Popular Science Monthly/Volume 49/June 1896/Principles of Taxation: In Literature and History VIII
|PRINCIPLES OF TAXATION.|
By DAVID A. WELLS, LL.D., D.C.L.,
CORRESPONDANT DE L'INSTITUT DE FRANCE, ETC.
II. — THE PLACE OF TAXATION IN LITERATURE AND HISTORY.
TAXATION in Egypt. — Herodotus, the Father of History, in writing more than two thousand years ago about Egypt, characterized it as a land of wonders, "containing more marvelous things than any other country," and in this opinion the judgment of succeeding ages, finding an all-sufficient warrant in primeval, stupendous, and mysterious monuments, has been compelled, as it were, fully to acquiesce. At this latter day, however, there has been added to Egyptian history what may be rightfully termed another wonder, namely, the most interesting and instructive experience in taxation in the world's history. Interesting and instructive because it affords the most striking and unprecedented illustrations of the results contingent on an arbitrary and unintelligent treatment of a heavy annual requirement of revenue for the support of a state, as contrasted with the results which have been the sequence of a wise and practical policy for a like purpose in the same country and under similar conditions.
Previous to the military occupation of Egypt by the British forces in 1882, consequent upon the suppression of the rebellion under the lead of Arabi Pasha, the condition of the country was wretched almost beyond conception. Its revenue system, in accordance with Asiatic ideas, comprehended nearly every form of iniquitous extortion. The principal source of revenue was essentially in the nature of a land tax; and for the dusky fellah, who represents the bulk of the Egyptian population, and who with a 146 POPULAR SCIENCE MONTHLY.
grimy white shirt girded about his loins, plows, sows, and reaps to-day as his forefathers have done before him for thousands and thousands of years, this tax meant that his houses, his cattle, and his lands " were but so much food placed before the lips of our lord (the Khedive) that he might eat thereof and have his fill."
" The seed was often barely sown for the coming crop before the tax-gatherer appeared with the usurer as his familiar spirit at his heels, claiming not only heavy tithes of the treasury, but the many tithes of those tithes which never reached the treasury, way- laid on the road along the steep ascending gradients of a predatory hierarchy. For what purposes or to what amount he could be mulcted the fellah had no means of knowing. The only record he kept was the number of strokes from the koorbash which had wrung from him his last piastre. The only certainty he acquired by long and bitter experience was that, let his harvest be good or bad, only so much would be left to him as would barely suf- fice to keep body and soul together. Every year brought fresh imposts, and every new tax became in the hands of a corrupt ad- ministration a fresh pretext for unlawful exactions. To satisfy them the land was made to yield more frequent and more valuable but also more exhausting crops, until the soil itself caught the contagion of universal impoverishment. Still the arrears of taxa- tion grew, and with them arrears of private indebtedness," until at last whole villages not infrequently petitioned the pasha " to accept the fee simple of their lands on condition merely that they should be allowed to rent them from him at an annual rental greater than the land tax itself, but still vastly less than the total amount of illegitimate imposts grafted on to the land tax."
Extortion for the purpose of obtaining revenue for the state, and plunder for the officials intrusted with its collection, was not the only form of oppression to which the miserable Egyptian peas- antry were subjected. By an ancient Asiatic institution called the corvee, the fellah was liable at any moment to be seized and dragged perhaps off to some distant part of the country to work under constant dread of the taskmaster's whip at any task sug- gested by the caprice of the Khedive or some powerful pasha ; and it was under this system of compulsory, unpaid, severe, unfed labor, and with great attendant sacrifice of the lives of his sub- jects, that the then Khedive, Ismail Pasha, mainly built the Suez Canal. In addition there was a system of " military conscription invested with the terrors of the press-gang ; there was the water supply for irrigation, generally inadequate and often dependent upon the caprice of some local magistrate or corrupt ofiicial ; there was the greed of unjust judges ; there was the whole hungry bureaucracy, feeding upon those beneath it in order that it might in turn feed those above it."
