and Towns.
OBSERVATIONS AND REFLECTIONS ON THE FOREGOING PLAN OF TAXATION, HUMBLY SUBMITTED TO THE GOOD PEOPLE OF THIS STATE OF NEW-YORK.
THE simplicity of the Tax is perhaps one of the principal points of view in which it can be recommended to public notice: it cannot be difficult for the Assessors appointed by government, [Page 14]or chose by the unanimous voice of the people, to arrange the inhabitants of each County, District, or Town, into the proposed or a greater number of classes, without giving the least disgust or showing any partiality in the manner; and when that is done, every member of the community will exactly know the quota assigned to him, and cheerfully submit to share in the public burthen: whilst it may prevent altercation in respect to one man's farm or estate being rated beyond what the due proportion will bear to another, the natural desire of being placed in a better light than perhaps a nice scrutiny into his situation would admit, will cause a laudable emulation of every householder to prefer a higher rather than a lower class, and make every one pleased with that which may be allotted him.
IT is well known that the most disagreeable part of all taxes, is the anxious uncertainty in which it leaves the minds of the taxed; therefore it must be a consolation to every citizen, to know and be able to calculate for himself, the sum he owes to his country, as soon as he is made acquainted with the general demand of the State, and that his share thereof will not depend on the erroneous judgment of an Assessor. The burthen of such a tax, if it may be called by that name, becomes much lighter in consequence of its simplicity, and every citizen of the State may be truly said to be his own Assessor; an advantage hitherto unknown to be enjoyed either in Europe or America.
THE unity and ease of collecting the tax is so obvious, that a preference must be given to it in opposition to the intricate and uncertain methods practised in a neighbouring State, as well as in Europe: It is required only to know the proposed medium in order [Page 15]to assign the lowest and highest tax, and proportion with mathematical exactness, the sum that each intermediate class must pay: and what enhances the value of the mode is, that the tax may be raised or diminished without trouble, without alteration in the fundamental principle, and without an addition to the number of officers or collectors appointed to receive the same.
THIS mode of taxation will unite the greatest and most valuable advantages; a precise and impartial equity in its distribution; an inconsiderable weight on each individual founded on that very precision; and it will convey to each master of a house the clear knowledge of what he has to pay: this most useful knowledge will consequently banish from his mind all dread, and in short become to the most uninformed citizen, a source of perpetual tranquility and peace of mind on that delicate head. If then this tax in all its variations, can be lessened or raised without its being scarcely felt, and with an expence so trifling and well ascertained; it must be confessed that those advantages will undoubtedly be derived from the unity in the plan, as well as from the extreme simplicity in the execution.
THE burthen chiefly, it may be said, will fall on the middle classes of the people; but who more able to bear it? Will they repine at the small sum allotted in the specimen to each man's share, when they perceive that the very poor indeed pay such a trifle? Surely no?
THE richest citizen of New-York, will only have to contribute sixteen pounds per annum, for his house and equivalent tax, whilst a person inhabiting a house of forty pounds yearly rent, pays two [Page 16]pounds eleven shillings and nine-pence, a gentleman of the largest landed estate in the country, nine pounds fifteen shillings, and the poorest householder no more than six shillings and nine-pence, as has been fully shewn; the principal person in Albany, and the various Towns throughout the State, six pounds, and the poorest mechanic in them, eleven shillings and nine-pence only.
WHO can therefore complain of the burthen or heavy load of taxes, when it is considered that the duties which might be laid on wines and other luxuries, would amount, on the consumption of the rich, to perhaps as much as he is taxed on the whole?
