Monday, April 15, 2024

A Brief History of Taxes

It's that day again. Yes, even though the deadline for filing taxes traditionally comes on April 15th, it has been pushed back because this date has fallen on weekends and holidays over the past couple of years or so. So it was this year, as well, as it fell on April 17th, which happens to be today.

I posted this particular entry a couple of years ago, back in 2013.

However, given the significance of this day as the deadline to file taxes (in the United States), it seemed particularly appropriate to publish it once again.

Here, in brief, is a history of taxes, originally published two years ago here:



$$$$$$$$$$$$$


So, today is the day. The infamous tax deadline. April 15th. A day that most people seem to dread.

If you are an American, and have not filed your taxes by now, then what the hell are you reading this for? Go file your taxes online, go to the post office and after completing the forms and send it off, or pay a visit to your local accountant. if you have to wait for any of these things because they are overcrowded, then you hopefully will learn from this, and make sure to do them earlier next year!

Not that I am one to talk, necessarily. I just finished filing my taxes this past Friday, the 12th of April. That hardly left any wiggle room. But this was done because, well, I owe money. Quite a bit of money, as it turns out. So, why hurry to file taxes when it's going to be like that? What's the incentive? If there was some kind of discount that I knew about, or some kind of reward, then okay. Why not? But when there is not, then let them wait. So long as it gets done on time, then so be it.

I think next year, I will do much more work on my taxes earlier, get it to the point (hopefully) of almost completing it, and then file it within that final week before the deadline.

The thing is, some years ago, when I used to get money back (sometimes fairly substantial amounts, too!), I would try to get it done early. But when you owe, somehow the motivation to do it early seems to wither away, and taxes become merely a pain in one's ass. Not that they are fun to do ever, even when you are owed money. But when you are getting money back, it becomes a job, almost like anything else. You plow through it, do what you need to do, and get it done, so you can get paid, right?

But when you owe? Fuggeddabouddit!

Still, I wanted to use this day for something that could be more positive (at least I hope). I was listening to Little Steven's Underground Garage earlier, and he shared a brief history of taxes throughout history. And just like that, a lightbulb went off in my head - ding!

I thought to myself, "Now, why don't I do a history of taxes on the blog?"

So, here it is. A lot of information on taxes, although most of it is directly from the source, with little to no narration from my end. The links are attached to each, to show the source from which I got these. Many of these are interesting, and they are all informative. Enjoy!


These first three (all in green) are histories of taxation around the world, from three different sources. The links to the webpages where they can be found are in blue.



TAX HISTORY CHRONOLOGY

EGYPT
During the various reins of the Egyptian Pharaohs tax collectors were known as scribes. During one period the scribes imposed a tax on cooking oil. To insure that citizens were not avoiding the cooking oil tax scribes would audit households to insure that appropriate amounts of cooking oil were consumed and that citizens were not using leavings generated by other cooking processes as a substitute for the taxed oil.
GREECE1
In times of war the Athenians imposed a tax referred to as eisphora. No one was exempt from the tax which was used to pay for special wartime expenditures. The Greeks are one of the few societies that were able to rescind the tax once the emergency was over. When additional resources were gained by the war effort the resources were used to refund the tax.
Athenians imposed a monthly poll tax on foreigners, people who did not have both an Athenian Mother and Father, of one drachma for men and a half drachma for women. The tax was referred to as metoikion
ROMAN EMPIRE
The earliest taxes in Rome were customs duties on imports and exports called portoria.1
Caesar Augustus was consider by many to be the most brilliant tax strategist of the Roman Empire. During his reign as "First Citizen" the publicani were virtually eliminated as tax collectors for the central government. During this period cities were given the responsibility for collecting taxes. Caesar Augustus instituted an inheritance tax to provide retirement funds for the military. The tax was 5 percent on all inheritances except gifts to children and spouses. The English and Dutch referred to the inheritance tax of Augustus in developing their own inheritance taxes.
During the time of Julius Caesar a 1 percent sales tax was imposed. During the time of Caesar Augustus the sales tax was 4 percent for slaves and 1 percent for everything else.1
Saint Matthew was a publican (tax collector) from Capernaum during Caesar Augustus reign. He was not of the old publicani but hired by the local government to collect taxes.
In 60 A.D. Boadicea, queen of East Anglia led a revolt that can be attributed to corrupt tax collectors in the British Isles. Her revolt allegedly killed all Roman soldiers within 100 miles; seized London; and it is said that over 80,000 people were killed during the revolt. The Queen was able to raise an army of 230,000. The revolt was crushed by Emperor Nero and resulted in the appointment of new administrators for the British Isles.1
GREAT BRITAIN
The first tax assessed in England was during occupation by the Roman Empire.

