Chapter 27 Chapter IV Tax Refund

A monopoly in the home market does not suffice merchants and manufacturers, who want the widest possible foreign trade for their goods.Monopolizing foreign markets is not an easy task for them since their countries have no jurisdiction over foreign affairs.In general, they have no choice but to apply for export incentives to promote their own export trade. Tax rebate, among all kinds of incentives, can be said to be the most reasonable.The so-called tax rebate refers to all or part of the domestic industry tax or internal tax returned to the merchant due to the export of goods.Compared with the export volume without tax, the export volume of goods will not increase due to the export tax rebate.The rationality of the tax rebate is manifested in the following aspects: first, it will not cause a large amount of capital to transfer to a specific trade against the natural trend; second, it will not break the original balance of various trades in society; third, it will not affect The natural division of labor in society, but will maintain (for the most part) this favorable distribution.With this bounty, even the taxation would not induce any part of the great stock to be diverted to other trades, nor would it disturb the natural balance of the various commerce in the society.

Tax refunds are available when imported foreign goods are re-exported.In the UK, the amount of this tax rebate is equivalent to the tax paid on the import of most foreign goods.The second provision of the old subsidy tax by-laws: "Every businessman, regardless of nationality, is entitled to a refund of half of the old subsidy tax when exporting. However, British merchants must export within twelve months, while foreign merchants must export within nine months. Moreover, wine, currants and fine silk products that have already enjoyed other better subsidies and subsidies do not apply to this regulation.” The old subsidy tax in this decree was the only foreign commodity import tax at that time.Since then, the period for requesting various tax refunds has been extended to three years (Article 10 of Act No. 21 of George I VII).

Most of the tax paid after the implementation of the old subsidy tax was fully refunded at the time of export.However, there are exceptions to the above regulations. For example, the principle of tax rebates is not as simple as it was originally formulated. We may expect that certain foreign goods will be imported in vastly greater quantities than are necessary for domestic consumption, and that, when they are exported, the full amount of tax on them will be refunded, and half of the old subsidy will not be retained.For example, before the independence of the American colonies, the United Kingdom had a monopoly in the tobacco market in Maryland and Virginia, and the amount of tobacco imported into the country was about 96,000 barrels, which greatly exceeded the domestic consumption (14,000 barrels ).At this time, in order to promote this huge excess export, the policy stipulates that all the trade exported within three years will be refunded all the tariffs paid.

However, half of the old subsidy will still be retained when most goods are exported.Britain essentially monopolized the sugar market in the West Indies.Therefore, if the imported granulated sugar is exported within one year, all the customs duties paid are refunded; if the imported sugar is exported within three years, half of the old subsidy tax is retained, and the rest is refunded.This is because the excess of imported sugar over domestic consumption is insignificant compared with the enormous excess of tobacco. There are goods which compete with those of the English manufacturers, and the importation of such goods is therefore prohibited.But this is not absolute.They can also be imported by paying a certain duty, and can be re-exported, such as fine silk, French linen and fine linen, printed dyed cotton, etc.It's just that there is no tax refund for the export of these goods.Because our manufacturers seem unwilling to reward the export of these goods, they fear that these goods will compete with their own goods after export.

France is considered an enemy of England, so we are reluctant to sell French goods.We would rather give up our own interests than see them gain them in the UK.Therefore, not only will not half of the old subsidy be refunded on all French exports, but an additional twenty-five per cent tax will also not be refunded.For example, when French wine was imported in 1745, 1763 and 1778, a duty of twenty-five pounds per barrel was required, but it was not refundable when exported. According to Article 4 of the old Subsidy Tax Supplementary Regulations, the tax rebate amount for all wines when exported should be greater than half of its import tax.From this regulation, it seems that the legislator's intention is to give special rewards to wine exports.In practice, however, wine duties are only partially refunded upon export.Although taxes levied at the same time as the old subsidy tax or later, such as additional tax, new subsidy tax, one-third subsidy tax, two-thirds subsidy tax, 1692 customs duty and wine inspection tax, etc., are stipulated when wine is exported. Full refund of taxes paid, however, we know that, with the exception of surcharges and customs duties of 1692, all taxes are payable in cash on wine importation.We can imagine the huge interest loss in this process, so the wine export trade is actually not a very profitable trade.For example, in 1779 and 1781, the policy of allowing a full refund of the 5% tariff added to the import of all goods when it was exported also applied to wine; the tariff imposed on wine in 1780 also allowed It will be fully refunded upon export.However, even with the above incentives, the export of wine cannot be promoted due to the large number of reserved tariffs and taxes.It is worth mentioning that, except for the North American colonies, the above regulations apply to all other regions where exports are allowed.

