Life of Being a Crown Prince in France-Chapter 643 - 552: I Also Have a Bit of Understanding in Economics
Chapter 643: Chapter 552: I Also Have a Bit of Understanding in Economics
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Shabban frowned slightly upon hearing this and asked, “Is the batch of goods we sold to Le Havre loaded yet?”
“Almost finished,” the accountant replied. “Pierre would’ve finished it yesterday had he not been injured.”
“Are the accounts all settled?”
...
“Don’t worry, Manager, everything is definitely in order.”
“That’s good,” Shabban nodded, and then instructed, “Later, you take the Tax Officer to check the accounts first, try to delay as much as possible. Michel and I will go help with loading, and then slip away through the back door.”
“There will likely be Tax Officers blocking the back door as well.”
“No matter, I will send an empty cart first to draw them away.”
Saying this, Shabban gestured to the workers on the cart, “Hurry, come with me to load the goods!”
Before long, the coachman who had just returned from Evreux drove the carriage out of the back gate, and the Tax Officers waiting there blew their whistles and chased after it.
Following closely, another cart fully loaded with mirrors sneakily appeared and, confirming that no one was around, swiftly turned into a nearby alley.
An hour later, a few Tax Officers left the “Ruby” mirror workshop empty-handed.
France currently implemented a “commodity tax” system, meaning you have to pay a tax whenever you sell a batch of goods. Of course, for commodities like tobacco, alcohol, and tea, you might have to pay twice.
Therefore, Tax Officers must monitor factories and estates closely at all times, and as soon as they discover goods being shipped out, they have to levy the tax immediately.
If the Tax Officers don’t notice the goods being transported away, it becomes very difficult to collect the tax later—the factories almost always keep cooked books, leaving no trace of the transported goods.
As a result, a cat-and-mouse game unfolded between the producers and the Tax Officers. In the past, if the Tax Farmers suspected that the workshops were secretly transporting goods, they would even torture the workers to force out the truth.
At twilight, Shabban’s cart had already left the Rouen City area.
He hummed a little tune with a smile.
Successfully evading the Tax Officer today saved him 8 francs in taxes.
Ah, life was truly getting better! He exclaimed in his heart.
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Tuileries Palace, second floor.
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The Head of the General Tax Directorate, Fulco, glanced at Robespierre beside him and exhaled, saying, “Your Grace, I suggest equipping Tax Officers with whips and granting them the authority to shoot in the face of violent tax resistance. Otherwise, the tax situation for next month will likely be… ah, less than ideal.”
Joseph, looking at the tax report for January, also furrowed his brow.
In the Tax Bureau’s first month of collecting taxes, the nationwide total was only 34 million francs. Not only did it fail to meet the expected target of 41 million francs, but it was even less than the lump sum paid by the Tax Farmers Association.
“So, do you believe it is the extensive tax evasion that has prevented us from meeting the tax target?”
“I’m afraid that’s the case, Your Grace.”
“If we allow the Tax Officers to use more forceful measures, could this situation be improved?”
“I believe it might…”
Before Fulco could finish, Robespierre interrupted him, “Your Grace, you are creating a brand-new tax system and have thus earned the respect and praise of the masses. If we reused whips to collect taxes, what difference would there be between us and the Tax Farmers?”
Fulco, disgruntled, gave him a sidelong glance: “The difference is that the state’s finances will not collapse because of the shamelessness and cunning of the lowly people!
“Inspector, your kind heart won’t collect taxes.”
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In early modern Western Europe, the tax systems of the countries, whether in terms of tax theory, tax structure, use, or principles, all bore distinct characteristics of the era. In terms of tax theory, England’s tax system followed the medieval “common interest,” “common need,” and “common consent” as the basic principles for taxation, whereas France’s tax theory diverged from England’s, largely because the Estates-General in France relinquished their tax powers, which were then absolutely controlled by the King of France. The divergent developmental paths of tax theories in England and France resulted in differences in tax structure, usage, and principles, and it was these differences that, despite their common origins, led them down separate paths [1] and are an important reason why England’s tax system was the first to achieve modernization. In addition to these differences, in the pre-modern period, most Western European countries adhered to mercantilist and classical political economic thoughts on economy and taxation. Mercantilism advocated that the state should interfere with foreign trade and implement tariff protection. In view of this, Western European countries put tariff protection policies into practice, with the passing of the British “Corn Laws” and “Navigation Acts” as clear examples. While the “Corn Laws” and the “Navigation Acts” protected domestic grain producers and national merchants to some extent, they did not meet the new demands of the bourgeoisie for a free market following the Industrial Revolution. Hence, the British Government later abolished these laws, marking the end of mercantilism and the triumph of liberalism. Consequently, classical political economy’s thoughts on tax began to dominate. Key figures representing the tax thoughts of classical political economy included England’s William Petty, Adam Smith, and France’s Jean-Baptiste Say, who all advocated for fairness, certainty, simplicity, and economy in taxation. Additionally, to meet the demands of the Industrial Revolution for a free market, they criticized mercantilism and advocated for free trade and tariff reform. Influenced by classical political economy’s thoughts on taxation between the 1840s to 1870s, the British Government carried out a series of tariff reforms, reducing or abolishing various goods’ tariffs and excise taxes. However, with the completion of the Industrial Revolution in Western Europe and the emergence of various social issues, classical political economy’s tax thoughts no longer met the new requirements, thereby pushing the modernization of tax system reforms in Western European countries at the end of the 19th century and beginning of the 20th century.
In terms of tax structure, in the early modern period, Western European countries relied on indirect taxes such as tariffs, excise taxes, and salt taxes as the main source of revenue; direct taxes like income tax, land tax, and property tax were not highly emphasized. France’s tax structure differed from that of England, as France’s tax structure was once predominantly based on direct taxes. Over time, the importance of direct taxes gradually diminished while that of indirect taxes rose. Statistics show that between 1726 and 1788, the proportion of direct taxes in France’s national budget decreased from 44% to 35%, whereas the proportion of indirect taxes rose from 50% to 57%.[2] This reliance on tariffs and excise taxes as the main sources of indirect tax led to numerous and burdensome tax obligations in Western Europe. Hence, classical political economy advocated for tariff and excise tax reforms to lower tax rates, simplify the tax system, and promote free trade. As a result, the proportion of indirect taxes declined while the share of direct taxes gradually increased.
