Questions of Public Law (1737)
Cornelius van Bynkershoek
Miscellaneous Questions about Taxes, Revenues, and Tax Collectors
QUESTIONS of taxes and revenues particularly concern those who govern a state, for experience would teach us even though Tacitus had not said that ‘nations cannot be kept at peace without armies, armies cannot exist without pay, pay cannot be furnished without tribute’. Though it is difficult to distinguish in meaning between the words tributum and vectigal, yet for the sake of attempting a definition we call by the word tributum (tax) the returns that are collected on account of property owned or acquired or levied on the person, while we apply the word vectigal (revenue) to returns that are collected on account of imports, exports, and fungibles that we buy. This is the distinction that Tacitus employs between tributa and portoria or vectigalia.
It is an ancient complaint that contributions are exceedingly burdensome in the Netherlands and especially in Holland. Some think that this is a misfortune common to republics that are governed by many; for these administrators convince themselves that the more numerous they are, the larger must be the revenues to support them like so many princes, as it were. But I am not now concerned with the question whether subjects of despots are more fortunate in this respect. This is at least true that whatever has ever been taxed for revenue in any other nation is taxed here, and one would not be far wrong if one granted that our taxes are even greater. At Rome a tax was imposed upon celibacy in order to encourage an increase in population; in Holland and Zealand there is even a tax on marriage; indeed here we may not even die with impunity. There is even a different form of greed which in some places exacts a revenue from the dead, for the churches demand an offering for the bodies that are carried past them for burial elsewhere. Peckius inveighs against this practice calling it wholly illegal. One might suppose from the Digest that the practice was in vogue among the Romans, for the expenses of the funeral are mentioned si qua vectigalia sunt (if there be any rent). But since there is no other authority for it and none exists so far as I know there is good reason for assuming a more generous attitude among the Romans for their dead; and we may refer these vectigalia to the dues exacted on account of the horses, ships, men, and whatever else is in the funeral train proceeding to another place. For on this score tribute could doubtless be exacted as readily as if they were going elsewhere for any other purpose. Furthermore, the readings in the passage vary; however, I am not now concerned with this matter. In the Netherlands at any rate the practice cannot be approved, for here prayers are not said for the dead in the churches past which the body is carried; in fact according to the Calvinistic faith they may not be said for the dead and that would seem to be the origin of the practice, as others have already observed. But the Calvinists have long been guilty of pursuing the profits that the papal priests secured by their services, although they do not perform the same services. I also would put an end to this greedy practice by applying section 39 of the so-called Politicque Ordonnantie which the Estates of Holland issued on April 1, 1580. For this privilege, such as it is, which the churches exercise may be treated as a kind of jurisdiction. And it should be curbed all the more because of the ease with which the priests can make their exaction, for no one will permit the funeral train to be detained in order not to pay the toll. This practice is not unlike the deed of brigandage that Suetonius relates of the people of Pollentia.
