Cyclopædia of Political Science, Political Economy, and the Political History of the United States

Edited by: Lalor, John J.
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New York: Maynard, Merrill, and Co.
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Includes articles by Frédéric Bastiat, Gustave de Molinari, Henry George, J. B. Say, Francis A. Walker, and more.
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COST OF COLLECTION OF TAXES. By this expression is meant the expenses necessitated by the collection of the taxes, the salaries of agents and the support of the branch of the administration intrusted with the duty of collecting them. It represents the difference between the sum paid into the treasury and that paid by the taxpayers. The lessening of this difference must be the result of a good system of collection. It depends, therefore, upon a good mode of assessment of the taxes; on a systematic, wise and perfect administration. It is, in many respects, the expression of the order and justice with which the finances are managed.


—We quote the following from J. B. Say (Cours, part viii., chap. 6): "I read in a memoir of Hennet, first commissioner of the finances, that, in 1813, France, which then consisted of 130 departments, in order to obtain 170,000,000 francs from the lands and domains subject to taxation, had to assess the tax payers 240,000,000, that is, 70,000,000, or 41 per cent. for the cost of collection." "In England, before Sully's time, the cost of collection amounted to 500 per cent.; to-day [Say wrote in 1829] it is hardly 5 per cent. of the entire receipts."


—According to this, the cost of collecting taxes has been wonderfully lessened in France since 1813; for, in 1854, it was hardly more than 5 per cent. in 86 departments. The figures given for the epoch previous to Sully, seem very much exaggerated, if we compare them with Froumenteau's curious book (le Secret de finances, 1580, book i., p. 142), which gives the total receipts for 31 years, ending Dec. 31, 1580, at 1,453,000,000 livres, of which only 927,000,000 were paid into the royal treasury: the difference is 526,000,000, or 57 per cent., the cost of collection.


—Necker, in his Administration des finances (1785, chap. iii.), estimated the total cost of the collection on receipts to the amount of 557,500,000 francs, or 585,000,000, including the "corvees," and the costs of distraint and seizure, constituting the entire tax of France, at only 58,000,000, or 11 3/5 per cent. A calculation of Eugene Daire, based on the results of the budget of 1842 (Annuaire de l'economic politique de 1844, p. 84), puts the cost of collection at 132,000,000 upon a gross receipt of 1,130,000,000, or 13 1/5 per cent. of the sum actually paid into the treasury for public purposes. According to this the administration of the finances of France in 1854 did not differ from the administration before the revolution, if Neeker's statement be correct.


—We would remark that, in general, the cost of collection of the tax imposed upon the manufacture and sale of a product is greater than the cost of collection of the taxes called indirect, which are levied upon objects of general consumption; and the cost of collecting these latter is greater than that of collecting direct taxes upon land, personal property, doors and windows, income, etc.


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