The period of the Lancastrian kings, extending over two-thirds of the 15th century (1399-1471), is noticeable for various experiments in the system of direct taxation. The standard tax--"the tenth and fifteenth"--failed to suit the changed conditions. In consequence of the decay of some of the towns allowances had to be made to them, amounting to over 15% (£6000), which, with other deductions, lowered the yield from a "tenth and fifteenth" to £31,000. As a supplement a land tax, affecting only the large owners, was voted at the rate of 5% in 1404, and repeated with wider scope, but at the lower rate of 1-2/3%, in 1411. A house tax made its appearance in 1428. Taxes on knight's fees and other freeholds were also tried, while in 1435 and 1450 the graduated income tax was employed. The minimum rate, 2½%, applied to incomes under £100 (or under £20 in the tax of 1450), and rose to 10% on the higher incomes. These devices are evidence of the demand for larger revenue, and also of the increasing unfitness of the existing direct taxation. It may be added that they indicate a disposition to adopt foreign models, particularly the methods of taxation in use in France and Italy. As to indirect taxation the receipts seem at first to have declined, and the subsidies were only granted for fixed terms (the victory of Agincourt gained a life grant to Henry V.). After the establishment of Edward IV. on the throne, the idea of a "tenth," in the literal sense, was taken up and voted (1472) by the two houses as a special military provision; but it failed to bring in the required revenue, and the king had to fall back on grants of the old-established form. Extra taxes on aliens were levied under both Lancastrian and Yorkist rulers with little profit. The most original contribution of Edward IV. to fiscal policy was the "benevolence" (q.v.) or payment by wealthy subjects of sums requested by the king. Voluntary in form, these payments were, in fact, compulsory, and became in later times one of the great grievances against which parliament had to struggle.
Broader issues in finance marked the course of the Tudor period, and these were connected with the general history of the time. The era of national monarchies had arrived, necessitating the maintenance of greater military and naval forces, as well as more costly machinery of administration. External policy was affected by the set of ideas that developed into mercantilism (see MERCANTILE SYSTEM); but so also was fiscal policy. Finance reflected the actions of the personal rule that was the characteristic of the 16th century. Within the period, however, some decided contrasts are to be found. Prudence, carried to parsimony with Henry VII., is followed by lavish prodigality in the case of Henry VIII. Elizabeth, again, presents in her reign a very different financial policy from that of either her father or her grandfather. The desire for a vigorous foreign policy, the hope of encouraging native industry, and the sentiment of retaliation against the trade regulations of other countries are found to interfere with the aim--strictly followed in earlier times--of obtaining the largest possible yield. All the different parts of the public economy were regarded as existing only in order to be utilized for the furtherance of national power. It is this more complex character in policy, coupled with the new influences, that the discovery of America, the Renaissance and the Reformation brought into operation, which gives special interest to the financial problems of the 16th century.