EXCISE', the name of a tax on commodities, from the Latin excises, cut off, as being a portion of the value of the commodity cut off and set apart for the revenue before the commodity is sold. This is not its actual nature, however, for the manufacturer who looks to a profit on his outlay does not give part of the value to the revenue; he merely counts the tax as part of his expenditure, which he intends to get back with a profit, so that it constitutes an addition to the ultimate price which the purchaser or consumer has to pay. A tax on commodities sold and bought is a very obvious one, but it has generally appeared in the simple shape of a toll on goods brought to market; and the complicated arrangements for officially watching the process of a manufacture for the purpose of seeing that none of the dues of the revenue are evaded, is of comparatively modern origin. It was first introduced into England by the long parliament, who estab lished an E. on liquors m 1643. Though always unpopular, the E. in some form or other has ever since continued' to be a material element in the taxation and revenue of Britain.
In the earlier part of last century, sir Robert Walpole entertained the notion of enlarg ing its productiveness while mitigating its proportional pressure, by the bonding system, which suspends the exaction of the duty until the goods are sold, and thus leaves the manufacturer all his capital to be devoted to production. Sec WAREHOUSING SYSTEM. But the rumor of an enlargement of the unpopular E. duty created a general excitement, and the memorable cry of " Liberty, Property, and no Excise," compelled Walpole to abandon his project.
An E., when compared with other taxes, has its good and its bad features: it is a method of extracting money for national purposes from personal expenditure on luxuries, and is especially serviceable when fed from those luxuries the use of which in excess becomes a vice. On the other hand, it renders necessary a system of inquisi torial inspection, not only very offensive to all free people, but very open to abuse and fraud; while at the same time excessively high duties, and duties on commodities strictly of domestic manufacture, lead to smuggling and all its demoralizing consequences. The evils of an E. were formerly aggravated by the practice of farming the duties—that is, by letting them to the highest bidder, whose interest it became, like any other contractor, to make the greatest possible profit by his speculation, and consequently to exact the duties in the most rigorous manner.! In every revenue system, it is of
course only fair to all parties that the duty as the law lays it on should be fully exacted; but iu the age of farming, the arrangements were all slovenly, and there was much latitude of power in the hands of the farmers. The farming system became very oppressive in France, especially in the gabelle or excise on that necessary of life, salt. It is a curious fact, however, that when the farming of the E. was abolished in Scot land by the union, the people grumbled, saying they were easier under the farmers, their own neighbors, who acted on the principle of live and let live," than under the officers sent down from England, who rigidly collected the impost.
Au E. works most easily when it is laid on some commodity banished from domestic production, and created by manufacturers on a large scale. In a great distillery, the excise officer is almost a portion of the establishment, who has an eye on every step of the process, with the view of seeing that the commodity does not get into the market without government obtaining its proper share—sometimes far the greater part—of the market price. The social influence of such an arrangement is very different from that of the old candle and salt duties, which made it the function of the exciseman to pounce on a farmer's family melting the surplus tallow of the last killed sheep, or of a fisher• man boiling sea-water to procure salt for his potatoes. The manufacturer, however, though he has the benefit ',of the bonding system, feels the E. regulations to be a perpetual drag and hindrance in his operations, since there are multitudes of minute operations which he cannot perform without sending special notice to the E. depart ment, or having an officer actually present. This renders it necessary, too, that all the steps of the process should not merely be defined as between the manufacturer and the officer, but should be set forth in an act of parliament: and hence deviations for the purpose of economy, or by way of experiment, become difficult, and sometimes imprac ticable. As difficulties with which the producer has to contend, these things require him to lay on the selling price of the commodity a larger addition, by reason of the E., than the actual amount of the duty.