42 Essays in taxation

common on the continent than in England, it is obvious that under the prevailing conditions their value could be found only as an annuity. Accordingly the annuity or yearly rent-charge was always included in the redditus or returns of real estate.

Personal property on the other hand had a capital value. In fact, most of the elements of personalty yielded no money produce at all, but only what economists call a benefit or psy­chic income. Personalty, therefore, was taxed according to property value; realty, except in the towns, according to rental value. Thus the mediaeval general property tax was really a combination of property and product tax, product being utilized when the capital value was difficult or impossible to ascertain. In England this system of distinguishing between rents and movables continued through the middle ages; on the continent and especially where feudal conditions gave way before the democratic movement, the more unified property conception gained the upper hand.

The other problem is that of the difference ш rates. In England the proportion came to be, as stated, a tenth for per­sonalty and a fifteenth for realty. On the continent the dis­parity was often considerably greater, the rate on personalty being frequently two or even three times as high as that on realty. Moreover, when we remember that in the case of per­sonalty the tax was assessed on capital value, whereas in the case of realty it was assessed only on the produce of the prop­erty, the contrast becomes astonishing.

In England there is not much doubt that the difference in the rate was, in part at all events, due tothe fact that the peers were politically more powerful than the commons. But in many parts of the continent we find the same practice even where the aristocrats were not in the saddle. The explanation must therefore be of a more general nature.

Some authors seek the explanation in the alleged fact that personalty, especially that part of it invested in trade and com­merce, was more lucrative than real estate, and could therefore more easily endure a higher rate.¹ Apart from the fact, how­ever, that trade capital constituted only a small part of the

¹ This is the view of Hartung, "Die Augsburger Vermogensteuer im XV. Jahrhundert" and "Die Belastung des Augsburgischen Grosskapitals," in Schraoller's Jahrbuch, etc., vol. 19 (1895); and of Kolle, Die Vermogen­steuer der Reichstadt Uhn vom Jahre 1709. Stuttgart, 1898.

THE GENERAL PROPERTY TAX 43

taxable personalty, the alleged fact is really without founda­tion. Other writers advance a variation of this theory by con­tending that real estate, especially in the towns, was of very slight productivity. The towns, they tell us, were full of empty dwellings, the population was small, and land was not the subject of speculation as in modern times. The towns, we are told, even helped to rebuild houses that had been destroyed by fire.¹ This view, however, represents an unwarrantable general­ization from a single town or a single period. A more defen­sible theory is that land was the basis of the entire economic life in the middle ages, and since most people even in the towns made their chief living out of the land, it was only natural that the principal means of subsistence should be treated somewhat more tenderly and that the surplus over what the individual needed for his living should be taxed at a higher rate.² The best explanation, however, is to be found in the fact that it was administratively more difficult to reach personal property, both because some of it was more or less hidden from the scru­tiny of the assessor, and because intentional concealment and fraud were far easier.³ As a matter of fact the assessment of chattels was not strictly enforced. This is apparent in England, at all events, from the dissatisfaction shown with the tax of 1275, when the people were assessed ad unguem, i.e. up to the full value of their movables.⁴ In the succeeding grants the old easy practice was resumed. As the tax on lands, however, could be levied on actual rents, it was not apt to be so leniently assessed. Thus a substantial equality was probably reached. Just as in England the tallages merged into the fifteenths and tenths, so in France the feudal charges on the land de­veloped into the general property tax, which however still retained the old name taille. The ordinances of 1254-56 at­tempted to regulate the assessment, and provided that im-

¹ F. R. Bothe, Die-'Entunckelung der direkten Besteuerung in der Reich- stadl Frankfurt bis zur Revolution, 1612-1614. Leipzig, 1906, p. 67.

² This theory is vigorously espoused by Heidenhain, op. cit., esp. p. 53.

³ This explanation was first advanced by the present writer in 1892, in an article in the Political Science Quarterly, and is found in the first edition of this work. It was independently advanced by Hartung in 1895 in the. essays mentioned above, and is accepted in substance by Hartwig, Der Lubecker Sctwss bis zur Reformationszeit, 1903, p. 47, and by Moll, Zur Geschichle der Vermogensteuern, 1911, p. 108.

⁴ Dowell, History of Taxation and Taxes in England (2d edition), i., p. 68.