Sunday, October 15, 2006

BALANCING TAXATION AND REPRESENTATION

This from the dangerous radicals at Delancey Place, with our thanks:

In today's encore excerpt--taxation. In 1789, the French had a far lighter tax burden than the English, but they were the ones who revolted because, as Baron Montesquieu brilliantly theorized, the ability to tax is constrained when a government is not representative.

The same was true in 1776, where American colonials had a far lighter tax burden than citizens of England, but had no representation. Those who feared world takeover by communism or totalitarian states in the twentieth century should have considered this--a non-representative government simply cannot generate sustained wealth:"Even before (1781), well-informed observers understood the conundrum of ancien regime finance.

Adam Smith was among them [writing that] '...the people of France, however, it is generally acknowledged, are much more oppressed by taxes than the people of Great Britain.'"This was an astute observation. Taxes may have been lower in France, but, perversely they aroused more opposition.

The roles of France and England had been reversed. In the seventeenth century, it was the Stuarts who had struggled in vain to conjure a modest income out of their recalcitrant subjects, and whose regime had been brought down by financial starvation. In the following century, the Bourbons suffered the same fate...The graph shows just how neatly the index of taxpayer pliability had been turned upside down: "Relative Taxation in France and England, Grams of Silver per capita:"1640: France 30 grams; England 14 grams"1789: France 75 grams; England 188 grams"Montesquieu's Limits of Absolutism: General rule: one can raise higher taxes in proportion to the liberty of the subjects: and one is forced to moderate them to the degree that servitude increases. This has always been, and will always remain so." James MacDonald, A Free Nation Deep in Debt, Farrar, Straus, 2003, pp. 253-5.

Holy Cheetos! I've never really thought about it that way.

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