Lady Godiva
Lady Godiva was an Anglo-Saxon woman who lived in England during the 11th century. According to legend, Lady Godiva's husband Leofric, Earl of Mercia, promised to reduce the high taxes he levied on the residents of Coventry when she agreed to ride naked through the streets of the town.

When Rome fell, the Saxon kings imposed taxes, referred to as Danegeld, on land and property. The kings also imposed substantial customs duties.
The 100 years War (the conflict between England and France) began in 1337 and ended in 1453. One of the key factors that renewed fighting in 1369 was the rebellion of the nobles of Aquitaine over the oppressive tax policies of Edward, The Black Prince.
Taxes during 14th century were very progressive; The 1377 Poll tax noted that the tax on the Duke of Lancaster was 520 times the tax on the common peasant.
Under the earliest taxing schemes an income tax was imposed on the wealthy, office holders, and the clergy. A tax on movable property was imposed on merchants. The poor paid little or no taxes.
Charles I was ultimately charged with treason and beheaded. However, his problems with Parliament came about because of a disagreement in 1629 about the rights of taxation afforded the King and the rights of taxation afforded the Parliament.
The King's Writ stated that individuals should be taxed according to status and means. Hence the idea of a progressive tax on those with the ability to pay was developed very early.
Other prominent taxes imposed during this period were taxes on land and various excise taxes. To pay for the army commanded by Oliver Cromwell, Parliament, in 1643, imposed excise taxes on essential commodities (grain, meat, etc.). The taxes imposed by Parliament extracted even more funds than taxes imposed by Charles I, especially from the poor. The excise tax was very regressive, increasing the tax on the poor so much that the Smithfield riots occurred in 1647. The riots occurred because the new taxes lowered rural laborers ability to buy wheat to the point where a family of four would starve. In addition to the excise tax, the common lands used for hunting by the peasant class were enclosed and peasant hunting was banned (hooray for Robin Hood).
A precursor to the modern income tax we know today was invented by the British in 1800 to finance their engagement in the war with Napoleon. The tax was repealed in 1816 and opponents of the tax, who thought it should only be used to finance wars, wanted all records of the tax destroyed along with its repeal. Records were publicly burned by the Chancellor of the Exchequer but copies were retained in the basement of the tax court.4
COLONIAL AMERICA

Colonists were paying taxes under the Molasses Act which was modified in 1764 to include import duties on foreign molasses, sugar, wine and other commodities. The new act was known as the Sugar Act.Because the Sugar Act did not raise substantial revenue amounts, the Stamp Act was added in 1765. The Stamp Act imposed a direct tax on all newspapers printed in the colonies and most commercial and legal documents.
POST-REVOLUTION AMERICA