We know from Roman law that an itemized list of properties is made in census-taking. But in Holland and in some other places this practice is not looked upon with approval. We have a decree of the Estates of Holland (January 22, 1675) which on account of hard times then prevailing, required that the one-half per cent. tax be paid even on property owned in foreign lands; and yet this very decree prohibited the requirement of a description of the property. The Court of Holland likewise forbade this with a threat of penalty in the Mandate of October 21, 1677, when a certain man was charged with having given false census returns. In this decree of January 22, 1675, the Estates hold that, in view of conditions existing in these regions, it is wrong to exact a description of property, and accordingly the state must rely upon the oath of the taxpayer; and yet burgomasters of cities and counsellors of the Estates are ordered to inform themselves as well as they can about the property holdings of each individual, and to undertake to prosecute for the public account those who make false declarations. This practice of relying upon the oath is not unlike the ancient custom of the Germans which Machiavelli lauds as a striking illustration of true integrity. He there says that the Germans in place of tribute pay a one per cent. or two per cent. tax upon their property, and that when they have taken oath that they would pay the due amount, they do so without any investigation of accounts or compulsion. But even more honourable was the behaviour of some Hollanders of the early days of the republic, for I have heard that when the taxes were being collected without any definite system, very many of them complained that less was being exacted than should be, and they accordingly offered and paid a greater sum to the state. As Machiavelli attributed the behaviour of the Germans to their love of liberty, so it is very true in the Netherlands that those who were most devoted to the cause of liberty were the most ready and willing to pay even the heaviest taxes, knowing well, as they did, that a good man does not surrender liberty except with the breath of life, so that it is a small matter to give a part of one’s property in its defence. Public property is immune from tax; and though the mints of Holland formerly paid taxes, the Estates decreed on February 25, 1667, that the mints should not be liable to tax since they belonged to the Estates. The question, however, has been raised whether the public property belonging to the States-General should also be exempt from taxes in the several provinces. When the admiralty board of Rotterdam had built an arsenal at Hellevoetsluis, and asked the Estates of Holland on March 19, 1658, that this be exempt from taxes in Holland, then and for the future, the Estates refused the request on April 1, 1658. On the same day they decreed that all the arsenals of the States-General were and would remain subject to taxation. However, this hardly agrees with the later decree of August 5, 1667; for at that time when the Estates of Holland had levied a tax upon carriages, yachts, and similar properties, and the collector who had engaged to farm this tax decided also to collect on the properties of this kind at Rotterdam which belonged to the States-General and their college, the counsellors of the States-General wrote (July 21, 1667) to the Estates of Holland asking them to interfere, ‘since the yachts and other vessels belonging to these, were not the property of any individual inhabitant of the state but were absolutely the property of the state’. The Estates of Holland decided accordingly on August 5, 1667, giving as reason, ‘since the aforesaid yachts are not pleasure vessels nor the property of private persons, but on the contrary are all used in the service of the whole state’. Are we to conclude then, that the arsenals of the States-General which pay taxes to Holland according to the decree of April 1, 1658, are private property, or that they were not built for the purposes of the whole state? It is evident that the two decrees are inconsistent. From a purely legal point of view the earlier decree can be defended since the sovereign can rightly impose taxes on all property within his domain. But we should consider whether it is a friendly act to impose taxes to our own advantage upon property of a confederate state when more than half of that property belongs to us and when the confederation could not exist without the use of that property. This is a consideration that can very frequently be urged when we are taking things that pertain to transportation and to war.
At Rome taxes and revenues were collected not only for the Emperor but also for certain cities. As Suetonius relates, Tiberius deprived many cities of their right to these, but Alexander Severus restored them again for the support of their factories, according to Lampridius. And Ammianus Marcellinus relates that the right of taxing was in general restored to the cities by Julian. In Holland revenues are collected not only by the Estates but also by certain cities, the latter of course on the basis of special grants. For as among the Romans no one but the Emperor could impose a tribute, so also Charles V decreed on July 6, 1515l and again on September 8, 1518, that no city or township in Holland should impose a new revenue tax on wine, beer, or any other thing, or change the old tax, without the special permission of the Count. In fact the later Counts so merged all revenues in their own hands that not even the Estates seem to have imposed any new taxes or revenues without special permission, even though the tax was payable to the Count. Examples of this kind of grant are the concessions which Charles V gave to the Estates of Holland on January 5, 1543 and April 16, 1543.
Jurists discuss the question whether it is lawful for cities and townships to impose taxes and dues upon the citizens and inhabitants for the sake of paying off debts, building or repairing public buildings, and for other necessary disbursements. The question must be answered with reference to the form of the government in each case. In ancient times in Holland even the meaner lords of domains seem to have done so, whence arose the frequent practice of the inhabitants to agree upon terms with the lords so that the exactions should be limited. This right is even now exercised in various ways. For instance, those who have charge of the construction and the repair of the dikes still levy certain tolls for this purpose, and various lords of no high station impose them almost without pretext. However, since the power and influence of the Counts became all important, it was not lawful to levy such taxes and tolls without a grant from them especially after the above-mentioned edicts of Charles V, dated 1515 and 1518. Accordingly, when the Lord of Brederode attended the coronation of Charles V at Aachen and, to defray the expenses of the journey, levied a tax upon the people of Bodegraven, these refused, insisting that no one had the right to levy tributes in Holland without permission of the Counts, and they were sustained by the Court of Holland on February 25, 1524. Again the bailiffs and others formerly exacted moneys in the form of taxes and tolls, not alleging any law but merely usage, and they successfully maintained the custom because individuals did not find it convenient to carry cases to court when often only a small sum was involved. But this form of robbery was restricted by the Estates of Holland by means of section 39 of De Politicque Ordonnantie passed April 1, 1580. And yet even to-day there are an abundance of offences of this nature.
