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HOME   -   HISTORY DICTIONARY   -   TAXATION IN PRE-REVOLUTIONARY FRANCE

 
   


Customs Officials Attacked by Smugglers
Customs Officials Attacked by Smugglers


Taxation in Pre-Revolutionary France

Between 1500 and 1789, France was the leading power in Europe, dethroning Spain, making Austria the runner-up, and preceding Britain.

However . . .

 


Image Above
Douaniers attaqués par les contrebandiers

Customs officials attacked by smugglers.
 

Le Petit Journal, end of 19th century, which makes it post-revolutionary, of course.

Musée National des Douanes


. . . the country's revenues were based on a very complex system of taxation.

Carried over from olden times, each province had different tax agreements with the Crown. The resulting difference in tax rates from province to province made it necessary to set up internal customs barriers and was of course both, a challenge and a delight for smugglers.

As it turned out, this unequal system of taxation became major fuel to the 1789 bonfire of the  French Revolution.

How so?

 

What Is the Direct Connection Between Taxation in Pre-Revolutionary France and the French Revolution of 1789?

It was the King's deficit that caused him to desperately call for the  Estates General on August 8, 1788 — a deficit that could have been taken care of and balanced out by tax revenue.

But there is more.

Taxes under the ancient regime were based on privileges. Toward the end of the ancient regime, two things became apparent:

1  A system based on privileges was felt to be unjust.

2  A system based on privileges was almost impossible to reform effectively because it meant to cut the wings of the privileged, whose power was given to them by this very system.


Thus, in a nutshell, taxation in pre-revolutionary France illustrated the injustice and the impracticality of the actual cornerstone of French society at the time — privileges.

And by illustrating its inability to change, it demonstrated the need for a major overhaul of the social order in France.


Regarding financial reform see also Calonne, Necker, and Turgot.

Go here for a complete list of  French finance ministers under the ancien regime.


Let's dive in:

 

Currency

French currency was the livre, a silver coin worth 20 sols or sous. One sou was worth 12 deniers.

The louis, or louis d'or, was a gold coin. It was minted as a half-louis, and as a 2, 4, 8, and 10 louis coin. One louis was worth 24 livres.

Obverse of a 3 livres coin with Louis XVI sporting a bare neck somewhat invitingly
Obverse of a 3 livres coin with Louis XVI
sporting a bare neck somewhat invitingly
(Image enlarged, original is 3.5 cm or 1.37 inch in diameter)
Musée d'art et d'industrie de Saint-Étienne

 


Tax Exemption

Nobility and clergy were exempt from the largest direct tax, the taille. Most nobles were also exempt from the vingtième and enjoyed preferred handling with regards to the capitation tax. The last two taxes were also easy on the clergy by allowing them to pay a lump sum, the don gratuit, as opposed to taxing them individually.

If you had the money, you could purchase certain offices that came with ennoblement and tax privileges.

 

Tax Collection

France imposed direct and indirect taxes.

Direct taxes were collected by royal tax officials. At the end of the ancient regime, almost all indirect taxes had been outsourced to collection agencies, either via a 6-year lease to the ferme générale (General Tax Farm) or to a régie générale.

The main difference between the ferme générale and the régie générale was that the régie was a syndicate who received a fixed salary and the risk of revenue fluctuation remained with the Crown. The ferme had to pay their annual flat fee no matter how the economy was doing. On the other hand, the ferme had lots of leeway and could make a sweet profit.

Members of the ferme générale were called fermiers-généraux, or farmers-general. Members of the régie générale were called régisseurs.

 

Farmers General (Ferme Générale)

The Ferme Générale (Farmers General or General Tax Farm) was created in 1681 by the famous Jean-Baptiste Colbert, who lived 1619-1683, and was the  contrôleur Général des Finances under  Louis XIV.

Colbert sold the right to collect the royal taxes, i.e. the aide, traite, and gabelle, for an annual sum of 56 million livres. Colbert had a say in this institution and kept control of it. Later ministers didn't.

In 1747, the tabac was added to the deal.


