EXCISE, a term of obvious Latin derivation, now well-known in public finance, signifying a duty charged on home goods, either in the process of their manufacture or before their sale to the home consumers. This form of taxation implies a commonwealth somewhat advanced in manufac-tures, markets, and general riches ; and it interferes so directly with the industry and liberty of the subject that it has seldom been introduced save in some supreme financial exigency, and has as seldom been borne, even after long usage, with less than the ordinary impatience of taxation. Yet excise duties can boast a respectable antiquity, having a distinct parallel in the vectigal reruni venalium (or toll levied on all commodities sold by auction or in public market) of the Romans. But the Roman excise was mild compared with that of modern nations, having never been more than centesima, or one per cent., of the value ; and it was much shorter-lived than the modern examples, having been first imposed by Augustus, reduced for a time one-half by Tiberius, and finally abolished by Caligula, 38 A.D., so that the Roman excise cannot have had a duration of much more than half a century. Its remission must have been deemed a great boon in the marts of Rome, since it was commemorated by the issue of small brass coins with the legend Remissis Centesimis, specimens of which are still to be found in collections.
The history of this branch of revenue in the United Kingdom dates from the period of the civil wars, when the republican Government, following the example of Holland, established, as a means of defraying the heavy expenditure of the time, various duties of excise, which the Royalists when restored to power found too convenient or necessary to be abandoned, notwithstanding their Roundhead origin and general unpopularity. On the contrary, they were destined to be steadily increased both in number and in amount. It is curious that the first commodities selected for excise were those to which this branch of taxa-tion, after great extension, has again in the age of reform and free trade been in a manner permanently reduced, viz., malt liquors, and such kindred beverages as cider, perry, and spruce beer. The other excise duties remaining are chiefly in the form of licences, such as to kill game and to use and carry guns, to sell gold and silver plate, to pursue the business of appraisers or auctioneers, hawkers or pedlars, pawnbrokers, or patent-medicine vendors, to manu-facture tobacco or snuff, to deal in sweets or in foreign wines, to make vinegar, to roast malt, or to use a still in chemistry or otherwise. It may be presumed that the policy of the licence duties is not so much to collect revenue, though in the aggregate they yield a large sum, as to guard the main sources of excise, and to place certain classes of dealers, by registration and an annual payment to the exchequer, under a direct legal responsibility. The excise system of the United Kingdom as now pruned and reformed, however, while still the most prolific of all the sources of revenue, is simple in process, and is contentedly borne as compared with what was the case in the last and the beginning of the present century. The wars with Bonaparte strained the Government resources to the utter-most, and excise duties were multiplied and increased in every practicable form. Bricks, candles, calico prints, glass, hides and skins, leather, paper, salt, soap, and other commodities of home manufacture and consumption were placed, with their respective industries, under excise sur-veillance and fine. When the duties could no longer be increased in number, they were raised in rate. The duty on British spirits, which had begun at a few pence per gallon in 1660, rose step by step to lis. 8^d. per gallon in 1820 ; and the duty on salt was augmented to three or fourfold its value.
The old unpopularity of excise, though now somewhat out of date, must have had real enough grounds. It breaks out in all our literature, from songs and pasquinades to grave political essays and legal commentaries. Black-stone, in quoting the declaration of parliament in 1649' that " excise is the most easy and indifferent levy that can be laid upon the people," adds on his own authority that " from its first original to the present time its very name has been odious to the people of England " (book i. cap. 8, tenth edition, 1786); while the definition of " excise " gravely inserted by Dr Johnson in the Dictionary, at the imminent risk of subjecting the eminent author to a prose-cution for libelviz., "a hateful tax levied upon commo-dities, and adjudged not by the common judges of property, but wretches hired by those to whom excise is paid "can hardly be ever forgotten. The levy of excise has more than the disagreeableness of other direct taxation, and though not more inquisitorial than income tax, establishes an espionage and control over premises and processes of manufacture which are much more offensive as well as sometimes injurious. The caustic feeling of last century points directly enough to much rough and arbitrary administration, which it was possible gradually to correct and mitigate.
But what may be deemed the permanent defect of excise is that it is apt to increase the cost of commodities to consumers far more than the amount of duty levied for the revenue. This has been found on the abolition of excise, whether on bricks, calicoes, leather, paper, or other articles of manufacture. The cheapening effect might not be very immediate or apparent, because the duty when abolished might bear only a very fractional proportion to the natural value of the goods; but under the greater freedom of production have arisen more invention, more skilful and varied appliances, and consequently more economy to con-sumers, and more expansion of the several industries, than could have been attained under the fiscal restrictions. The inexpediency, even for revenue purposes, of fining and fettering a great number of the ~">ost useful and necessary home industries by this kind of impost would seem to be abundantly demonstrated by the fact that the excise revenue of the United Kingdom, while being reduced always within narrower compass, has not suffered eventually in its actual produce to the state. The revenue from excise has never been greater, or much greater, than it is at present. The gross receipts from excise in 1820 were £27,955,810.
