Strengthening the State, 1500 - 1516 (part 4)

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Strengthening the State, 1500 - 1516

Revenue & Taxation:

  • Revenue = crucial to the survival of the crown = essential to fund policies, particularly in war times + maintain the royal court + its officers
  • 1504 = revenue = increased by 30 times the amount collected at beginning of the reign = suggests = system more effective + organised
  • Increased demand for revenue as a result of changing systems in government, costs of war etc. or rising prices could be the explanation
  • Main source of revenue = TAX
  • Most important tax = ALCABALA = 10% sales tax
  • Alcabala = raised by authority of the monarch not the Cortes
  • 1504 = alcabala brought in 284 million maravedis
  • 1516 = brought in 300 million maravedis
  • Catholic monarchs were not solvent despite the fact that revenue overall had doubled since the turn of the century
  • Taxation system = regressive system i.e. the wealthy actually payed less pro rata than the nobility + a desire not to antagonise them
  • Tax farming = weakness; tax collected directly would go more readily into the royal coffers
  • Tax farming provided opportunities for corruption + fraud amongst the collection,meaning that both the crown + the tax payers were worse off
  • Extraordinary income = raised via the Hermandad, Cortes & Church
  • Woodward = tax on the Hermandad was the most reliable of these taxes usually amounting to about 18million maravedis in any one year
  • The income was not always enough for the needs of the crown & other sources had to be found
  • Woodward pinpoints the largest creditors as being aristocrats such as Duke of Cadiz who on occasion loaned money in return for a village
  • Financing large projects was achieved with the help of the Mesta, Genoese merchants & Jewish financiers 
  • 1516 = repaying loans at 10 per cent interest cost 131 million maravedis; 1/3 of ordinary income was being used to pay off the debt
  • Most of the loans came from the nobility; e.g. the Duke of Cadiz loaned 10 million maravedis & was rewarded by being allowed to take a village in Granada for his own property, as a security for the loan
  • 1510 = ordinary revenue from taxation had increased to 320 million maravedis; 90 per cent f this war raised from the alcabala
  • There was a lesser, but still important, increase in extraordinary revenue, largely because of increased efficiency in collection
  • Central records were now being kept & audits of tax collectors were carried out every two years
  • There was no further reforms of the systems & the monarchs were wary of asking for more from powerful landowners
  • Tax farming continued & so, to some extent, did corruption & fraud
  • Finances were in reasonable shape by 1516
  • Despite these various sources of ordinary revenue & taxation, there was no systematic analysis of need & of sources of income
  • If there was a change in circumstances, such as a failure in tax collection or rising military costs, such the 366 million maravedis for the Italian

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