The high duties which have been imposed upon the importation of many different sorts of foreign goods, in order to discourage their consumption in Great Britain, have in many cases served only to encourage smuggling, and in all cases have reduced the revenue of the customs below what more moderate duties would have afforded.The saying of Dr.Swift, that in the arithmetic of the customs two and two, instead of ****** four, make sometimes only one, holds perfectly true with regard to such heavy duties which never could have been imposed had not the mercantile system taught us, in many cases, to employ taxation as an instrument, not of revenue, but of monopoly.
The bounties which are sometimes given upon the exportation of home produce and manufactures, and the drawbacks which are paid upon the re-exportation of the greater part of foreign goods, have given occasion to many frauds, and to a species of smuggling more destructive of the public revenue than any other.
In order to obtain the bounty or drawback, the goods, it is well known, are sometimes shipped and sent to sea, but soon afterwards clandestinely relanded in some other part of the country.The defalcation of the revenue of customs occasioned by the bounties and drawbacks, of which a great part are obtained fraudulently, is very great.The gross produce of the customs in the year which ended on the 5th of January 1755 amounted to L5,068,000.The bounties which were paid out of this revenue, though in that year there was no bounty upon corn, amounted to L167,800.The drawbacks which were paid upon debentures and certificates, to L2,156,800.Bounties and drawbacks together amounted to L2,324,600.In consequence of these deductions the revenue of the customs amounted only to L2,743,400: from which, deducting L287,900 for the expense of management in salaries and other incidents, the net revenue of the customs for that year comes out to be L2,455,500.The expense of management amounts in this manner to between five and six per cent upon the gross revenue of the customs, and to something more than ten per cent upon what remains of that revenue after deducting what is paid away in bounties and drawbacks.
Heavy duties being imposed upon almost all goods imported, our merchant importers smuggle as much and make entry of as little as they can.Our merchant exporters, on the contrary, make entry of more than they export; sometimes out of vanity, and to pass for great dealers in goods which pay no duty, and sometimes to gain a bounty or a drawback.Our exports, in consequence of these different frauds, appear upon the customhouse books greatly to overbalance our imports, to the unspeakable comfort of those politicians who measure the national prosperity by what they call the balance of trade.
All goods imported, unless particularly exempted, and such exemptions are not very numerous, are liable to some duties of customs.If any goods are imported not mentioned in the book of rates, they are taxed at 4s.9 9/20d.for every twenty shillings value, according to the oath of the importer, that is, nearly at five subsidies, or five poundage duties.The book of rates is extremely comprehensive, and enumerates a great variety of articles, many of them little used, and therefore not well known.
It is upon this account frequently uncertain under what article a particular sort of goods ought to be classed, and consequently what duty they ought to pay.Mistakes with regard to this sometimes ruin the custom-house officer, and frequently occasion much trouble, expense, and vexation to the importer.In point of perspicuity, precision, and distinctness, therefore, the duties of customs are much more inferior to those of excise.
In order that the greater part of the members of any society should contribute to the public revenue in proportion to their respective expense, it does not seem necessary that every single article of that expense should be taxed.The revenue which is levied by the duties of excise is supposed to fall as equally upon the contributors as that which is levied by the duties of customs, and the duties of excise are imposed upon a few articles only of the most general use and consumption.It has been the opinion of many people that, by proper management, the duties of customs might likewise, without any loss to the public revenue, and with great advantage to foreign trade, be confined to a few articles only.
The foreign articles of the most general use and consumption in Great Britain seem at present to consist chiefly in foreign wines and brandies; in some of the productions of America and the West Indies- sugar, rum, tobacco, cocoanuts, etc.; and in some of those of the East Indies- tea, coffee, china-ware, spiceries of all kinds, several sorts of piece-goods, etc.These different articles afford, perhaps, at present, the greater part of the revenue which is drawn from the duties of customs.The taxes which at present subsist upon foreign manufactures, if you except those upon the few contained in the foregoing enumeration, have the greater part of them been imposed for the purpose, not of revenue, but of monopoly, or to give our own merchants an advantage in the home market.By removing all prohibitions, and by subjecting all foreign manufactures to such moderate taxes as it was found from experience afforded upon each article the greatest revenue to the public, our own workmen might still have a considerable advantage in the home market, and many articles, some of which at present afford no revenue to government, and others a very inconsiderable one, might afford a very great one.
High taxes, sometimes by diminishing the consumption of the taxed commodities, and sometimes by encouraging smuggling, frequently afford a smaller revenue to government than what might be drawn from more moderate taxes.
When the diminution of revenue is the effect of the diminution of consumption there can be but one remedy, and that is the lowering of the tax.