At Rome a release from a part of the pledged amount in a contract was allowed in case of unforeseen disasters, and this also obtained in contracts of revenue-collectors. At any rate Ulpian enumerates certain conditions in which the tax is remitted or lowered, and I read in Polybius that the Roman Senate remitted a part of the contracted sum to the tax collectors on account of disasters. This remission in whole or in part is particularly appropriate if the loss which the tax farmer sustains results from some act of the party letting the contract, as for instance if he exempts certain people from tax after the contract has been made, or prohibits the importation or exportation of goods that are liable to duty, or forbids the use of articles which produce revenue. This for instance is said to be the reason why Pope Innocent XII could not carry through his sumptuary laws in 1694, since theologians and jurists expressed the opinion that the Pope would be bound to reimburse the tax farmers for the losses they would suffer.
However, we are rather concerned with the law of Holland in the matter. Now the counsellors of the Estates of Holland are not able to make any remissions to tax farmers according to section 11 of their ordinance adopted October 4, 1670, not, to be sure, because no remissions are allowed, but because the counsellors are “not empowered to give any. In section 16 of the ordinance which the Estates of Holland gave their college on February 19, 1585, the statement is made that the Estates alone can consider cases of remission of moneys which the tax farmers owe the state. Hence it is apparent that remission was then possible if the Estates considered that the reasons justified it. And no grounds could be more just than if, as I said, the Estate themselves had done something which entailed losses to the tax farmers after the contract had been made. I therefore am surprised, that according to sections 33 and 35 of the Formulary of public revenues, no remissions are allowed the tax farmers in Holland if the export is prohibited of merchandise or other things upon which a duty is levied, or if exemption from taxes is granted some individuals after the contract has been let. The only ground for remission, according to the section in question, is the occupation by the enemy of places whose revenues are due the tax farmers, and this exemption is estimated in proportion to the time of occupancy. For this same cause the States-General in 1640 and 1668 decided to remit to the Estates of the several provinces the amount of damage these had sustained in the loss of revenues during the time certain parts of the provinces had been occupied and devastated by the enemy. This ground is of course wholly just; but no less just are the two reasons which I have mentioned. The States-General finally adopted one of the two reasons in section 23 of the most recent revenue-ordinance passed March 11, 1723. That is, they allow remissions in case the importation of certain goods is prohibited (the case of exports ought to be treated on the same grounds), but the other reason, which involves cases of personal exemption from taxes, they do not mention. However, they accept three new reasons for remission, namely inundations, great conflagrations, and plagues. Apparently, therefore, all other possible reasons are excluded.
We must accordingly reject a statement made by some authorities that tax contractors in Holland have the same rights of remission as the contractors dealing in other affairs. Hitherto not even the plague has been considered a justification for remission but only of a deferring of payment, as appears in Casus XLIII, of the Political Disquisitions. The counsellors of Holland and those of the Netherlands have given the general advice that if the Estates cause damage to the tax collectors by new decrees they ought to make good the losses, and this is the correct position in my opinion. In this whole matter, if we would follow the Roman law which places public contractors on the same legal basis as others, it would be better than, as at present, to reject arbitrarily certain reasons there accepted, and fail to admit others that are equally worthy or even more so. The reasons enumerated in sections 15, 25, and 95 of the ordinance which the Estates of Holland imposed upon their treasury officials on March 12, 1593, agree on the whole with Roman law.