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Such, then, was the life that the fellah " lived in the days of the oppression " ; not in the dim twilight of the past, but less than twenty years ago ; not in remotely hidden corners of Egypt, but throughout its entire length and breadth.
In 1879 the exactions in Egypt, nominally for revenue, had be- come so oppressive, that the population refused to pay them, and, rising in revolt, drove Ismail Pasha from power and installed his son, Mohammed Tewfik, in his place. The new pasha found the finances of the country in such confusion, that he was obliged to invoke the aid of European Governments in order to obtain the means necessary to pay the interest on the public debt ; and in this way the British and French Governments, as representing a large majority of the creditors, or holders of the debt, were prac- tically given control of all the Egyptian sources of revenue. This condition of affairs was, however, in turn so repugnant to the peo- ple that in the spring of 1882 a revolt broke out, headed by Arabi Pasha, the then Minister of "War, which, with a popular cry of " Egypt for Egyptians! " seemed for a time likely to be success- ful. But with the utter defeat of Arabi at the battle of Tel-el- Kebir, in September, 1882, the rebellion collapsed ; Tewfik Pasha was restored to power, while the British forces, for the pur- pose mainly of maintaining the situation and insuring peace, practically retained possession of the country. It was under such circumstances that a reconstruction of the antiquated, arbitrary, and unequal Egyptian system of collecting revenue was entered upon as an immediate and imperative necessity for the establishment of a new and better national fiscal policy, and the attainment thereby of some degree of national pros- perity.*
The career of Ismail Pasha, who as Khedive ruled over Egypt from 1863 to 1879, was a remarkable one. He was " as fine a type of the spendthrift as can well be found, whether in history or fic- tion. No equally reckless prodigal ever possessed equally unlim- ited control of equally vast resources. He came to the throne at a moment when there seemed to be no limit to the potential wealth of Egypt. The whole land was his to do what he liked with it. All the world was ready to lend money to develop it." The results of his government may be rightfully characterized from
- Notwithstanding the adverse criticism that has been made on the action and policy of
Great Britain, under the then existing circumstances, subsequent experience has proved that it saved Egypt from barbarism and anarchy, and all the nations interested in that country " from incalculable losses in blood and treasure, to say nothing of the deep dis- honor which these losses, foreseen and yet unhindered, would have brought on civilized mankind. The Arabist movement possessed great destructive force, but it had not within itself the elements necessary for the construction of anything enduring." — (Englatid in Egypt, Sir Alfred Milner.)
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almost every point of view as appalling. When lie commenced to rule in 1863 " the debt of Egypt was a little over three million pounds sterling ($15,000,000). The annual revenue of the country was amply sufi&cient to meet all needful expenditure. Yet at the end of 1876 the debt had risen to £89,000,000 ($4-15,000,000). A country of six million inhabitants and only five million acres of cultivated land had added to its burdens at the rate of £7,000,000 ($35,000,000) a year. At the same time the taxation of land had been increased by something like fifty per cent. There is nothing in the fiscal history of any country, from the remotest ages to the present time, equal to this carnival of extravagance and oppres- sion." (England in Egypt, by Sir Alfred Milner, late Under-Sec- retary for Finance in Egypt. London, 1891.)