The ferme generale became an impressive institution. Five large fermes generales joined forces and employed nearly 700 people at their headquarters in Paris.

After the army, the Farmers General was the second largest employer in the country, bringing in more than half of the government's revenue (see pie chart).

They operated up to 42 branches in the provinces, which, in turn, kept nearly 25,000 agents across the country busy. These agents were either occupied with collecting and processing the money or they were fighting smugglers.


:: What were their powers?
To enforce collection, the farmes generales could seize property. Their gardes were armed and uniformed. Part of that uniform was a little shoulder strap that identified them as acting on behalf of the King. They enjoyed special privileges and protection of the law. And a reputation of being very corrupt.


:: How did they make a profit?
By collecting whatever they owed on their lease, plus profit.

Highest revenue came from the gabelle, the salt tax. Unfortunately, the farmers generals could arbitrarily collect whatever whenever wherever. This did not happen all the time but there was little one could do if it did. On top of that they made you purchase a certain amount of salt, which of course had a tax on it.

Furthermore, it spoke for itself when these people arrived suddenly at immense fortunes.

Unpopular for obvious reasons, the Farmers General was abolished in 1791. The entire institution was nationalized and reduced to 15,000 agents. Internal customs barriers and the salt tax were eliminated.

In November 1793, the Convention ordered the arrest of all former members of the Ferme Générale. Many fled. The rest was guillotined, among them the chemist Antoine Laurent de Lavoisier.

Back to 1780.

 

French Budget 1780

Here is French Revenues and Expenditures around 1780. Population estimated at around 25 million. France had neither a state bank nor a stock exchange.

 

Pie Chart: France 1780 Total Revenues — 585 million livres
France 1780 Total Revenues — 585 million livres

 

Pie Chart: France 1780 Total Expenditure — 610 million livres
France 1780 Total Expenditure — 610 million livres

Deficit: 25 million livres

 

Based on Cambridge Economic History of Europe, vol. 8, page 370, in turn draws from A. Wagner (1910), pp. 176f.; and Marion, Histoire, vol. 1 (1914), Appendix, and Necker's estimates.

 

Interesting things about these pies:

Revenues:

  • Odd thing about revenues: nearly nothing from public lands. In 1773, it was 6.4 million livres, which was 1.6 % of total revenue. This meant that the main revenue had to come in via the other taxes. Meaning, taxation was hard on the folks that didn't have land. This was contributing to the resentment that exploded in the Revolution of 1789.


Expenditures:

  • Debt payment made 43% of the expenditures in 1780. It climbed up to 50.5% in 1788.
     

  • Military: 25%, which means a little bit more than administration (21%). Compared to Britain and Prussia, France spent much less on military, but much more on admin.
     

  • Court: 6% (34 million livres) was very high compared with the only other court in Europe that was able to compete, the court at Vienna.

 

Taxes in Proportion

Here is Revenues in more detail to illustrate tax proportions:

Pie Chart: France Taxes 1780
 

Taxes in Proportion
France 1780 Total Revenues — 585 million livres

 

 

The Taxes in Short

Different taxes were collected by different agencies at different times. The situation at the end of the ancient régime was as follows:

Direct Tax
 
Indirect Tax
 
Collected directly by royal officials:

Taille

Capitation

Vingtième

Collected by the ferme générale:

Gabelle

Tabac

 

  Collected by the régie générale:

Aide

Domaine

Traite

 

The Taxes in Detail

Taille (Property and Income Tax)

The taille was an ancient tax, established in 1445, originally paid to a lord in exchange for his protection. Hence, clergy and nobility were exempt.

This was a direct tax on the property and income of the unprivileged classes, collected by royal officials.

Louis XVI split the taille into taille personnelle (property / revenue / personal tax) and taille réelle (land and house property or household, applicable in Languedoc, Provence, Guyenne, Dauphiné).

The taille was abolished with the Revolution.

 

Capitation (Head Tax)

The capitation was established in 1695 by Phélypeaux de Pontchartrain, originally levied to pay war expenses. It was a direct tax, poll tax, on everyone and collected directly by royal officials.