Act No. 7 (Trade Incentives Act) of the fifteenth year of Charles II established the monopoly of England to supply all European products or manufactures (including wine) to the colonies.We know that the coastlines of the North American colonies and the West Indian colonies are so long, and the British rule there is relatively weak, that the above-mentioned monopoly rights have not been valued by everyone.At first, the colonists were allowed to use their own ships to ship goods that were not prohibited by the government to all parts of Europe; later, they were also allowed to ship goods to the European area south of Cape Finisterre.Of course, whenever they can, they can ship back some European goods from those European countries.As for wine, it is not easy to transport wine back to Europe from the place where the wine is produced; it seems to be even more difficult to transport wine back to Europe from the UK, because it imposes heavy taxes on wine and most of them do not have export tax rebates.As a result, the North American colonies and the West Indian colonies had to import wine from Madeira (they and Madeira can conduct free trade for various commodities that are not prohibited by the government, and the wine of Madeira is not a European product ). After the war began in 1755, British officers discovered that the colonists generally loved Madilla wine.Later, some military officers brought this preference back to England, but before that time, drinking this kind of wine was not popular in Britain. After the end of the war in 1763, according to Article 12 of the Fifteenth Decree of the Four Years of George III, except for French wines (the prejudice of the people, who did not agree to reward the trade and consumption of French wines), any other wine exported to the colonies, under the reserved three After pound ten shillings, other taxes can be refunded.However, the North American colonies became independent shortly after this preferential policy was issued, so the policy did not change those habits of the colonies.

As far as the colonies are concerned, the above-mentioned laws and regulations only give more preferential treatment than other countries in the tax rebate of wine (except French wine), but in the tax rebate of most other commodities, they receive more preferential treatment than other countries. much smaller.For example, when most goods are exported to other countries, half of the old subsidy tax can be obtained. Neither can get a refund of the old subsidy tax. The purpose of the tax rebate system is to reward export trade.Although the cost of transporting ships in export trade is paid by foreign countries, and export trade can bring back gold and silver to the country, on the surface it does not seem to need special rewards, but this reward itself is reasonable.This is because the tax rebate system is only to prevent the import tax from excluding a certain trade, it does not make the capital flowing into the export trade greater than the capital flowing into the trade when there is no import tax; and, for those who can neither invest in domestic agriculture and manufacturing , and cannot invest capital in domestic trade and foreign consumer goods trade, export trade solves its way out.Therefore, if the export trade should not be specially rewarded, it should not be hindered, and it should be allowed to develop as freely as every other trade.At the same time, the income from tariffs is not so much reduced by tax rebates as it is increased by tax rebates.Because at the time of tax rebate, a part of the tariff still has to be retained.Suppose, for example, that all customs duties are retained, and foreign goods on which import duties have been paid cannot be exported because of lack of a market, such goods will not be imported in the future.Then, the part of tariffs that could have been retained will be gone.

These reasons seem to justify even the full rebate of duties on domestic or foreign products upon export.Although domestic industrial taxes and tariffs will suffer some losses, the industrial balance (the natural division and distribution of labor) disturbed by the taxation will be restored.However, the above reason does not justify the tax rebate for the export of goods to countries where the UK already has a monopoly; it only justifies the tax rebate when the goods are exported to completely independent countries.Taking the export of European goods to the American colonies as an example, the tax rebate did not make the export value greater than the export value without tax.The reason is that Britain enjoys a monopoly position in the colonies, and even if the full tax is refunded, it will not increase the export volume to the colonies.In this case, tax rebates can neither change trade conditions nor expand trade, but only cause losses to national industrial taxes and tariffs.

What rebate, then, would be to the advantage of the colony's industry, or under what circumstances would it be to the advantage of the country to exempt the people of the colony from some amount of tax which no one else in the country would be exempted from?I intend to elaborate on this question when I discuss the colonies.It is well known that some tobacco tax rebates are often abused, creating fraudulent practices that are neither conducive to revenue nor to the justice of the trade.Therefore, it must be pointed out here that the tax rebate system will bring benefits only when the goods are actually exported abroad and not secretly flowed back to the home country.