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ECON 3R03 (26)
Jack Leach (26)
Lecture

Taxation- Spain.doc

3 Pages
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Department
Economics
Course Code
ECON 3R03
Professor
Jack Leach

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Spain ● Constant warfare was hugely expensive ●It would eventually lose its two biggest sources of revenue: the Netherlands and the Indies French property rights did not develop because France had strong and powerful governments. Spain started off in a very strong position. It had control of the Netherlands. Netherlands were the main source of Spanish revenue. The Spanish king didn't owe anyone anything. He was in a strong position. He decided to go to dominate Europe politically and economically. He was also the defender of the pope. Netherlands were a huge source of revenue and he almost lost them, so he fought for it for over 80 years, causing military costs to go up drastically. ●Its third largest source of revenue was a tax on sheep. Major concessions were made to the shepherds' guild to maintain this revenue source – The sheep migrated through the year, moving from one foraging area to another. The shepherds were held not to be responsible when the sheep trampled or ate farmers' crops – Enclosure of communal land was prohibited – Rental fees for grazing were fixed forever at their initial value, despite the fact that Spain was experiencing ongoing inflation (quantity theory of money Sheep were important source of revenue. Spanish recognized the value of sheep, because they could be taxed on. He recognized their value and would give shepherds literally everything ( shepherds were not held responsible for any harm of the farmers, they could cause all the chaos they wanted). The farmer's had no property rights. No one wanted farmers to have enclosure of communal lands (building up of large farms). Essentially, farmers had not property rights. They could not even rent their land. Spanish crisis of inflation was through the roof. (Exportation for gold and silver). Everything harmed farmers in favour or shepherds. – These measures inhibited the growth of agriculture. – When wheat prices rose as a result of these policies, a price ceiling was imposed on wheat Price control was put on wheat – once again, dependency of farmer's on king. ● The Moriscos (descendents of the Moors) were expelled around 1600. They were some of Spain's most capable farmers ● Desperation for revenue also led to the expulsion of the Jews (1492), arbitrary confiscations from almost everybody, massive crown borrowing that created large interest obligations – No effective property rights – Being wealthy in Spain simply made you a target of the government ● 1630: revenues from the New World sharply decline The Spanish expelled the Moriscos ( Muslims) that were really good farmers. Revenue was made from taking things from Jews. Skilled Jews (bankers, doctors and merchants) were removed from Spain, causing Spain a problem If you looked wealthy, you were expropriated. This was not good because people would hid their money and spend it. Some banking families when bankrupt as result of the Spanish's government's failure to repay. The Netherlands ● Small country with few resources ● Grew wealthy by being efficient ● Dukes of Burgandy (1400-1550) play a positive role – Promote internationa
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