The clergy paid an annual fee, the don gratuit. And that was that.

The nobility, civil servants, and privileged citizens paid anything from 20 sous to 2,000 livres, depending on rank, status, occupation, and property, which put them in one of the 22 different tax classes.

 

Vingtième (Income Tax)

The vingtieme was a direct tax on everyone, 5 percent on income, collected by royal officials.

Vingtieme means one twentieth, which was the standard rate in 1749.

Clergy, again, paid the don gratuit (lump sum) and were off the hook. But also provinces and cities could do that, meaning in effect that nobles and officials were usually exempt from the vingtieme.

The vingtieme was established in May 1749 (Edit de Marly) by  Machault d'Arnouville.

In 1756, a second vingtieme was created by Peyrenc de Moras.

In 1760, Bertin created a third vingtieme.

In 1786, the vingtieme was abolished.

 

Gabelle (Salt Tax)

The gabelle was an indirect tax, a salt tax, on everyone, collected by the ferme générale.

Back in the days, the gabelle was a tax not only on salt but on various goods. In 1360, it became a permanent tax.

It was abolished in March 1790.

1781 France - Gabelle
France 1781 - Gabelle

 

Tabac (tobacco)

Tabac was an indirect tax, formerly a state monopoly, later collected by the ferme générale.

 

Aides (Consumption Tax)

Indirect tax, a consumption or excise tax.

In the Middle Ages, the aides had to be paid by a vassal to his lord and were due in four cases: payment of a ransom if the lord had been taken prisoner, the knighting of his eldest son, the marriage of his eldest daughter, departure on crusade.

The aides transformed from an exceptional tax to a regular tax levied on consumer goods, such as wine, liquor, oil, textiles, tallow, iron, wood, livestock, playing cards, hides, soap, paper etc.

Thus it became an indirect tax on everyone. The aides were collected by the régie générale. Collection was complex and very tricky due to the regional inequalities. It even required the creation of a court, or board of excise (Cour des Aides) and a team of inspectors, brokers, appraisers and so on.

The aides were abolished with the Revolution.

 

Domaine

The domaines were taxes on the royal domain, the crown lands, collected by the régie générale.

Keeping an eye on everything that concerned the lands owned by the crown was the Chambre des Comptes, or Chamber of Accounts.

 

Traite (Customs Duty)

Traites were collected by the régie générale.

1781 France - Trade
France 1781 - Traites

 

Timbre (Stamp Tax)

The timbre was an indirect tax on legal transactions, collected by the régie générale.

 

Octroi (Local Customs)

The octrois were indirect taxes on goods that were brought into towns (customs).

 

Corvée

Not a tax per se but compulsory labor service on the peasants.

See also Corvee.


Tithes

Annual fee paid to churches by landowners.

 

 

Smuggling

An absurdly complex system of taxation naturally provoked smuggling on an enormous scale. Consequently, the fight against smugglers cost an enormous amount of money and required an enormous amount of manpower.

In 1784, construction begun in Paris on a continuous stone wall, known as Mur des Fermiers Généraux, or Wall of the Farmers-General, marking the city limits at the time. The wall was finished in 1787. It was higher than 3 meters / 10 feet and 23 km / 14 miles long, and its gates were guarded by tax officials.

This particular wall was built to limit the evasion of the octrois. But the smugglers found their ways around it, and the wall became a perfect target for the citizens' wrath. The prices for food were climbing while the greed of tax collectors were as widespread as they were well known. A saying by some unknown author became very popular during these days:

Le mur murant Paris rend Paris murmurant

It's not snappy at all after translation, but in other words, The wall walling Paris renders Paris murmuring. Or maybe, The wall walling Paris makes Paris wail.

And talking about things that snap. On the night of July 12/13, 1789, the citizens of Paris burned 40 tax barriers and ransacked tax offices.

Today we know, they were just warming up for the  bastille.

 

More About the French Financial Administration Under the Ancien Regime

Here is Necker's Compte rendu, 1781, in French and English:

Compte rendu au roi

Report to the King

 

 



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