Fiscal Contributions
Fiscal contributions were of prime concern to policymakers in the 17th century, as they have remained ever since, for the wise country would not spend above its revenues. By Petty’s time, England was engaged in war with Holland, and in the first three chapters of Treatise of Taxes and Contributions, Petty sought to establish principles of taxation and public expenditure, to which the monarch could adhere, when deciding how to raise money for the war. Petty lists six kinds of public charge, namely defence, governance, the pastorage of men’s souls, education, the maintenance of impotents of all sorts and infrastructure, or things of universal good. He then discusses general and particular causes of changes in these charges. He thinks that there is great scope for reduction of the first four public charges, and recommends increased spending on care for the elderly, sick, orphans, etc., as well as the government employment of supernumeraries.
On the issue of raising taxes, Petty was a definite proponent of consumption taxes. He recommended that in general taxes should be just sufficient to meet the various types of public charges that he listed. They should also be horizontally equitable, regular and proportionate. He condemned poll taxes as very unequal and excise on beer as taxing the poor excessively. He recommended a much higher quality of statistical information, in order to raise taxes more fairly. Imports should be taxed, but only in such a way that would put them on a level playing field with domestic produce. A vital aspect of economies at this time was that they were transforming from barter economies to money economies. Linked to this, and aware of the scarcity of money, Petty recommends that taxes be payable in forms other than gold or silver, which he estimated to be less than 1% of national wealth. To him, too much importance was placed on money, 'which is to the whole effect of the Kingdom… not one to 100'.
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