Chapter 553: I Know a Thing or Two About Economics
Charbain frowned slightly and asked, "Has the batch of goods we're sending to Le Havre been loaded?"
"Not quite yet," the accountant replied. "Pierre got injured yesterday; otherwise, it would've been done by now."
"And the accounts? Are they ready?"
"Don't worry, sir. Everything is in order."
"Good." Charbain nodded and gave instructions. "In that case, when the tax officials arrive, you take them to check the accounts and try to delay them. Michel and I will help load the goods and sneak out through the back door."
"The back door will probably be guarded by tax officials too."
"That's fine. I'll send an empty wagon to distract them first."
With a wave to the workers in the carriage, Charbain shouted, "Hurry! Help me load the goods!"
Soon, the driver who had just returned from Évreux took an empty wagon out the back door. The tax officials stationed there blew their whistles and rushed after it.
Meanwhile, Charbain directed another wagon loaded with mirrors to discreetly exit and turn into a small alley once the coast was clear.
An hour later, the tax officials left the "Ruby" Mirror Factory empty-handed.
Under France's new "goods tax" system, taxes were collected on the sale of goods. For some items like tobacco, alcohol, and tea, taxes could even be levied twice.
This meant tax officials had to monitor factories and estates closely. The moment goods were shipped, taxes were due. If shipments were missed, manufacturers could easily falsify their accounts, making it nearly impossible to collect the taxes later.
Thus, the relationship between producers and tax collectors became a cat-and-mouse game. In the past, tax farmers had resorted to violent methods like beating workers to extract information about hidden shipments.
By dusk, Charbain's wagon had left the outskirts of Rouen.
Humming a cheerful tune, he smiled as he thought about the eight francs he had saved by slipping past the tax officials. Life was indeed getting better.
Tuileries Palace, Second Floor.
Foulque, head of the Tax Bureau, glanced at Robespierre, let out a sigh, and said:
"Your Highness, I suggest arming tax officials with whips and granting them the authority to shoot in cases of violent tax resistance. Otherwise, next month's tax revenue will likely... fall short of expectations again."
Prince Joseph frowned as he reviewed the January tax report.
The Tax Bureau's first month of operations had yielded only 34 million francs—far short of the expected 41 million francs. Worse, it was even less than the tax farmers' annual contributions.
"So, rampant tax evasion is the main reason for the shortfall?"
"It seems so, Your Highness," Foulque replied.
Stories like Charbain's were widespread across France. The tax officials, inexperienced and restricted from using force, had been outwitted at every turn.
Joseph turned to Foulque. "Do you think stronger enforcement will solve this problem?"
"I believe it would..." Foulque began but was interrupted by Robespierre:
"Your Highness, you are establishing a new tax system that has earned the people's respect and admiration. If we revert to using whips for tax collection, how will we be any different from the tax farmers?"
Foulque shot him a disdainful look. "The difference, Monsieur Inspector, is that the nation's finances won't collapse due to the shamelessness and cunning of commoners. Kindness won't fill the treasury."
"The guns of tax officials should not be aimed at the people, Count. That will only breed resentment and resistance."
Joseph rubbed his temples, frustrated. He had anticipated challenges with the people's compliance but realized he had still underestimated the scale of the problem.
Even with the abolition of exploitative practices and the removal of unreasonable taxes, the people seemed only to grow greedier. Was force the only way to make them pay their dues?
He didn't oppose occasional use of violence. After all, the tax farmers had managed to exceed their targets by hiring thugs who didn't hesitate to use brutality to ensure compliance.
Foulque raised his voice, "Then tell me, Robespierre, what's your brilliant solution for meeting our revenue goals?"
"I'll enhance tax officials' training to improve their effectiveness..."
Joseph quickly intervened to stop the argument and asked Robespierre for specifics.
"Yes, Your Highness," Robespierre replied. "When interrogating tax farmers, I learned they were highly aware of when factories were shipping goods. Unlike our tax officials, they didn't need constant surveillance to ensure they didn't miss a single shipment."
"Surveillance?" Joseph asked, puzzled. "Where exactly?"
"At taxable factories, estates, and shops, of course."
"And how do they monitor them?"
"They patrol nearby, ready to step in and collect taxes anytime."
"...I see."
Joseph finally grasped the cumbersome tax collection process of this era. No wonder evasion was so rampant. Unless tax officials could install surveillance everywhere, people would always find ways to avoid detection.
Alternatively, they could resort to fear tactics like the tax farmers had done, intimidating people into compliance.
Looking at Foulque, Joseph almost approved the suggestion to use stronger enforcement. But then he paused.
Was he being swept along by their heated argument?
Why cling to this outdated system of taxation? There was a much more effective method from the future—one he could implement easily: value-added tax (VAT) paired with the enforcement power of invoices.
Joseph's mind raced as he turned to the two tax leaders.
"What if we devised a way for taxpayers to monitor each other's payments?"
Foulque, an economist, smirked. "With all due respect, Your Highness, that's impossible."
Joseph returned his smile. "I've heard of a tax system where taxes are levied only on the value added at each stage of a product's journey. For example, if a shop buys goods for 10 francs and sells them for 15, we tax the 5-franc difference."
Foulque blinked in confusion. "That doesn't seem particularly effective..."
"Bear with me," Joseph said. "This system would make every merchant document their purchase prices to minimize their tax liability. And how would they prove their purchase prices? By demanding receipts from their suppliers."
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