In the year ended 31st March 1866, when the larger number of the duties had been abolished, the net revenue from excise was £18,332,868; and in the year ended same date 1877, when excise for some years had been almost wholly confined to British spirits and malt liquors, the net revenue was £27,681,523. The following are the general items of the excise revenue in the latter year :
Spirits, home made 14,873,165
Sugar, used in brewing 487,763
So large a revenue from so few sources indicates high duties, and the excise on spirits in particular has been maintained during many years at a rate that would have astonished the people of last century, and yet without any of the evils incident to heavy fiscal exaction. There is a check, which has been often exemplified, to the increase of the rate of excise in the encouragement it gives to illicit manufacture, and the consequent defeat of its object, viz., increase of revenue. The high rates of 1 Is. 8 jd. per gallon in England, 6s. 2d. in Scotland, and 5s. 7d. in Ireland, to which the excise on home-made spirits was increased at the close of the great wars, gave rise to so much evasion that " more than one-half of the spirits actually consumed in Scotland and Ireland," as we learn from an official source, " were supplied by the smuggler." The duties were reduced to 7s. per gallon in England, and to 2s. 4§d. in both the other countries. " The result of these changes was a most surprising increase of legally made spirits. In 1820 the quantity made in the United Kingdom, and retained for home consumption, was 9,600,000 gallons. In 1826 "two years after the change of duties" it was 18,200,000" (First Report of Commissioners of Inland Revenue, 1857). At subsequent periods, when the duties were again moderately increased, it was found that there was a sharp limit to the process, and that the excise on spirits could not be advanced much beyond 3s. 4d. in Scotland and Ireland without a revival of the old evils and a decline of revenue; while in England more than 7s. encouraged adulteration, and much higher prices than were justified by the duty and other trade charges. Later experience shows that this check is elastic. Since 1860 the excise on home-made spirits has been 10s. per gallon uniformly in the three kingdoms, and yet in no previous period have there been fewer complaints of smuggling or illicit distillation. This result is ascribable to various causes. The increase of employment, higher wages for legitimate labour, the opening of all parts of the country by means of communication, the greater sway of the law, and the greater influence of habits of order, must have discouraged the dark though tempting business of smuggling quite as much or more than the enormously high excise encouraged it. The excise service itself has also been much improved, and by simple mechanical provisions in the dis-tilleries much less supervision of officers is requisite, with greater security against fraud than in former times. The exemption from duty of methylated spirit, used extensively in " French polishing " and many other arts, has likewise had a beneficial effect in stamping out illicit distillation. The spirit of wine, or pure alcohol of the druggists, how-ever, is still almost necessarily subject to duty, though it were certainly desirable that in tinctures and other medicaments incapable of being abused as potable liquors, it should be free of tax. But permission to prepare tinctures in bond, in quantities of not less than nine gallons, has not as yet been taken advantage of to any extent. In the export of spirit of wine a rebate of duty is allowed.
The duty on malt, like that on spirits, has also for some years been uniform in the United Kingdom, at the rate of 2s. 7Jd. per bushel, with a further duty on brewers of 12s. 6d. for every 12J quarters mashed, or, what is held equivalent, every 50 barrels of 36 gallons brewed. The duty on each gallon of ale is thus barely one and seven-eighths of a pennya very lenient excise compared with the 10s. per gallon on spirits. It might be supposed that when the duty on spirits in Scotland and Ireland was made as high as in England, a certain equality should have been established in the incidence of taxation on the liquors most generally used in the several countries. But the legislature has favoured the milder fermented liquors with the view of promoting temperance in all parts of the kingdom, irrespec-tive of taste, habit, or climate. How far this good intention has been realized is a question aside from these explana-tory remarks on excise. It has only to be observed that while the consumption of brewed liquors has been increas-ing in Scotland, the consumption of distilled spirits in England has been increasing in a still greater proportion. The following are the official returns of spirits and malt charged with duty in the three kingdoms in 1867 and 1876 :
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The abolition of many of the old excise duties, and consequent simplification of the department, prepared the way for an administrative reform, by which the three revenue branches of excise, stamps, and taxes were placed under the superintendence of one board of commissioners, and included in the general description of inland revenue. This
was accomplished in 1848, and the board of excise left its old head quarters in Gresham House and was merged in the new body in Somerset House, by which the collection and management of the whole inland revenue has Since been directed. The provisions for the consolidation and guidance of the board of inland revenue are embodied in the Act 12 Vict. cap. 1. The numerous statutes of excise, well annotated, have been collected and published under the authority of the commissioners of inland revenue, in one volume (1873). (B. SO.)