Various taxes levied in France on the eve of the French Revolution.
Various taxes levied in France on the eve of the French Revolution.
Adam Smith referred to the pre-revolutionary French economic system as a misguided economic system or "Museum of economic errors." At the root of this erroneous economy were the various taxes levied in France that were flawed and unreasonable. There were basically two types of taxes in France; Namely - direct and indirect taxes. The first two estates in France, namely the clergy and the aristocracy, were almost free from coercion. All taxes were borne by the Third Estate.
Three types of direct tax: -
There were three types of direct taxes in the French economy; E.g. -
(i) Taille or land revenue.
(ii) Capitation or production based tax.
(iii) Vingtiemes or income tax on property.
The first two estates in France were almost exempt from these three types of direct taxes, mainly for a few reasons. For example - (a) the clergy paid voluntary taxes in accordance with the Treaty of Poice of 1561; They were not obliged to pay any tax and the state could not tax them equally. (b) Privilege, concession and exemption. According to this opportunity, the clergies and the aristocracy of France were exempted from paying taxes. As a result, the third estate had to bear all the taxes of France. About 96% of France's total income was taxed by people from third communities.
Indirect tax: -
In addition to the above three direct taxes, various other types of indirect taxes were also prevalent. Such as -
(i) Gabella or salt tax.
(ii) Tithe or taxes payable to Church.
(iii) Karvi or compulsory forced labor.
(iv) Aides tax on alcohol, tobacco etc.
(v) Taxes on transfer of property .
(vi) Banalites or Mandatory tax payable to feudal lords.
According to an estimate by French Finance Minister Turgo, 55 percent of the income of French peasants and third-estate people would be spent on paying direct taxes. There were also indirect taxes. After paying all kinds of taxes, the farmers had only one-fifth of their total income. There was also a lot of corruption in tax collection. Although the elite owned about 50 percent of the total agricultural land, they did not have to pay any such tax. The government and the feudal lords could also impose arbitrary tariffs on goods. As a result, prices of daily necessities continued to rise. So the historian Goodwin in his book French Revolution said - The essence of the financial problem on the eve of the revolution was the impossibility of reducing these heavy items of expenditure.
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