In 1794 Settlers west of the Alleghenies, in opposition to Alexander Hamilton's excise tax of 1791, started what is now known as the "Whiskey Rebellion" The excise tax was considered discriminatory and the settlers rioted against the tax collectors . President Washington eventually sent troops to quell the riots. Although two settlers were eventually convicted of treason, the President granted each a pardon.
In 1798 Congress enacted the Federal Property Tax to pay for the expansion of the Army and Navy in the event of possible war with France. In the same year, John Fries began what is referred to as the "Fries Rebellion," in opposition to the new tax. No one was injured or killed in the insurrection and Fries was arrested for treason but eventually pardoned by President Adams in 1800. Surprisingly, Fries was the leader of a militia unit called out to suppress the "Whiskey Rebellion."2
The first income tax suggested in the United States was during the War of 1812. The tax was based on the British Tax Act of 1798 and applied progressive rates to income. The rates were .08% on income above £60 and 10 percent on income above £200. The tax was developed in 1814 but was never imposed because the treaty of Ghent was signed in 1815 ending hostilities and the need for additional revenue.
The Tax Act of 1861 proposed that "there shall be levied, collected, and paid, upon annual income of every person residing in the U.S. whether derived from any kind of property, or from any professional trade, employment, or vocation carried on in the United States or elsewhere, or from any source whatever.
The 1861 Tax Act was passed but never put in force. Rates under the Act were 3% on income above $800 and 5% on income of individuals living outside the U.S.
The Tax Act of 1862 was passed and signed by President Lincoln July 1 1862. The rates were 3% on income above $600 and 5% on income above $10,000. The rent or rental value of your home could be deducted from income in determining the tax liability. The Commissioner of Revenue stated "The people of this country have accepted it with cheerfulness, to meet a temporary exigency, and it has excited no serious complaint in its administration." This acceptance was primarily due to the need for revenue to finance the Civil War.
Although the people cheerfully accepted the tax, compliance was not high. Figures released after the Civil War indicated that 276,661 people actually filed tax returns in 1870 (the year of the highest returns filed) when the country's population was approximately 38 million.
The Tax Act of 1864 was passed to raise additional revenue to support the Civil War.
Senator Garret Davis, in discussing the guiding principle of taxation, stated "a recognition of the idea that taxes shall be paid according to the abilities of a person to pay."
Taxes rates for the Tax Act of 1864 were 5% for income between $600 and $5000; 7.5% for income between $5001 and $10,000; 10% on income above $10,000. The deduction for rent or rental value was limited to $200. A deduction for repairs was allowed.
With the end of the Civil War the public's accepted cheerfulness with regard to taxation waned. The Tax Act of 1864 was modified after the war. The rates were changed to a flat 5 percent with the exemption amount raised to $1,000. Several attempts to make the tax permanent were tried but by 1869 " no businessman could pass the day without suffering from those burdens" The Times. From 1870 to 1872 the rate was a flat 2.5 percent and the exemption amount was raised to $2,000.
The tax was repealed in 1872 and in its place was installed significant tariff restrictions that served as the major revenue source for the United States until 1913. In 1913 the 16th Amendment was passed, which allowed Congress authority to tax the citizenry on income from whatever source derived.
It should be noted that the Tax Act of 1864 was challenged several times. The Supreme Court unanimously supported the tax. After the war the tax was declared unconstitutional by the same court because it represented direct taxation on the citizenry which was not allowed under the constitution.
1930's
During the 1930's federal individual income taxes were never more than 1.4 percent of GNP. Corporate taxes were never more than 1.6 percent of GNP. In 1990 those same taxes as a percent of GNP were 8.77 and 1.99 respectively.3
Social Security Tax Changes
Here is some interesting information about the changes in the FICA taxes since 1937. Thanks to Harold Eyer for pointing out this site.

This site is sponsored by the Tax Analysts group. The selections include "The Price of Civilization" which provides pictures and documents of tax policy during significant years of our history and "Presidential Tax Returns". A recommended site.





New Internationalist Magazine

A short history of TAXATION


ISSUE 416
Published on October 1, 2008


Beards, boots, beehives, candles, nuts, hats, horses, chimneys, water – Tsar Peter taxed them all. But he is still styled ‘The Great’ in modern histories of Russia, perhaps because of the mighty works his taxes produced. This is the eternal fate of taxation: to be the abused or abusive means towards noble or ignoble ends, never quite able to escape its association with extortion and war.



In the beginning



The word ‘tax’ first appeared in the English language only in the 14th century. It derives from the Latin taxare which means ‘to assess’. Before that, English used the related word ‘task’, derived from Old French. For a while, ‘task’ and ‘tax’ were both in common use, the first requiring labour, the second money. ‘Tax’ then developed its meaning to imply something wearisome or challenging. So words like ‘duty’ were used to suggest a more appealing purpose. Political spin has just as long a history as taxation, and neither has been detained unduly by the meaning of words.



