Chapter

Taxing to the Hilt? Structural Weakness and Falling Revenues

Guy Rowlands

in The Financial Decline of a Great Power

Published in print October 2012 | ISBN: 9780199585076
Published online January 2013 | e-ISBN: 9780191744600 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199585076.003.0004
Taxing to the Hilt? Structural Weakness and Falling Revenues

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The French economy was the largest in Europe but the complexities of its taxation system, which directly reflected the way society was constructed around privileges, made it hard for the state to tap the surplus wealth. The direct taxes were collected by networks of royal officials, organised by province, who owned their offices and pledged their credit to bridge shortfalls and delays in taxation flow. A wide range of indirect taxes were largely contracted out to the farmers general, who ran a huge company that passed funds to the king in return for a profit, but investment returns declined and the state eventually came to shoulder the entire risk. As tax yields fell the government increased the headline rates, but desperation for cash forced the king to allow privileged groups and even entire provinces to buy themselves out of future taxation, further shrinking the tax base.

Keywords: direct taxation; indirect taxation; privileges; farmers general; profits; contracts

Chapter.  8763 words. 

Subjects: Modern History (1700 to 1945)

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