The Urban Tax System in Castile in the Seventeenth Century: The Case of Madrid

Abstract

This paper deals with the history of urban taxation in XVIIth century Castile through an study focused on Madrid. During the XVIIth century the Castilian cities granted many monetary aids (“servicios”) to the Crown (part I). This drove the expansión of urban indebtedness and the introduction of new indirect taxes in most Castilian cities, which exerted an important, although far from overwhelming, influence on the rise of price levels and the simultaneous fall of real wages in Madrid and, presumibly, other Castilian cities (part II). In return for these “servicios”, the Crown transferred Madrid most of the “servicios de millones” levied in the capital and this reduced the capacity of the Royal Treasury to increase its revenues in the long term (part III).