The written record



China has one of the longest of all written records, and we know that taxes were levied here some 3,000 years ago as the Empire was being established. Powers (usually military) that were able to impose taxes created the first bureaucracies to collect and administer them. Under the Egyptian Pharaohs ‘scribes’ were charged with raising funds in any way practicable, including a tax on household cooking oil. Regular audits were conducted to ensure that oil was not recycled – perhaps the first historical record of ‘avoidance’. The ‘Book of Genesis’ in The Bible suggests that a fifth of all crops should be given to the Pharaoh. The city states of Ancient Greece imposed eishpora to pay for wars, which were numerous; but once a war was over any surplus had to be refunded. Athens imposed a monthly poll tax on foreigners. Imperial Rome used tribute extracted from colonized peoples to multiply the bounty of empire. Julius Caesar imposed a one-per-cent sales tax; Augustus instituted an inheritance tax to provide retirement funds for the military. However, human bondage remained the most lucrative form of tribute for both Greece and Rome.



The price of faith



With the decline of Rome in Europe, ‘spiritual’ and ‘temporal’ powers were not always easy to distinguish. Religious institutions rivalled – and sometimes surpassed – political ones in their material power. To secure this, they imposed forms of taxation. For Christians it was a ‘tithe’, or a tenth of what the faithful produced, usually paid to the Church in kind. Tithe barns for the receipt and storage of such payments were lesser in size only to churches in villages and towns. The expansion of Islam was accompanied by the ‘Islamic Tax’, the khums, or ‘one twentieth’ – more modest by half than the tithe. There are direct references to it in the Qu’ran, which requires its use for specified purposes, such as the relief of the poor. In India, Islamic rulers imposed a tax called jizya in the 11th century. In Latin America the Aztec, Olmec, Maya and Inca cultures all seem to have raised forms of taxation, usually in association with ritual observance. Both Hindus and Buddhists sustained their temples and monasteries with contributions of time, skill and resources from the faithful.



Doomsday



Land was the basic commodity of feudal Europe and service (military or labour) its currency. Aspiring monarchs had little access to revenues in cash, though ‘scutage’ was sometimes accepted in lieu of military service. Then the Vikings, sailing from Scandinavia, started demanding protection money. In 845 they extorted six tons of silver in return for not sacking Paris; in 994 a similar amount from London. Though the Viking threat subsided, ‘Dangeld’ (restyled ‘carucage’ in England) was still collected by rulers. After the invasion of England in 1066 by the Normans (themselves descended from Vikings), William the Conqueror commissioned the Doomsday Book, a land survey to assess his new kingdom’s tax potential.



Imperial measures



More modern systems of taxation followed the expansion of imperial Europe, together with towns and cities, where tribute in kind was less useful – cash was the currency here. The monarchies of Spain and Portugal, however, still transposed feudal structures, and an obsession with gold – which was portable – to their occupation of Latin America. Others followed the example of the city states of Italy, particularly Venice, which had grown rich on trade with the East; taxes on trade were relatively easy to raise. France, the Netherlands and Britain in particular began to establish commercial outposts, and then military control, across Africa and Asia. Traditions of tribute through human bondage revived, however, with the triangular slave trade between Africa, Europe and the Americas. In Britain, a disagreement on the rights of taxation between Parliament and King Charles I in 1629 led to civil war.



Nation states



Resentment of tax fuelled the French Revolution between 1789 and 1799. Thereafter, Napoleon centralized the tax system and employed private collectors who could keep a proportion of their takings. Revolt against taxation – levied from imperial Britain – also fuelled the formation of the United States, though an independent Congress soon enacted the Federal Property Tax in 1798. By now, no aspiring nation, in Europe or elsewhere, could dispense with the machinery of a state or the taxes to pay for it. At the same time, the principle of ‘no taxation without representation’ was becoming more firmly established – though representation was still largely limited to the wealthy.