AS it has been before observed, that the chief burthen might be thought to fall on the middle classes of the people, it becomes necessary to remark, that the middle classes are by far the most numerous, the most-thriving, and those on whose labour principally depends the strength, the aggrandizement, and in short the population of the State: far happier in that as well as in many other instances are we than the Europeans, whose government hardly admits but of two extremes, and know not that respectable class we here denominate middling! That class of true American freeholders, equally removed from the danger of possessing riches and the meaness of poverty; who, independent and free, till the soil which belongs to them, embellish the earth, convert the hideous swamp into pleasing meadows; and in the purity of their manners as well as in their unbiassed, unprejudiced turn of mind, become and are in fact the nursery of our most valuable class of citizens industrious and neat at home, brave in the field, sagacious and [Page 17]proper to fill the different municipal stations of government which may be confered on them.
WE have only to add that the expence of collecting the proposed tax, is trifling in comparison to any other mode that can be devised: For let us suppose that the assessors would chearfully undertake to make the arrangement without fee or reward, will not any man be glad to collect, in his particular town or district, the whole tax for two and a half per cent. on the whole amount? Which of course would bring in so much clear money to government, free from every other charge.
SINCE therefore it is evident that a sufficiency for the exigencies of the State may in this manner be raised without taxing the land; will it not be of infinite service to the community in general to adopt the plan? Will it not be the means of drawing from all parts of Europe the most valuable subjects and citizens for an infant State, men of industry, acquainted with agriculture and the arts, and who, having groaned under oppression in their own country, would taste in a superior degree the sweets of liberty in this? And who, from a desire to obtain the luxuries as well as the necessaries of life, would be pressed on, by natural impulse, to the utmost exertions of skill in their various professions.
WILL not the lands within this State being excused from paying any tax, prove equal, if not superior to a bounty granted on the exportation of grain, which in another country has produced so wonderful an effect? And in a State occupied chiefly by farmers or improvers of the land, would put it on a much more excellent footing than its neighbours; and enable the merchant to export [Page 18]the produce on such reasonable terms as might greatly affect the imports both in price and quantity, to the no small emolument and advantage of every individual of the community.
LET us on the other hand consider the high and distinguished character which this State will thereby obtain among the nations in Europe, or wherever it shall be known throughout the world, that the arable, woodland and meadows, are exempt from taxes; that the manufactures and various productions of the universe may be admitted into it, without payment of any duties; and that the inhabitants liberally provide for their own internal demands without burthening the foreigner. What idea then must foreigners conceive of such a country, where besides all those advantages, they are protected both in their civil and religious rights? We are lost in contemplation, and ready, to declare, that no one who is unacquainted with freedom, and that liberality of mind which naturally accompanies it, can conceive or understand so excellent a constitution!
ANOTHER very important matter for the consideration of the good people of this State is, that were the mode of taxation, here proposed, to take place, the value of land throughout the whole, would certainly increase, and be enhanced by the free enjoyment of it, without burthen or load on the cultivator; whilst at the same time the tax itself would most certainly gradually diminish, according to the number of houses that might be erected and raised by the new comers, as well as the former possessors; whose progeny, being chiefly brought up in the same line and manner of life, would require of course [...]arate habitations as they grew up: far from repining at such [...] tax, the farmer will on the contrary [Page 19]rejoice in the consideration that if his dwelling pays so much a year towards the support of a just and mild government, that very house is his castle, the sacred asylum wherein resides his family, unexposed to the prying eye of an Exciseman, and freed from all obtrusion inconsistent with civil liberty; that the produce of his fields may circulate free from all imposts until shipped for foreign markets, and that his lands, vast and fertile as they may be, will owe nothing to any Potentate, King, or Lord on earth, save only gratitude to the Lord God of all lands.
IT is well known by those who have travelled in Europe, that it is not so much the real burthen of the tax which oppresses, as the mode of collecting it, the amazing expence attending the collection, and the particular objects on which taxes are laid: these are the great evils which kill young industry, bring on despair and discouragement, open wide the pernicious door of contraband, which leads to an infinity of false oaths and frauds an evil which finally ruins the morals of the people.