The revenue annually collected under Ismail Pasha is probably not accurately known, and has been reported as high as £15,000,- 000 ($75,000,000) from an estimated population in 1872 of 5,203,000. But, whatever the amount, it is certain that a very considerable portion of what was wrung from the miserable peasantry, never found its way into any official ledger, or reached the national treas- ury. Of a great loan of £32,000,000 effected by the Khedive in 1873, only £20,700,000 reached the Egyptian treasury. The total amount sunk by the Government in the Suez Canal is estimated at £16,075,000 ($80,375,000). Yet Egypt haa no share in the vast profits of the undertaking. It was not, however, the amount of taxation, crushing as it was in many cases, which worked the [ greatest mischief. " It was, above all, the cruel and arbitrary man- \ ner in which the taxes were collected. The fellah was seldom sure of the amount that would be demanded of him. He was never sure of the moment when the demand would be made. The moment might, as likely as not, be the very one in which he was i least able to pay. Called upon to find ready money while his crops were still in the ground, he was simply driven into the arms of the money-lender. His choice lay between so many blows of the Jcoorhash and the acceptance of the usurer's terms, however onerous. Under these circumstances money was borrowed at as much as sixty per cent per annum. Worse than that, it was often obtained by the sale of the growing crops, which were estimated for the purpose of the advance at half or less than half their value. This state of things was bad enough, and it was pretty general, but the ruin of the cultivator was consummated in many instances by positive collusion with the usurer on the hint of cor- rupt officials. The latter would demand the payment of taxes by the peasant, who was already in debt, at the very time when the interest on his debt was due. If he had any cash at all the au- thorities were bound to get it. When the usurer came after them, there was nothing left to the fellah but to surrender his land and
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cattle, or renew his bond on still more ruinous terms. He was, in fact, entirely at the mercy of the lender."
That some betterment of such a condition of affairs was im- perative if civilization was to be maintained and the substantial dissolution of Egyptian society prevented, seemed evident, and to effect it most rationally and speedily, an experiment was insti- tuted that, as respects its nature and results, finds no parallel in the world's history. This in brief was the creation of a fiscal commission, by Sir Evelyn Baring, then British agent and consul general in Egypt (but now Lord Cromer, minister plenipotentiary), the members of which were selected solely by reason of their recognized qualifications for the work in hand and invested with almost autocratic powers. To this commission was intrusted the task of examining and reconstructing a revenue system of long duration and fortified by the precedents, customs, and prejudices, of an entire country, with a not inconsiderable population. The commission when organized in 1884-'85 entered upon its work under exceedingly unfavorable circumstances. The financial pres- sure was most acute. The magnitude of the national debt was apparently overwhelming ; and the prices of the leading agricul- tural staples of the country, depressed in an extraordinary degree by world-wide competition, consequent upon improved conditions of production and transportation, seemed to preclude all possi- bility of obtaining any increased revenues from the masses by a continuance of the old, or even by any new methods of extortion. The first step taken was to abolish as rapidly and as far as pos- sible all unnecessary and unproductive expenditures ; and for this there was large opportunity. A diminution was made in the pen- sion list, and in the number of superfluous and highly paid of- ficials. By the concurrent action of the great powers of Europe the rate of interest on the funded debt of Egypt was also some- what reduced.
The next important measure that claimed the attention of the commission was the grievance of the corvee, or system of enforced labor on the part of the peasantry on the public works ; which, if entitled to be called taxation, was taxation of the worst and most wasteful kind, entailing sacrifices upon the people out of all proportion to the money which it saved to the state. It was not, however, found practical at the outset to abolish it alto- gether. The old practice by which the fellahs might be dragged away from their villages at any moment for any purpose, public or private, upon which the Khedive might choose to employ them, was at once totally abrogated. On the other hand, the agricul- ture of Egypt, the main source of support of her people, depends upon the water of the Nile, distributed through irrigating ditches or canals ; and in order that these should fulfill their purpose, it is
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necessary to keep them clear of the mud which the Nile at the period of its annual overflow brings down in large quantities ; and to effect this, no other labor than that of the fellahs' is available. Finding that this indispensable work could be done by contract and paid labor, for about £400,000 ($2,000,000) per annum, the commission appropriated, from the funds made available from loans and the reduced expenses of the Government, the sum of £250,000, to be paid annually as compensation for such service, and thereby at once reduced by more than fifty per cent the num- ber of men formerly called out and compelled to perform service ; without payment. In addition, the employment of skilled engi- neers and the introduction of improved machinery for dredging and excavating, still further reduced both the necessity for the labor of individuals and the general aggregate of former expendi- tures. Whatever of the obligation of the corvee is still incum- bent on the fellah, as, for example, when he is called in any sud- den emergency to prevent breaks in embankments in time of flood, or keep clear the irrigation of his own land, is therefore largely in his own interest, and even this will probably at no dis- tant day be abolished. But, be this as it may, it is certain that what of the corvee the commission has felt compelled to retain does not represent one tithe of the awful incubus which the old corvee represented " in the days of the oppression." The use of the koorbash, or lash, which was the former invariable accompani- ment of unpaid labor in Egypt, has also been absolutely prohib- ited. Of other forms of relief to the people of Egypt, effected by the English fiscal commission, the following may be mentioned :
An abandonment of a tax on sheep, goats, and camels, which was very obnoxious to the agriculturists ; a tax on weighing and measuring ; octroi taxes on rice, oil, and other commodities ; and a tax on all trades and crafts, in the nature of licenses on business and professions, which was collected in innumerable small sums from the poorest of the people. The price of salt, the supply and sale of which was a monopoly of the state, has been reduced to the extent of forty per cent, while large abatements have been made in judicial fees, postal and telegraph rates, and in railway rates and fares.
