But if we consider, where Monies are raised according to wealth, there they who have made equall gain, have not equall possessions, because that one preserves what he hath got by frugality, another wastes it by luxury, and therefore equally rejoycing in the benefit of Peace, they doe not equally sustaine the Burthens of the Commonweal [civitatis]: and on the other side, where the goods themselves are taxt, there every man, while he spends his private goods, in the very act of consuming them he undiscernably payes [imperceptibiliter persolvit] part due to the Commonweal, according to, not what he hath, but what by the benefit of the Realm he hath had. It is no more to be doubted, but that the former way of commanding monies is against equity, and therefore against the duty of Rulers, the latter is agreeable to reason, and the exercise of their authority.--Hobbes De Cive, XI.XIII
This post is prompted by reading a draft of very fine unpublished paper by Ioannis D. Evrigenis on Hobbes's political economy which reminded me of Hobbes's defense of the consumption tax. This tax is promoted (over one alternative, the income tax) in name of equity. Below I want to return to the question of equity. But before I get to that I want to not two features (in reverse order of importance) about what Hobbes says about the consumption tax as such (which I believe has escaped notice hitherto--I am happy to be corrected).
First, it is a form of payment that can go almost unnoticed when it is folded into the quoted price. Obviously, this is not so in places (i.e., Stateside) where the sales tax is not included in prices quoted. Including the tax in the quoted price, is so a way to exercise authority in a quiet way without constantly calling attention to one's power. It follows that by constantly calling attention to the sales tax, US government(s) is/are actually constantly calling attention to their power. Hobbes rightly notices this is undesirable because it promotes undesirable passions (fear, anger, etc.).
As an aside I have heard two reasons for the US (and I believe Canadian) practice to keep the tax distinct from the quoted price: (i) it's in the interest of shops/sellers to make apparent price low (in order to stimulate desire/demand for the good); (ii) US anti-tax legislators want the public to know how much taxes add to costs of goods. These are both compatible with the further claim that this practice reinforces the visibility of state power.
Second, Hobbes likes the consumption tax because it is proportional payment for benefits received from the polity. These benefits are, of course, heterogeneous. Some of these benefits are clearly economic through the provision of public goods. Hobbes's point is also compatible with the idea that citizens benefit from the state in many non-economic ways (and that the costs of providing those non-economic benefits should be paid by the citizenry). Because the point of consumption (as distinct from, say, investment) is want-satisfaction (in Hobbes that's a quite natural thought because it connects nicely to his account of liberty), and this takes place within, and in certain respects are made possible by, the framework of law and order, taxing consumption is a straightforward way of making people pay for the benefits they receive from living in political society. The more we consume the more we benefit from the state.
So far so good. But now let me turn to the equity claim. one may also say, the more we can consume the more we benefit from the state. Putting it like this points to the fact that when the state protects, say, property it benefits not just present consumption, but also wealth. Now, this raises moral (and political) problems for the equity claim.
Now one can understand wealth (for present purposes, income and inherited income) as future consumption. So, recent defenses of the consumption tax, accept his point. Textbooks teach that taxing life-cycle income is equivalent to taxing consumption.* The problem here is that this equivalence (between taxing income and taxing consumption) does not hold for capital/investments.
So, what the state protects (in say defending property rights) is not just the right to present consumption, and the ability to consume in the future, but also the ability to accumulate capital. Hobbes's claim that the (proportionate) consumption tax is equitable seems correct for the first of these (present consumption, that is want satisfaction). It is not entirely obvious that we benefit equally from the the protection for deferred consumption; citizens who live and work at subsistence level (in Hobbes's day that would have been the vast majority), do not benefit much directly from the state's protection of saving. [This last point already tells you that even leaving aside the question of capital, contemporary models that work with life-cycle income are not entirely apt for or neutral in societies with people that live at subsistence level.] It hard to see how even in such a society the equity claim can really survive scrutiny. Adam Smith famously did not and for that reason thought it equitable to find ways to tax the luxury consumption of the rich (see my book for discussion), although Smith suggests this can be best done through a sales tax, but "toll upon carriages of luxury."
If we understand savings and capital as consumption deferred, Hobbes's point seems tenuous, but still defensible. But the moment we treat capital as a source of accumulation then Hobbes's defense of a consumption tax as equitable strikes me as unconvincing. While one can argue that everybody benefits from the escape from the state of nature, the rich really benefit disproportionately from the state's protection when they are allowed to accumulate.
As noted above, Hobbes's argument in defense of the consumption tax does not reduce to equity. Quiet, non-invasive forms of taxation promote political stability (as opposed to many other forms of taxation). So, from a Hobbesian perspective that may eave ample even decisive room to defend the consumption tax.
*Evrigenis calls attention to this in his paper. (I use a different text book than he does.)