Impuestos municipales, precios y salarios reales en la Castilla del siglo XVII: El caso de Madrid

Abstract

This essay analyzes the influence of the indirect taxes levied by Madrid on price and wage levels in the Castilian capital and shows that at the end of the seventeenth century indirect taxes raised price levels around 15-20%, reducing real wages to the same measure. The Madrilian case suggests that indirect taxation should have exerted a strong influence in the growing problems of the Castilian cities during the seventeenth century crisis, damaging the competitiveness of the urban industries. The study of Madrid's case leds to the consideration of the close financial relationships between the Crown and its capital city during the Seventeenth Century. The Crown asked Madrid many «donativos», especially after 1653, and to raise the sums raised in such «donativos» Madrid developed its debt, issuing bonds or «censos». To pay the interest of such «censos» the Crown transferred Madrid the control of most part of the «servicios de millones» collected in the city and its fiscal district, but as this was not enough the Royal Treasury also allowed Madrid to create new municipal taxes.