Los límites del absolutismo fiscal: la “extraordinaria contribución de 1779

Abstract

In 1779 Charles III’s government raised the Rentas Provinciales y Equivalentes [taxes designed to even out the regional tax burden] by 30% to fund war with Great Britain. This tax rise has always been construed as an example of fiscal absolutism. The government was able to hike taxes by 30%, it was argued, because its fiscal powers were unlimited. In this paper we analyse how the government planned and implemented this tax change, concluding that the operation was by no means straightforward. The government delayed the rise for as long as it could and, when it finally went ahead, sought the legitimacy of “public opinion” and softened the impact on the taxpayer as much as it could. Rather than a tax hike the government sought a specific transfer of surplus funds from local government coffers, whose control had been one of the thrusts of the previous taxation reform. This operation brought out the stark inconsistency of the government’s fiscal policy, which came to a head when the municipal coffers proved to be empty. In the end the government had to hand over the reins to the local councils, which were forced to raise consumer taxes and run up debts, just what the government had originally set out to avoid. We conclude that the limits were in fact set by fear of the taxpayer and the inconsistency of fiscal policy.