ON the contrary, this simple tax leaving every effort of the human genius uncontrouled and free, (an object of the utmost importance in this young country) damping no schemes whatever, either rural or commercial, but offering to man's industry an unrestrained career, could be truly said to operate as no taxes ever operated before, and that it would abundantly enable government to act with becoming dignity, without exhausting any of the vital juices of society, impeding any branch of commerce, or discouraging any advantageous scheme whatever.
IN the City, the inhabitants whether Merchants or Mechanics [...], no matter what goods I import, what channel of trade [Page 20]I pursue; no matter what is my craft, or the industry of my hands, I may trade on and work, find out new openings in commerce, invent new powers in mechanism; Government like an indulgent parent, will not lay a burthen on this or that article, this or that branch of industry; it will not establish monopolies which enrich some, whilst they condemn others to dearth and penury: my hands, my genius, my faculties, my experience, all, all is free.
WHILST ploughing his furrow, the honest husbandman will say, praise and long duration to that government which marks my dwelling place only, for a just, equal, and unavoidable tax, and leaves at the same time my lands, my meadows, my cattle, my crops, unincumbered and free: ought not I to purchase by some consideration the undisturbed sweet repose which this very house affords me and mine! It has been the place of my nativity, the substantial and neat shelter which my father erected against the severities of winter, and the scorching heats of the summer; it is the roof under which dwells all that is dear to me; it is that which gives me a rank amongst men, and makes me to be called an inhabitant of such a district: blessed be that mode of taxation, which insures us a new branch of civil happiness! Since it produces the necessary supplies; since it is either lessened or raised by the single stroke of a pen; since every citizen pays but in a due proportion to what he possesses; since no part of it goes to feed rich and unfeeling Financiers, and a numerous train of Officers, who in so many parts of the world consume a quarter part of the taxes raised, and fatten with impunity on the very blood of the people.
[Page 21] IF then the Merchant, the Mechanic, the Artificer, the Farmer find in this mode of taxation nothing which can require any extraordinary exertions of industry to pay the sum demanded, there will be no dread or apprehension of the hour of assessment, nor in that of the collection.
AND since the different classes in which the citizens of this State may be divided, can equally partake of the obvious advantages here proposed, resulting from this new mode of taxation, as well from the simplicity of its execution, as the precision of its distribution, let not the novelty of the scheme create prejudice or prevent its being adopted; for although such be the unhappy effects of the first appearance of things altogether new and striking, yet the many and great good consequences arising, it is to be hoped, will banish from the mind every pre-conceived opinion on the subject, and procure the attentively reading as well as maturely weighing so important a matter before the good people of this State gives it a negative: let not the plan be disregarded and looked on as chimerical, or romantic, before their minds have given it that due share of attention and serious consideration, which so interesting a subject requires: let it be said for the first time, and perhaps the only instance in the world, that in this State of New-York, we have LANDS WITHOUT TAXES, AND CITIES WITHOUT CUSTOM-HOUSES.
WHAT a train of complicated and perhaps envious thoughts will not this short phrase raise, not only in the minds of our neighbours but even in that of the Europeans who are attentively attending to our new polity: this is the important moment, when our Legislators, the new Fathers of this new State, must in all the extent [Page 22]of their understandings, in the multiplicity of ideas already known, search for the simplest and least burthensome manner of taxing [...]s.
LET then the City Merchant, the Mechanic, and the honest Husbandman, seriously revolve in his mind the different observations herein contained: if the pomp of eloquence and the beauties of stile be banished from this small pamphlet, it is because the few simple truths on which the scheme is built, and here proposed for the inspection of the Public, should, in being less adorned, become more striking and convincing.
SHOULD this plan succeed or give birth to any other as simple and as easy to be executed for the public good, the Writer will have reason to bless the hour which brought first the idea to his mind, and gave him an opportunity to shew his good will towards contributing his poor mite to the general welfare and happiness of a State, wherein he has the honour to be
ERRATUM—In page 6, last Line, in place of £. 520—read £. 520,000.