As formerly, the tax on land is yet the corner stone of Egyp- tian finance, and can not be rapidly or radically disturbed ; but large measures of relief have nevertheless been instituted. A vexatious diversity of rates at which land has been assessed in different parts of the country has been simplified to the extent that a former total number of fourteen hundred different rates has been brought down to two hundred. The value of land varies greatly, according to its proximity to the Nile, and the extent to which it can be profitably supplied with water for irrigating pur- PRINCIPLES OF TAXATION. 151
poses — land devoted to growing rice crops requiring constant watering, but which must never be inundated. " From time im- memorial Egyptian law has recognized an intimate connection between the land tax and water supply. The land which, in any given year, gets no water, is for that year legally exempt from all taxation whatever. As soon as it gets water its liability is estab- lished. But it is evident that the mere fact of receiving some water, though it may set up the liability of the cultivator to pay, does not insure his capacity to do so. In order to insure that, he must get his water in proper quantities, and at the proper times. But this is just what, in thousands of instances, he could not get, as long as the irrigation system remained in the state of unutter- able neglect and confusion into which it had fallen in the period previous to the British occupation of the country." Arrears of land taxes throughout the whole country to the amount of about $5,000,000 have been remitted altogether by the commission, while lands incapable of cultivation, but heretofore made subject to taxation, have to a great extent been relieved.*
The area of land under cultivation in Egypt in 1894 was about five millions of acres; and in the least prosperous part of the country the tax on the same has been reduced, since the creation of the commission, to an extent of at least thirty per cent. The revenue from the taxation of land, which is at present estimated as not exceeding on an average £1 ($5) per acre, constitutes fully one half of the total receipts of the Egyptian treasury.
In 1886, before the reduction in this tax had been made.
��* " A considerable class of lands, called mazroof, sold many years ago by the Govern- ment at a quitrent which in the course of time had come to be looked upon as a specially high rate of land tax, has also been assimilated to the surrounding districts.
" Another measure of great importance for the future has been the adoption of more liberal fiscal regulations with regard to land brought for the first time under cultivation. Formerly the first attempt to reclaim a piece of uncultivated land brought down the tax- gatherer, who at once subjected it to the full burden of the land tax. Now it remains un- taxed until it yields the first remunerative crop, and then for two years it pays only half the normal rate. In the same broad spirit, facilities have been granted to people who are found without proper title in possession of land belonging to the Government, but on which they have spent labor and money in developing. Such occupiers can nowadays be confirmed in possession on very easy terms, in which full account is taken of all improvements. Finally, a scheme has been devised, and has been already applied with considerable success, for securing relief, without having to enter upon a general reassessment, in those no longer very numerous cases where the existing land tax is really excessive. Instead of allowing, as hitherto, arrears to accumulate which have ultimately to be remitted, the defaulting land is seized and put up for sale, but on such terms as to facilitate the re-entry of the owner on a lighter rating wherever the arrears are shown to be due to a prohibitive assessment in the past.
