payer, the recipients of wages or salaries were considered also to possess some taxable ability, even if they had no property. We therefore frequently find an assessment on such individuals in some rough proportion to their gains. As there were virtually no important professions for a long time during the Middle Ages, this practically meant a tax upon the day laborer. In the case of official salaries, however, the same method was often pursued as in the case of real estate, and the salaries were reduced to a capital sum for purposes of taxation. In the fourth place, as trade and commerce developed, where the gains of the business man could not be approximately determined from the capital invested, we occasionally find as a supplement to the property tax, a tax upon assumed profits of business.

The medieval system was therefore really a little more than a general property tax. The overwhelming mass of the revenue came indeed from the tax on personal property and real estate, but this was now and then supplemented by a tax on the faculties of the laborers and sometimes by a tax on the assumed faculties of the business man. Occasionally we find, in addition to the general property tax and even as a part of it, a so-called personal tax, either in the shape of a poll or capitation tax, to reach individuals who had no property, or in the shape of a graduated capitation or class tax, designed to reach certain classes whose gains were not entirely in proportion to their property.

This is not the place to deal with the history of the tax, or to point out the process by which it everywhere became virtually a tax on real estate alone. Its only interest for us in this connection is the consideration that while property was considered the best test of faculty in taxation, it was from a very early period supplemented by considerations of product. It would, however, be a mistake to consider these examples of local taxation in the Middle Ages as illustrations of a local income tax, as some scholars have carelessly asserted.1 The

1 Cf. for instance, Schönberg, p. 178; and Espinas, p. 142, in the works quoted in the next note.

conception of an income tax as the basis of the tax system. was foreign to the ideas of the time. All that can reasonably be claimed is that while property was the general test of faculty, it was supplemented to a slight extent by the idea of product in those cases where property did not exist or could not be disposed of. It is the failure to distinguish between these conceptions which is responsible for the erroneous interpretations to which allusion has been made.

The numerous detailed investigations of communal finance have shown the truth of this fact beyond the peradventure of doubt. In Germany, for instance, we have such studies for the towns of Basel, Frankfort, Cologne, Brunswick, Augsburg, Osnabrück, Magdeburg, Ueberlingen, Ulm, and Dortmund.1 In France and Belgium we have similar investigations for the towns of Douai, Amiens, Cambrai, Dinant, Luxemburg, and Senlis.2 The same is true of local taxation in England, the

1 G. Schönberg, Finanz-verhältnisse der Stadt Basel im XIV und XV Jahrhundert. Tübingen, 1879; T. Geering, Handel und Industrie der Stadt Basel bis zum Ende des XVII Jahrhunderts. Basel, 1886; K. Bucher, "Der öffentliche Haushalt der Stadt Frankfurt im Mittelalter," in Zeitschrift für die gesammte Staatswissenschaft, vol. lii (1896), pp. 1 et seq.; A. Henning, Steuergeschichte von Köln in den ersten Jahrhunderten städtischer Selbständigkeit bis zum Jahre 1370. Dessau, 1891; R. Knipping, Die Kölner Stadtrechnungen des Mittelalters. Bonn, 1897; H. Mack, Die Finanzgeschichte der Stadt Braunschweig bis zum Jahr 1374. Breslau, 1899; C. Meyer, "Der Haushalt einer deutschen Stadt im Mittelalter," in Vierteljahrschrift für Volkswirthschaft, Politik und Kulturgeschichte, vol. ciii (1889), pp. 48 et seq.; C. Stüve, Stadtrechnungen von Osnabrück aus dem 13. und 14. Jahrhundert. Osnabrück, 1890; C. Bielefeld, Das Steuerwesen im Erzstift Magdeburg. Magdeburg, 1888; Schäfer, Wirtschafts-und Finanzgeschichte von Ueberlingen, von 1550-1628. Breslau, 1893; A. Kölle, Die Vermögensteuer der Reichsstadt Ulm. Tübingen, 1896; K. Rübel, Dortmunder Finanz-und Steuerwesen. Dortmund, 1892. Cf. also, for a more general survey, K. Zeumer, Die Deutschen Städtessteuern im 12. und 13. Jahrhundert. Leipzig, 1878; and W. Stieda, "Städtische Finanzen im Mittelalter," in Conrad's Jahrbücher für National-Oekonomie und Statistik. III Folge, vol. xviii (1899), pp. 1 et seq.

