I do not think so. On the contrary, I think that the time has come to subject indirect taxation, still in its infancy, to a revolution similar to that which the land register and equalization have brought to taxes on land.
I in no sense aspire here to the formulation of an entire system of indirect taxes, since this would require knowledge and experience, which I am far from possessing. However, I hope that you will not find it out of place for me to lay down a few principles if only to give you a glimpse of the huge field awaiting your consideration.
I have said that indirect taxation was still in its infancy. Perhaps it will be felt that it is somewhat presumptuous to judge a work of Napoléon in this way. However, it must be realized that a tax system is always of necessity imperfect at its outset, since it is established under the influence of some urgent need. Is it to be imagined that if a need for funds gave rise to a land tax in a country in which this type of public revenue was unknown, it would be possible at the first try to achieve the perfection that has been achieved in France only at the cost of fifty years of work and a hundred million of expenditure? How therefore could indirect taxation, so complicated in nature, have achieved from its inception the final degree of perfection?
A rational law for a good system of consumer taxes would be this: make the tax as comprehensive as possible with regard to the number of objects it falls on and as moderate as possible with regard to its level.
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The closer indirect taxation gets in practical terms to these two rules, the more it will fulfill the conditions that ought to be found in an institution of this kind:
1 Make each person contribute in accordance with his wealth;
2 Avoid damaging production;
3 Hinder the movements of industry and commerce as little as possible;
4 Curtail profits and consequently the incidence of fraud;
5 Avoid imposing restrictions that make arbitrary exceptions of any specific class of citizen;
6 Follow unswervingly all the fluctuations of public wealth;
7 Adapt with the greatest flexibility to all the distinctions that a sensible policy can establish between products, depending on whether they are essentials or convenience products and luxuries;
8 Get involved, readily, in cultural mores by emphasizing with regard to public opinion the respect with which it does not fail to enshrine everything that is undeniably useful, moderate, and just.
It appears in this case that our financial system has been based on the diametrically opposing principle, namely the limitation of the number of objects taxed and the maintenance of the tax on a high level.
A choice has been made, from a thousand products, of two or three—salt, wine and spirits, and tobacco—and these have been heavily burdened.
Once again, it could scarcely have been otherwise. The head of state, desperate for money, has not been concerned with perfection or justice. He has been concerned with making funds flow into the treasury abundantly and easily, and since he had a force capable of overcoming all resistance, he had only to pick a product that was eminently taxable and inflict repeated blows on it.10
With regard to us, the public, wines and spirits must have been the first to come to his mind. They are universally used and promise abundant resources. They are difficult to transport and could hardly escape the attention of the tax authorities. They are produced by a scattered population, which is apathetic and inexperienced in public conflict, and their collection did
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not seem likely to subject the authorities to insurmountable resistance. The Decree dated 5th Ventôse11 in the Year XII was passed accordingly.
However, two opposing principles can produce only opposing consequences; it could not therefore be denied that indirect taxes such as those instituted by the Decree of Year XII12 are a perpetual violation of the rights and personal interests of citizens.
Indirect taxation is unjust simply by virtue of the exceptions it makes.
It offends equity because it raises as much from the wages of a workman as from the income of a millionaire.
Indirect taxation is bad economics because by raising too much revenue it limits consumption, affects production, and tends to restrict the very source that feeds it.
It is not good policy, since it encourages fraud and is incapable of either preventing or repressing fraud without encircling the activities of production with formalities and obstacles laid down in the most barbarous code that has ever dishonored the legislature of a great people.
If, therefore, men of goodwill and intelligence, the councils of the départements and districts, the Chambers of Commerce, the societies for agriculture, the committees of industrialists and wine producers, these lobby groups that fashion public opinion and draw up material for legislation, wish to give their work in this context a useful and practical direction, if they wish to achieve results that reconcile the collective requirements of
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our civilization and the interests of each industry and class of citizen, they should not have recourse to a puerile list of unattainable requirements and still less should they give way to sterile discouragement. They should work with perseverance toward the fertile principle we have just set out, with all its just and practical consequences.
The second cause of the decline in wine producing is the regime of city tolls. In the same way that indirect taxes hinder the general circulation of wine, city tolls drive the wine trade away from population centers, that is to say, its major markets of consumption. This is the second barrier placed by the spirit of taxation between the seller and the purchaser.
Except for the fact that city tolls are applied to specific locations, they are a branch of indirect taxation, and for this reason their proper basis in terms both of yield and of justice is the one we have just assigned to this kind of tax: generalization with regard to its area of operation, limitation with regard to the intensity of its application. In other words, such tolls must cover everything but must subject each product to a duty too small to be noticed. City tolls are all the more properly held to this principle of good administration and equity in that unlike combined duties they do not even have the trite excuse of being hard to collect. However, we see that the principle of taxing only certain key products has won in this instance and that highly populated towns base half, three quarters, and even all of their revenues on wines and spirits alone.
If the tariffs of city tolls were left to the sovereign decision of municipal councils, wine-producing départements would be able to retaliate against manufacturing départements. All the working groups of the population would then be seen to engage in an internal customs conflict, a huge turmoil, but one from which the common sense of the general public would probably sooner or later, by way of negotiation, cause the application of the principle we have invoked. It is unquestionably to avoid these domestic disorders that the central power has been given the authority to regulate the tariffs of city tolls, an authority that is an essential part of the franchises of towns and of which they have been deprived for the benefit of the state only on condition that the state is responsible for keeping an even balance between all the various interests.
What use has the state made of this excessive prerogative? If there is one product that the state ought to have protected and removed from
