This article deals with the relations between taxation and prices levels in seventeenth century Castile through an analysis of the influence of royal and municipal taxes on the retail prices of cheap wine in Madrid between 1606 and 1700. First part describes the taxes levied on cheap wine by the Castilian Crown and the town council in Madrid. Both kinds of taxes provided the Royal and the City Treasuries with the most important part of their tax revenues. Second part analyzes how the Royal and the city authorities estimated the monetary value of the taxes and excises levied on this beverage. Lastly, third part shows that the burden of the royal and municipal taxes levied on a litre of cheap wine rose during the period. If in 1606-10 both types of taxes amounted to around 30 per cent of the retail prices of a litre of cheap wine, in the last third of the century this percentage had risen to 60-65 per cent.
