Monarch Finance Flashcards
Theory for the monarch finance
The monarch’s supposed to be financially independent with two sources of income:
- Ordinary revenue = granted via the rents and sales of land.
- Extraordinary revenue = granted via tax by parli for the monarch’s special needs, often in times of war.
Issue with monarch and finance
- Constant tension between income and expenditure = despite considerable income boosts, there was rarely enough money and often relied on tax.
- Extravagant expenditure - spent £100,000+ in building at Hampton Court and Whitehall and running the Royal Household cost £75,000 a year.
- Long tax periods could lead to dangerous unrest, especially as poor regions (the West + North) struggled to meet the demands, especially when these conceded with periods of socio-economic hardship brought by poor harvests of disease (revolts of 1489, 1497 and Pilgrimage of Grace).
Taxation before 1513:
Fifteenths and tenths
- Finance was only granted by Parliament; typically in times of emergency (war or invasion).
- Based on property (‘movables’), including land and other possessions.
- Since 1534, the local community would pay a fixed amount with an expected yield of £29.5K.
- Boroughs paid the equivalent to 1/10 and countryside paid the equivalent to 1/15.
Taxation before 1513
Outdated system
- Paid tax levels of 150 years prior with no account of population or socio-economic changes.
- Fixed rate tax - price inflation meant the amount didn’t meet expenditure needs.
- Not enough income generated.
How was the outdated system of tax before 1513 unfair?
- Community paid rather than the individual according to personal wealth. So, the wealthy could avoid paying their share and it caused the burden of tax to fall more harshly on the poor.
- Urban paid more than countryside = issue is that towns suffered from depopulation while there was increasing wealth generation in the countryside via the growth of the wool and cloth trade.
Henry VII’s continuation to use the fifteenths and tenths system and his decision to experiment
- Granted tax in 1487, 1489-90, 1492 and 1497 - not as much income generated.
- Experimented by asking Parli for 2/10ths and 2/15ths and it agreed to a new tax to assess the individual’s wealth and ability to pay (direct assessment).
- Successful and it was repeated in 1504, raising an additional £80,000 and paved the way for more innovation under Thomas Wolsey.
1513 Subsidy
- Created by Wolsey - lasting achievement as it was used by the next Tudor monarchs.
- Done to go to war with France, but a costly decision for a small nation.
Key features of the 1513 subsidy
- Flexible = individual assessed on their income from different possible sources of wealth and based on the individual’s ability to pay and they only had to pay tax on one category, their most wealthiest one.
- Separate assessment for the nobility = based on their rank, the higher the more tax.
- Appointed local officials per county to assess under oath the person’s wealth = typically drawn often from the JPs as they were most respected men in local society, who were then monitored by national commissioners who could change assessments.
Strengths of the 1513 Subsidy under Henry VIII’s reign
- Reduced resentment caused the traditional system, ensuring a increased contribution from the wealthy to taxation, rather than the poorest.
- Successful that it was repeated (1514, 1515 and 1523) and became the main tax method = raised £320,099 compared to the old system £117,936 (1512-17).
- Cromwell further developed the collection of subsidies, asking Parli in 1534 for a subsidy to fund the govt in peace = accepted but did cause rumours and fears of further innovations which fed the Northern Earls’ fears.
Limitations of the 1513 Subsidy under Henry VIII
- Wolsey struggled raising subsidies, due to the war demands placed on economy (1512-29) - Parli grew reluctant as the demands increased but had nothing to show for it.
- Forced to negotiate for a lower sum of £900K but the payment instalments were also late - upset taxpayers and parliament.
- To cover govt costs in 1923, Wolsey raised a non-parli tax (Amicable Grant) which provoked mass resistance in East Anglia of 10K - forced to cancel the grant, though not the collection of the susbidy.
Effectivness of the 1513 subsidy under Elizabeth
- At the start of her reign, Parliament regularly granted subsidies in peacetime which yielded £140, 000.
- However, it grew unsustainable, yielding £80, 000 near the end of her reign - helped develop new methods but it wasn’t efficient because the Crown faced resistance from parli and taxpayers.
Problems caused by Elizabeth’s caution and desire for political stability because of the 1513 subsidy
Stagnation of assessment:
- Didn’t use Wolseys’ flexible approach of new assessments of wealth with each subsidy.
- Permitted fixed tax rates but didn’t account inflation = received less money.
Increasingly corrupt system:
- After 1563, each taxpayer’s wealth assessment was accepted as accurate, not required to take an oath.
- Decline allowed some of the most wealthy to avoid taxation
- Outdated tax records didn’t account for the new taxpayers and those who died, E.G Suffolk (1523 - 17,000 compared to 1556 - 7,700).
No response to claims yet asked for more subsidies:
- Contributed to the political tensions of the 1590s and it forced to exploit the royal prerogative to fund wars.
- BUT no similar threat of rebellion like Henry VII, suggesting that the country was better managed, mainly due to increased control of localities.