"Thus, not only the huge accumulation of arrears and the many smaller obstacles have been removed which blocked the approaches to the land tax, but the land tax itself has been cleared of its most mischievous excrescences."
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its reveime product was £5,116,000 ($25,580,000— the Egyptian pound being about £1 0^. 6d.). In 1891 its product, after the large reductions noted, was £5,098,000 ($25,490,000) ; a result con- stituting a new and striking illustration of a little regarded principle of taxation, that low or moderate taxes are as a rule more prolific of revenue than comparatively high taxes. It is also worthy of note that the land taxes of Egypt under the re- duced rates are collected with greater facility and much less ex- pense than under the old system.
Viewed, as it should be, rather as a rent than as a tax, the present Egyptian tax on land can hardly be regarded as oppress- ive. The number of land proprietors in Egypt, according to the revenue returns for 1893, was 1,025,000. In only 8,569 cases were the fiscal officers obliged to seize crops in payment of the land tax. In three out of four of such cases the mere seizure acted as a sufficient threat to induce payment, and in only 2,158 cases was it necessary actually to sell the defaulters' crops. As for the seizure and forced sale of the land itself, there were only 1,865 cases of seizure and less than one in nine of actual sale — viz., 204. The number of expropriations for failure to pay the land tax had therefore been reduced to the infinitesimal proportion of one in five thousand.
The total revenue receipts of the Egyptian treasury during the year 1886, after the commission had begun to exert an influ- ence on the fiscal affairs of the country, was £7,337,000. In 1890 they had increased to £8,040,000, and in 1891 to £8,366,000 ($41,- 830,000). To the extent of about one third, this augmentation was due to heavier taxes on tobacco, and a few new taxes, as a tax on house occupancy, from which all foreigners previous to 1887 were exempt. In general, the increase in revenue receipts consequent upon new taxes imposed since 1885 has been about £570,000 ; but the reductions of taxation have at the same time been notably in excess of this amount. The public debt of Egypt, which was nearly £99,000,000 in 1880, has been increased in recent years to the extent of between two and three millions ; but this increase has been mainly devoted to the redemption of pensions and to reproductive public works.
The general results that have been attained in Egypt under the fiscal and administrative policy of the British commission are, therefore, worthy at least of being characterized as extraor- dinary. They can not, moreover, be properly exemplified by any mere exhibit of figures. The benefit that has accrued to the Egyptian people can not be properly measured by a reduction of their taxes, but rather by the increase in their means of bearing the burden that remains. " The greatest vice of all in their old system of government was that, while the demands made upon
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the people were constantly increasing, their capacity to meet those demands were being steadily impaired. The Government took from them twice as much as it was entitled to take, and did not give them in return what it was bound to give ; while the coffers of the state and the pockets of its servants were being filled by the plunderer of the peasantry. The soil was deteriorating from the neglect of those great public works upon which its fertility depended."
All this abuse has now been entirely abrogated. For the first time since the days of the Roman administration, order and pros- perity reign in the valley of the Nile.
At no previous period since Egypt began to have a name has the fellah lived under a government so careful to protect his rights. For the first time he is allowed to control the fruits of his labor. To-day, under British domination, every Egyptian peasant knows exactly the amount of taxes he has to pay, and when he has to pay them ; and that when he has once paid the legal amount, no official, big or small, has the power to extort from him one single piaster beyond it.* He knows, too, that he can not at any moment be seized and dragged off as formerly, perhaps to some different part of the country, to work under constant dread of the whip, at any task suggested by the caprice of the Khedive or of some powerful pasha. Under such circumstances Egypt has never, certainly not within a recent period, enjoyed so large a measure of prosperity. Notwithstanding the recent universal decline in price of agricultural staples, the Egyptian products and exports of cotton, sugar, tobacco, wheat, etc., have rapidly increased, and at present are much greater than at any former period. The an- nual increase in the great staple product of Egyptian agriculture — cotton — from the average of 1884-'89 to that of 1893-'94 was nearly a hundred per cent, whereby the cultivator was not only able to pay his taxes more easily, but has more money left for his own needs.
