Though the civil wars of the 15th century brought in many
forfeited estates the grants of Edward IV. kept down the increase.
But the chief opportunity for aggrandizement was afforded by
the dissolution of the monasteries and gilds under Henry VIII.
The great mass of property that passed into the royal possession
in this way was in part assigned to nobles and officials, while
most of the remainder was distributed in the reigns of his
children. The dwindling importance of the public revenue from
land and rent charges is as noticeable under the Tudors as in
earlier times. In like manner the feudal dues had fallen into a
very subordinate place notwithstanding the attempts made on
particular occasions to enforce them with greater rigour. The
force of personal monarchy exercised by the Tudors, depending
as it did on popular support, tended to encourage the collection
of dues which had a legal ground in preference to taxation of
the community. Of similar character was the employment of the
old right of purveyance (q.v.), in restraint of which a series of
statutes had been passed.
Whatever possibilities of obtaining some additional revenue from the crown lands or prerogative rights may have existed in the 16th century, and these were slight, all the political and social conditions tended more and more to make the need of taxation as the principal financial resource imperative. Amongst the cases of increased calls for funds to maintain the machinery of state, the rise of prices, due to increased supplies of the precious metals, must be included as one of the chief, and its effect extends into the 17th century. It was under this influence that the old forms of revenue became less profitable and that fresh developments were necessitated.
Direct taxation still retained in one of its branches the pattern set in the reign of Edward III. “Tenths and fifteenths” continued to be voted, and for some time all attempts to introduce new methods failed. In 1488 a military grant framed on the model of the abortive tax of 1472 yielded only a little over one-third of the estimate (£27,000 out of £75,000), and the unsatisfactory result prevented further experiments on the part of Henry VII. The foreign policy of Henry VIII.—particularly his French expedition—with its attendant outlay, accounts for the graduated capitation tax of 1513, which was even less in accordance with anticipation than the tax of 1488 (it yielded only £50,000 instead of £160,000). But these failures cleared the way for a more effective form of direct impost, which appeared in the “subsidy” or general tax on land and goods. The first case of this tax (1514) was a modest one—212%; it, however, soon took on a typical form, so that the subsidy came to mean a charge of 4s. in the pound on land and 2s. 8d. in the pound on goods, a scale evidently devised with reference to the older tenth and fifteenth, which was henceforth put in a subordinate position. The subsidy became the established mode of grant under both Tudors and Stuarts, though by degrees it underwent a change similar to that experienced by its predecessor. The taxing statutes made elaborate provisions for the assessment and collection of the tax in order to secure a full return. Old habits proved too strong and the subsidy “slipped into the same kind of groove as that of the fifteenth and tenth, and became, in practice, a grant of a sum of money of about the same amount as the yield of the last preceding subsidy” (Dowell). The consequence was that each subsidy came, in the middle of the 16th century, to be a sum of £100,000, and at its close only £80,000. The parallel vote of the clergy in convocation (which after 1533 had to be confirmed in parliament) amounted to £20,000. The usual parliamentary proceeding was to vote so many “tenths and fifteenths” and so many subsidies, e.g. Elizabeth’s first parliament voted her “two fifteenths and tenths and a subsidy,” or, taking the usual values, £160,000. At times of crisis such as the arrival of the Armada the votes were enlarged by granting more tenths and fifteenths and subsidies. The history of the subsidy is instructive as to the tendencies of direct taxation in all countries. The assessment becomes inelastic and approximates to a fixed sum. As the subsidy follows the course of the later medieval taxation, so it is the undesigned model of the later land and property tax.
In the history of the port duties under the Tudors the first point for notice is the life grant to each of the sovereigns of the subsidies on wool, hides and leather, together with tunnage at 3s. and poundage at 5%; thus, with the hereditary customs, supplying a considerable revenue for the crown’s use. No better indication of the increased power and popularity of the monarchy could be found. The contrast with the suspicious and grudging attitude of the Plantagenet and Lancastrian parliaments is significant of the change in national sentiment. A duty on malmsey (1490) had a retaliatory rather than a fiscal aim, being directed against the Venetians who had imposed restrictions on English trade. In several later cases wine became liable to extra duties, chiefly applied to French trade in further pursuance of the policy of retaliation. Restrictions on import and export as well as the hostile measures against foreign merchants were matters of economic policy rather than finance, but they had the indirect effect of increasing the control exercised at the ports. The loss of Calais (1558) dislocated the system of the staple and cut off one centre of customs revenue; and it was also probably the cause of an important change in the mode of valuing goods for duty. For the declaration on oath of the merchant a fixed valuation was substituted and set forth in a book of rates, the first of its class (1558). Following this reform came more stringent regulations against smuggling and fraud on the part of officials. All through the Tudor period the cost of collection was unduly high. For the first six years of Elizabeth it has been estimated at one-sixth of the gross receipts.
Just as in the 14th century the subsidy had followed the “old” and “new” customs, so in the 16th the “impositions” levied by royal prerogative formed a supplement to the parliamentary subsidy; but the principal employment of this expedient occurs in the next century. Another significant indication of the future course of indirect taxation was furnished by the grants of monopolies to inventors, producers and traders. These privileges, when they affected important commodities, operated in the same way as taxes farmed out to collectors, and, though the profit to the crown was small, they enhanced prices and excited discontent. The wisdom of Elizabeth (or her ministers) was shown in the promise of redress after the hostile debate of 1601.
From one point of view it may fairly be said that the great struggle of the Stuart kings with the parliament centred round financial issues. It is, at all events, beyond dispute that questions of taxation were the chosen ground of conflict. Taking the period from the accession of James I. to the opening of the Civil War (1603–42) it appears that the legal basis of indirect taxation was tested for the port duties in the “Great Case of Impositions” (known as Bates’ case, see Bates, John), while that of direct taxation was considered in the even more famous “Ship Money” case (for ever associated with the name of Hampden). In parliament the debates deal with impositions, monopolies, the grounds for voting subsidies, and the proper application of the funds granted; in fact, with nearly all the financial questions of the time. Notwithstanding these difficulties and disputes the financial system shows evident signs of expansion and adaptation to the needs of the state.
The direct grants of the parliaments of James I. far exceeded those of earlier periods (in 1606 six “fifteenths and tenths,” three lay and four clerical subsidies), but the efforts to extend the other sources of revenue by the exercise of the prerogative naturally reacted on this spirit of liberality. The last “fifteenth and tenth” was voted in 1624, from which date this old-established form disappears, and the subsidy alone is used. In spite of Charles I.’s high-handed policy five subsidies were voted after the Petition of Right had been accepted, and even the Long Parliament made similar grants. Almost at the outbreak of the Civil War it also gave the king a graduated capitation tax. Other modes of direct taxation were used without parliamentary sanction. The collection of the antiquated feudal dues was enforced through the special courts (particularly the Star Chamber) with a rigour long unknown; James had tried the French device of a “tariff of honors.” Both kings employed
