Personal And Wages Taxes
1. OLDER than the taxes that we have" been engaged in
considering, but now of little important, are the capitation
or poll taxes, so familiar to students of mediaeval finance.*
Their origin is evidently found in the idea that persons, as
such, should contribute to the wants of the public power.
Capitation and property taxes were the two great cate-
gories of receipt in early times. When the greater part of
a community possessed little accumulated wealth, the
method of taxing each adult for a fixed sum was natural.
What is very suitable in a rude state of society is alto-
gether unfitted for a progressive and civilized one. No
modern state could employ a capitation tax as a sub-
stantial source of revenue. Its inequality and directness
combine to make it unpopular. The remains of this
form of personal taxation are, however, very general,
though their interest is rather historical or political than
The equal taxation of persons by poll taxes, or capitations,
generally develops, either by some form of graduation into
an income tax 1 , or, as happened widely in the I7th century,
is replaced by an excise on the necessaries of life. The
sense of proportion accounts for the former, as the great
dislike to the capitation tax does for the latter. But several
countries, notwithstanding, retain a small charge on the
person of each contributor.
2. English history supplies us with some illustrations of
the poll tax. The first was in 1377, followed immediately
by those of 1379 and 1380 (the latter the proximate cause
of the Peasant Revolt). The two latter were graduated
according to rank. At intervals the graduated poll tax
reappears, as in 1453, J 5 J 3 anc ^ 1641- Its last employment
was under William III in the French war, and it ceased
completely after 1698 1 .
The French capitation was first levied in 1695, and
continued with changes up to the Revolution. It was
graduated ; at first twenty-two classes were formed, but
this part of the system was altered in 1701. The Con-
stituent Assembly created the personal tax (1791), which
consisted of the value of three days' labour, and added
it to the mobiiier. The price of the day's labour is deter-
mined for each commune by the Council of the depart-
ment, within the limits of $d. and is. ^d. No addition
can be made for local charges, and where an octroi is
levied, the personal tax may be paid out of it. So far
as can be ascertained, the total yield is between 600,000
and 700,000 2 .
The Italian states possessed complicated capitation taxes
which have not survived the establishment of the present
kingdom. So did many of the German states 3 ; but, at
present, the class tax of Prussia is the most noticeable.
The poll tax of 1811 was replaced by the class tax of
1820, by which the mass of the population was grouped
in four classes, paying various rates, from \ i6s. to yd.
The income tax and the class tax were separated in 1851,
and the latter, confined to incomes under i5 3 was di-
vided into 12 classes, which, under the law of 1875, paid
from 3^. to 3 us., incomes under 21 being exempt 4 .
1 Dowell, iii. 3-7. a Vignes, i. 40-1.
3 De Parieu, i. 139-151.
* By the law of 1891 the class tax is absorbed in the income tax and incomes
The Saxon income tax in its lower part is practically the
same as a capitation tax. The poll tax also survives
in Switzerland, where it is chiefly employed for local
purposes, and not in all the cantons.
Russia, which had long preserved the capitation, aban-
doned it in 1887. The nobility had been always exempt,
and, since 1866, the commercial classes. While it was in
force the rate varied from district to district, and its amount
was about ^"9,000,000 (taking the rouble at its nominal
In the United States poll taxes have been used from the
colonial period. At present, more than half of the States
have them in force, mostly for the state or commonwealth
revenue, but, in some cases, for the counties, and in others
for education, or road making. In four commonwealths
the payment of the poll tax is a condition of the suffrage 1 ,
Massachusetts being the best known instance.
In addition to the taxes already noticed, we should
mention the services demanded by the state from its
citizens. Military service is the most prominent, and it
is a large part of the real, as distinguished from the
nominal, cost of continental armies. The real nature of
this service, as a tax, is best shown by the compensatory
tax ( Wehrsteuer), imposed on those who do not serve, and
which has given rise to so much controversy in Germany.
The method of Prestations in France for the repair of
roads is another example, and there too the alternative
of working or paying is open. The mediaeval system
of Finance availed itself more extensively of this direct
method of procuring resources; the surviving instances,
in modern times, are with the exception of military
duty more curious than important.
3. The poll or capitation tax is far from being a pure
under 60 are exempted. The account in the text is preserved as illustrating
tax on wages : the taxation of professions through Sche-
dule D of the English Income Tax, and by the fourth
division (Table D) of the Patente^ is a nearer approach
to that point. Attempts to reach the great body of wage-
earners are generally made by means of indirect taxation.
The enforcement of a capitation tax is certain to meet
with, at least, passive opposition, and in any case its
productiveness cannot be great. The method of using it
as a necessary condition to acquiring full political rights
may be admissible if the receipts are given to local bodies,
but this regulation is political rather than financial.
The general result is that this form of taxation is decay-
ing. Its persistence is due to the financial conservatism
that is so strong in most countries. It is altogether out of
place in the general financial system, and though it may for
a long time survive in some Swiss cantons or American
states, its importance will, we believe, steadily diminish.
The incidence of personal taxes, especially in the form
of capitations on day labourers, has been regarded by many
writers as wholly on the employers, or through them
ultimately on the consumers of the products they turn
out, but this conclusion is not by any means certain. It
is far more probable that a small tax on the poorer classes
will lower, or prevent a rise in, their mode of living. Its
action on population is far too indefinite to be used for
laying down an absolute rule. Much will depend on the ex-
act form of the tax, whether uniform or graduated, confined
to the head of the family or extended to its other adult
members. No proposition in Finance has been more dan-
gerous in its application than that which declares that the
labourer cannot permanently suffer from taxation.