# Taxes Which Are Proportioned, Not to the Rent, but to the Produce of Land explained — The Wealth of Nations

> Chapter companion for The Wealth of Nations by Adam Smith.

## What happens

This chapter examines land taxes that are based on the produce rather than the rent, arguing that such taxes ultimately fall on the landlord. It discusses the inequality of tithes, which disproportionately burden poorer lands, and their discouraging effect on agricultural improvement. The chapter also compares different systems of land taxation in Europe and Asia, including the Chinese and Bengal systems, and critiques the East India Company's management of revenue.

## Themes in this chapter

### Social Class and Inequality

The tithe is shown to be unequal, burdening poorer lands more heavily and affecting landlords and farmers differently.

### Role of Government

Compares how different governments (China, Bengal, Egypt) manage land taxes and their impact on infrastructure and cultivation.

### Wealth and Money

Discusses the valuation of taxes in kind versus money, and how fixed valuations affect revenue relative to produce value.

## Character check-ins

### The Servants of the Company

Criticized for exchanging a moderate modus for payment in kind, discouraging cultivation and enabling abuse.

### The Chinese

Mentioned as having a land-tax system where the sovereign's revenue includes a tenth of produce, with attention to infrastructure.

### Great Britain

Referenced in context of the English land-tax and the statute regarding madder cultivation.

## Key lines

> Taxes upon the produce of land are in reality taxes upon the rent; and though they may be originally advanced by the farmer, are finally paid by the landlord.

Land taxes on produce effectively reduce the rent the landlord receives, as the farmer deducts the tax from the rent.

_Explains the incidence of produce-based taxes._

> The tithe, and every other land-tax of this kind, under the appearance of perfect equality, are very unequal taxes; a certain portion of the produce being, in different situations, equivalent to a very different portion of the rent.

Tithes appear fair but are actually unequal because the same fraction of produce represents a larger share of rent on poor land than on rich land.

_Highlights the regressive nature of tithes._

> The tithe, as it is frequently a very unequal tax upon the rent, so it is always a great discouragement both to the improvements of the landlord and to the cultivation of the farmer.

Tithes discourage landlords from improving land and farmers from growing valuable crops because the church takes a large share without contributing to costs.

_Describes the disincentive effect of tithes._

> The servants of the company may, perhaps, have profited by this change, but at the expense, it is probable, both of their masters and of the country.

The East India Company's servants likely gained from switching to payment in kind, but this harmed the company and the region.

_Critique of colonial revenue management._

## Links

- HTML: https://www.betterreads.online/discover/the_wealth_of_nations_se/chapters/taxes-which-are-proportioned-not-to-the-rent-but-to-the-produce-of-land
- Book: https://www.betterreads.online/discover/the_wealth_of_nations_se
- All chapters: https://www.betterreads.online/discover/the_wealth_of_nations_se/chapters