When England first occupied the country the four-per-cent Egyptian debt securities were quoted at about 50, and not long before had been quoted as low as 27. To-day their quotation is over 100, with a reduction of their originally stipulated interest.
One of the most recent results of the British occupation of
- " The poorest peasant in the country is now annually furnished with a tax-paper, wird,
as it is called, which shows him exactly what he has to pay to the Government, and at what seasons the installments are due. The dates of these installments, moreover, which vary in different provinces, have been arranged so as to correspond as nearly as possible with the seasons when the cultivator realizes his produce, and is therefore in the best posi- tion to discharge hia debt to the state. The necessity no longer exists of resorting to bribery as a protection against the extortion of sums not due on the part of the tax- gatherer."
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��Egypt has been a practical abolition of buman slavery. Under existing regulations every slave in Egypt (tbe former great mar- ket for enslaved people of Africa) may demand bis manumission if be cbooses ; and if the Soudan be retaken by Egyptian troops under Britisb leadership, it will be equivalent to opening the prison doors to hundreds of thousands of captives.
In 1876 the district known as the "Payoum/' on the west side of the Nile, southwest of Cairo, was, according to a correspondent of the London Times, " reduced by misrule to the greatest depths of misery ever probably experienced in modern times in Egypt. Tbe burden of taxation and oppression bad produced an amount of want which almost bordered on starvation. At the present time (1894) it is one of the most prosperous and contented of prov- inces, and bids fair to become in the future the very garden of Egypt."
A further striking proof of the prosperity of Egypt under British administration is afforded by the financial report for 1895, made by Lord Cromer, the Britisb diplomatic agent, which shows a revenue in excess of all expenditures for that year of £1,088,000 ($5,440,000).
That the continued prosperity and development of Egypt are dependent on the continued administration of the country by the Britisb Government seems too clear to admit of questioning ; and it is also not less evident that if Egypt should now be abandoned by it, all that has been done for it would be speedily undone.*
Finally, in considering the recent and remarkable fiscal experi- ence of Egypt, one point of great economic interest should not be overlooked — namely, the lesson it teaches of the closeness of the relations of the finances of a state to the welfare of its people ; and that these relations, which are apt to be obscured, or even wholly lost sight of, under conditions of high and complex civiliza- tion, speedily make themselves apparent, and are therefore more easily traced and studied in a country of limited area and simple conditions of living on the part of its people. This experience historically groups itself under three separate and distinct peri- ods : First, the period of reckless prodigality under the reign of Ismail Pasha, from 1863 to 1879, of sixteen years. Second, a period of sudden retribution fraught with widespread misery, from 1879
- In a recent debate (1896) in the British House of Commons, Mr. Chamberlain, the
Secretary of State for the Colonial Department, said : " It would be impossible to pass judg- ment upon the policy of the Government unless the Government first made up its mind definitely in regard to the immediate evacuation of Egypt. Nothing in recent history could be looked back to with more pride and satisfaction than the peaceful revolution in Egyptian affairs which had been accomplished with a handful of men and a British civil administra- tion. If Egypt should be abandoned, all this would be undone. Egypt must be defended if her prosperity was to continue."
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to 1886. Third, a period of recovery from utter collapse, from 1886 to the present time, the result of intelligent fiscal administration so signal and complete as to be without precedent in history. It remains to be seen what will happen in the future in the event of the withdrawal of British occupation and governmental admin- istration of the country in compliance with the wishes of all the other great powers of Europe.
An illustration of how history in Egypt has seemingly re- peated itself in respect to taxation is here pertinent to the subject. Prior to the nineteenth century a key to the hieroglyphic writ- ing of Egypt or of the so-called " demotic," which was a short- hand or abridged form of the true hieroglyphics, had not been discovered, and there was little probability that it ever would be.
