This chapter focuses on Dutch fiscal policy. The Dutch Republic was unique in it heavy taxation of bread. This tax took the form of an excise on the milling of grain. Consequently both milling and baking became subject to strict regulation in order to minimize tax evasion. The tax was raised over time to become the largest single source of revenue for the state. The milling excise is examined from the perspective of optimal tax theory. Consumer demand for bread, especially more costly types of bread, was such as to allow this tax to approximate an optimal tax. Enforcement in rural areas proved difficult, leading to a reform of the milling excise in the countryside that substantially increased revenue.