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RE: [LandCafe] RE: Salt tax

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  • dilip.joshi
    Dave, Interesting item on salt tax. As you are probably aware Mahatma Gandhi marched against salt taxes which were the largest non violent protest against the
    Message 1 of 3 , Sep 23, 2004
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      Interesting item on salt tax. As you are probably aware Mahatma Gandhi
      marched against salt taxes which were the largest non violent protest
      against the Empire and obviously huge publicity was generated. These
      marches inspired many a generation of non violent peaceful movements
      throughout the world.

      -----Original Message-----
      From: Wetzel Dave [mailto:davewetzel@...]
      Sent: 20 September 2004 13:00
      To: 'G W Gardiner'; Gang8
      Cc: 'Land Café ( lc1) '
      Subject: [LandCafe] RE: Salt tax

      Many thanks for this thought-provoking item, Geoffrey.
      The mistake was to tax the salt and not the rental value of the salt
      It's the difference between LVT and vat or General sales tax!
      I've circulated this interesting item to the Land Café.

      Dave Wetzel;

      -----Original Message-----
      From: G W Gardiner [mailto:geoffrey.gardiner@...]
      Sent: 20 September 2004 10:59
      To: Gang8
      Cc: Wetzel Dave
      Subject: Salt tax

      040920 Gardiner to Gang, copy to Dave.

      Salt tax

      The Salt Museum at Northwich in Cheshire publishes a four page summary
      the history of the taxation of salt. It is a fascinating document as it
      shows the practical problems with taxing natural resources. It helps one
      assess the validity of some Georgist claims.

      Salt was a popular thing to tax in ancient times, as it is essential to
      human life. We all have about a cupful in our bodies and the liquid
      belt of the human body is a saline solution. It was also vital for the
      preservation of food. The most notorious salt tax was the French
      Not only was salt a Royal (aka State) monopoly, but every person was
      compelled to buy salt whether they needed it or not. One can scarcely
      imagine a more regressive tax, and it helped precipitate the French
      Revolution. The British in India operated a salt monopoly, inherited
      native rulers, and Gandhi led a campaign for its abolition.

      The first references to taxes on salt in Britain are in the Domesday
      Book of
      1086. The tolls on salt from the three "wiches" of Nantwich, Northwich
      Middlewich were paid to the King or the Earl of Chester. The latter
      title is
      now a royal title, but I do not know if that has always been so. The
      of the Museum's leaflet does not comment on that and perhaps is unaware
      the connection. During the Tudor period the Crown granted patents to
      individuals which conferred a monopoly. The justification for this is
      to have been that with high prices the monopolist could cover the
      costs of development better, but the historians seem to think this was
      eyewash and the monopolies were just a way of getting the maximum
      for the state.

      In the 1640s the question of excise duties became a big issue. In 1641
      Parliament condemned excise duties as contrary to natural justice but in
      1643 imposed them, and included salt. The opposition to salt taxes was
      strong that at the restoration, Charles II was not granted the right to
      salt. Salt tax was imposed from 1693 till 1825, with exemption for fish

      The eventual abolition of the salt tax was I understand because the tax
      inhibiting the growth of the chemical industry, but it took a long time
      the government to see sense. Sodium carbonate was needed for the glass
      industry and for soap making. The alkali was for long obtained by
      kelp, but in the 1770s some of the "Lunar Men" of Birmingham (Keir in
      particular) worked out a method of making it from salt. But so long as
      salt tax remained the process was uneconomic. The Lunar Men sought
      from the tax but met a refusal. The American Revolution interrupted
      supplies of alkali and a plant to make alkali and soap was set up at
      in Staffordshire. But the era of cheap soap and the resultant enormous
      improvement in life expectancy which that brought had to wait another
      generation at least.

      However desirable taxes on natural resources may be, their imposition is
      fraught with difficulties, both political and technical. Georgists seem
      to care about these difficulties.

      Currently Britain uses about four million tons of rock salt a year for
      purpose of keeping the roads ice free. Colder countries can switch to
      studded tyres for the coldest months, but in Britain there are no months
      which are consistently cold, so the system we use is to salt and grit
      roads whenever frost is forecast. Revenue raising and road safety are
      therefore at odds with one another. Whether the salt-mining industry is
      paying an extraction tax, I do not know. I suspect its main threat comes
      from the "carbon tax," which could raise the cost of soap to the point
      production would be cheaper abroad. This tax also affects the detergent
      industry which uses another raw material extracted from the earth.


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