In 1799, however, during the French occupation of Egypt, a large slab of black granite (now in the British Museum), which originally had been a monument in some public edifice, was dis- covered in excavating for military purposes near the village of Rosetta, a place in Lower Egypt not far distant from Alexandria and the western mouth of the Nile. The slab had on it three in- scriptions — the first in hieroglyphic text, the second in the demotic character, and the third in Greek letters ; and a study and com- parison of them, mainly by Champollion, a French scholar, led to a solution of the problem of deciphering the hieroglyphic writing, which previously had almost completely baffled analysis. It was then found that the trilingual inscriptions were in the main a copy of a decree in honor of Ptolemy V, Epiphines, King of Egypt, who, about 193 B. c, had conferred great benefit on his country and its people by remitting certain taxes and reducing others, and read as follows :
Considering that the King Ptolemy, ever living, the well-beloved of Phtah, most gracious son of the King Ptolemy and of the Queen Arsinoe — gods philopatores (father-loving) — has done all kinds of good ; . . . that he has not neglected any of the means within his power to perform acts of humanity ; that in order that in his kingdom the people and in general all the citizens should be in prosperity, he has suppressed altogether some of the taxes and imposts established in Egypt, and has diminished the onus of others: . . , It has therefore pleased the priests of all the temples of the land to decree that all the honors belonging to the king shall be consider- ably augmented ; that his statue shall be erected in the most conspicuous spot in each temple ; that the priests shall perform three times each day religious service to these statues ; and that in all great solemnities all the honors due to other deities shall be paid them. . . ,
More than two thousand years have elapsed since the service rendered by Ptolemy to Egypt and its people by the remission and readjustment of taxes was thus commemorated. King,
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priests, and people have long since passed away ; but if they could return, their gratitude to the English tax commission for the service rendered to their country and to their de- scendants would certainly again be recognized and fitly com- memorated.
Another point of historical and fiscal interest in connection with Egypt is worthy of notice. Of the conquest and occupation of Egypt by the French, 1798-1801, the masses of its people have but little knowledge ; but the name of General Kldber, to whom the government of the country was intrusted by Napoleon on his return to France, is still held in grateful remembrance, coupled with the highest title that the Arabs could bestow upon him — namely, " The Just " — because under his rule, as popular expres- sion has it, " he levied taxes only once." *
Taxation in Brazil. — A most striking and instructive ex- ample of the strangulation of the commerce of a country, and its consequent impoverishment by reason of a vicious system for the collection of revenues, is to be found in the recent experience of the South American state of Brazil. Its Government derives its support mainly from export and import duties, and every prov- ince, whether maritime or interior, collects a separate duty of generally about four or five per cent on its exports, to which in some instances a municipal tax is added. There is no taxation upon either real or personal property ; but when a piece of real estate is sold, the purchaser is required to pay a fee to the Govern- ment of five per cent on the selling price. All stores are obliged to obtain a license, for which a fee is exacted, the amount varying with the kind of trade. The duties on imports are extremely heavy, and on many articles, especially foods, are in excess of their original cost at their place of production. On some of the princi- pal articles of export the duties have been as high as twenty-three per cent ad valorem, on rubber and cocoa fourteen per cent, and thirteen per cent on coffee. Few countries have greater commer- cial and industrial possibilities than Brazil ; but Nature's prodigal efforts have been rendered futile by a vicious system of taxation, which has so restricted the development of her resources that the increase of exports in recent years has been mainly confined to the single article of India rubber, for the supply of which the country has practically a monopoly. What is raised in Brazil is taxed ;
��* For the material which has furnished the basis for the foregoing narrative of the recent fiscal (tax) experience of Egypt, the writer has been mainly indebted to a book, England in Egypt, London, 1894, by Sir Alfred Milner, formerly a member of the Egyptian Fiscal Commission, and now chairman of the British Board of Inland Revenue ; to a series of letters published in the London Times in 1894 ; to various official documents, and inter- views with those personally conversant with the subject under consideration.
�� � what is bought by her is taxed; while taxes are levied on her product of labor and on the payments for such products. The general result, therefore, has been that the world can buy comparatively little of the Brazilian, and the Brazilian has comparatively little with which to buy of the world.