2 G. Espinas, Les Finances de la Commune de Douai des Origines au XVe Siècle. Paris, 1902. This work contains some admirable comparative summaries of continental local finance and an excellent bibliography; E. Maugis, Essai sur le Régime Financier de la Ville d'Amiens du XIVe à la Fin du XVIe Siècle. Amiens, 1899; W. Reinecke, Geschichte der Stadt Cambrai bis zur Erteilung der

story of which has been told by Cannan, although he also carelessly states that "the poor rate was intended to be a local income tax upon the inhabitants of the parishes."1 Ability is, indeed, continually mentioned as a test of taxation; but it was property or, at most, property plus product, and not income, which was taken as a criterion of ability. The history of the local rates in England, from the sixteenth and seventeenth centuries, is similar to that of the local tax or tallage of the earlier Middle Ages, where "faculties" and "chattels" (facultates et catalla) were considered for the most part synonymous,2 and where product was employed as a supplement to property. So also in Scotland, where the medieval property tax, under the name of the cess and of the stent, lasted until very recent times, the stent roll was made up according to the taxpayer's "means and substance," and we are told that the estimate of means, which comprised all the taxpayer's property, "appears to have included the incomes due to personal exertion of professional men and artisans, although no case seems to have come before the courts with reference to such incomes." 3 This tax on the so-called income of professional classes, like that on the profits of trade, was only a very subordinate part of the general stent which, as one of the laws puts it, was to be assessed upon the taxpayer "according to the avail and quantity of his rent, living, goods, and gear that he has within burgh." 4 Neither in England nor in Scotland did

lex Godefridi. Marburg, 1896; H. Pirenne, Histoire de la Constitution de la Ville de Dinant au Moyen Age. Gand, 1889; N. Van Wervecke, Les Finances de la Ville de Luxembourg pendant le Règne de Philippe le Bon. Luxembourg, 1895; J. Flammermont, Histoire des Institutions Municipales de Senlis. Paris, 1881. Cf. also in general Beaumanoir, Coutumes de Beauvaisis. 2 vols. Paris,

1899-1900.

1 Edwin Cannan, The History of Local Rates in England. London, 1896, p. 69. Cf. also the admirable history contained in the Report of the Poor Law Commissioners on Local Taxation. London, 1843.

2 Seligman, Essays in Taxation, 8th ed., p. 41.

8 S. H. Turner, The History of Local Taxation in Scotland. Edinburgh, 1998, p. 38.

4 Ibid., p. 159.

the occasional assessment of professional earnings or of business profits suffice to convert the rate or stent into a "local income tax," any more than the wages tax or the business tax of the German states during the nineteenth century availed, as we shall learn, to make of the taxes on product a system of income taxation.

All over the Continent, as well as in Great Britain, the general property tax gradually shriveled up. First, personal property slipped out of the lists, and with it the few assessments on the profits of the tradespeople. A little later, the faculty tax on earnings disappeared until finally nothing was left but a tax on real estate levied, as is to a great extent still the fact, on the rental value of the land and house. Thus what was everywhere at the beginning a personal tax on the individual, measured primarily by his property and to a minor extent by the produce of the other elements of his taxable ability, turned into a real tax or a tax on the thing itself, that is, on the real estate.

To this general rule of the medieval development there is only one important exception, namely, in the Italian towns. The Italian towns, in the early Middle Ages, were not only the centres of the new industry, but for a time witnessed a far more determined and temporarily successful struggle of democracy against aristocratic government. It is especially in Florence that we find this democratic movement, and it is accordingly there that we see the same strong tendency toward the taxation of incomes that we witness at the present day in modern democracies.

The general history of the Florentine movement, and more especially of the struggle for progressive taxation, has been told elsewhere. Another aspect of the story may, however, be mentioned here, in so far as it is of importance for our

1 Seligman, Progressive Taxation, part 1, § 3, "The Italian Republics." The detailed history of the tax will be found in G. Canestrini, La Scienza e l'Arte di Stato, desunta dagli Atti officiali della Republica Fiorentina e dei Medici. Ordinamenti Economici. - Della Finanza, Parte I, L'Imposta sulla Ricchezza Mobile e Immobile. Firenze, 1862.

purposes. In the original property tax or the estimo of the fourteenth and the beginning of the fifteenth centuries, we find, as in the similar local taxes elsewhere in Europe, that the tax was based upon an estimate of property in general. The value of real estate, for instance, was ascertained by capitalizing the rent, and an attempt was made to reach the presumed gains of the business men, which were thereupon also capitalized at the rate of five per cent.1 The reason, however, why the estimo gave way to the catasto in 1451 or, in other words, the reason why the property tax changed into an income tax, was the fact that in a large commercial or industrial centre, where the mass of wealth was being accumulated out of the earnings of industry and commerce rather than, as elsewhere, out of the rent of land, property was no longer so good an index of faculty as income. The democracy of Florence was as much impressed by the business earnings of the large merchant princes as are the modern democracies of Europe or America influenced by the gains of the trust magnates and of the financial kings. The democratic movement of the medieval Italian republics is therefore responsible for the evolution of the property tax into an income tax. The catasto was a real income tax, and shortly afterward it was made progressive under the name of the scala.

From the very outset, however, the political conditions were unfavorable to efficient administration. In the struggle with the Medici the assessment of the income tax became a favorite weapon of whatever party happened to be in power; and at no other time in the world's history except, perhaps, in the later centuries of the decaying Roman Empire, was there such an orgy of corruption and of maladministration. In order to ascertain the business profits, the books of the merchants were open to inspection, and the assessors had practically unlimited scope in deciding upon the amount of the levy. Individuals might compound with the officials in a lump sum, and the frauds were accordingly overwhelming 1 Canestrini, op. cit., pp. 26, 27.