Promises, promises



As the power of monarchies declined and of industrial capitalism increased, a new settlement was required. This was pioneered in Britain. Income tax was first imposed on personal wealth in Britain in 1798, to pay for the wars with Napoleon. It was billed as a ‘temporary’ measure, renewable annually by Parliament – and has remained so ever since (it still expires on 5 April every year). A year after the Battle of Waterloo in 1815 it was repealed. In the general election of 1841 Sir Robert Peel opposed income tax, but once elected he reimposed it, reducing customs duties at the same time. Tax ‘commissioners’ (who came from the landed gentry) were transformed into the Board of Inland Revenue in 1849 to produce an efficient bureaucracy. In the general election of 1871, both Gladstone and Disraeli opposed income tax. Disraeli won, but the tax stayed. In 1908, Lloyd George as Chancellor introduced non-contributory old-age pensions, and – in the ‘People’s Budget’ of 1909 – plans for a super-tax on the rich. The rejection of this by the House of Lords led to the 1911 Parliament Act which removed the Lords’ power of veto. As taxation increased, so the right to vote and the principle of democratic consent were extended, culminating in universal adult suffrage.



Taxes to beat the Axis



At the start of World War One in 1914, the standard rate of income tax in Britian was 6 per cent; by the end of the war in 1918 it was 30 per cent. An Excess Profits Tax was levied on companies benefiting from war production. The total tax ‘take’ was 17 times higher than it had been in 1905. This continued after the war, when government was expected to provide homes and public services in ‘a land fit for heroes’. Government borrowing soared. In the US, the ‘New Deal’ in response to mass unemployment during the Great Depression of the 1930s relied heavily on the Federal Government’s ability to borrow against future tax revenues. It was only after Pearl Harbor, and the US entry into World War Two, that the Revenue Act of 1942 subjected millions of new taxpayers to income tax and gave rise to a whole new taxpaying culture. The Federal Government launched an all-out campaign to market the changes, including Disney animated shorts featuring Donald Duck touting the importance of ‘taxes to beat the Axis!’ Asked in February 1944 whether they considered the amount of income tax they paid to be ‘fair’, 90 per cent answered ‘yes’.



Cold war



Great expectations also followed World War Two. Worldwide liberation movements made ‘nation building’ (and the state machinery to go with it) an urgent priority for newly independent states in Africa and Asia. However, the Cold War between the ‘West’ and the Soviet Union ensured that vast military machines continued to operate at public expense, and ‘defence’ loomed large in the finances of the new states right from the outset. Meanwhile, demand for public services gave rise to such things as the National Health Service in Britain and new forms of taxation to pay for them. Scandinavia led the way as the proportion of national wealth devoted to public expenditure and services rose towards a half. The use of taxation to redistribute wealth and even out the inequalities of capitalism in the West became an ideological weapon in the Cold War.



Global consensus



As the Cold War came to an end, triumphant free-market orthodoxy demanded ‘small’ government, privatization and cuts in taxes on the wealth of private individuals and corporations. Corporate globalization was, in any event, making it more difficult for nation states to exercise control (or collect taxes), rather than compete with each other to offer the most favourable rates. In Russia, the tax rap became a nationalist tool against oligarchs and foreign businesses. Everywhere, the ‘neoliberal’ process has continued, but its outcome is increasingly uncertain. Public expenditure as a proportion of national wealth has not fallen in rich countries. Private or corporate wealth still relies on governments to provide (or, more often, finance) a vast range of services – including ‘bail-outs’ when free-market orthodoxy turns out to be flawed, as in the recent ‘credit crunch’. Military expenditures have still not been reduced significantly. In poor countries, revenues for desperately needed public services remain minimal. A ‘global consensus’ agrees, as the saying goes, that ‘only the little people pay tax’.








The World History of Taxation


by Roni Deutch

Egyptian Taxes
The first known taxation system was in ancient Egypt. The Pharaoh would collect taxes twice a year from the Egyptians. One of the most commonly taxed items in the ancient world was cooking oil, which was actually taxed throughout Egyptian history because of shortages. Egyptian taxes eventually became so widely known that they were even mentioned in the bible, "when the crop comes in, give a fifth of it to Pharaoh."
Athens, Greece
To the Athenians in Greece, war was a lifestyle, and a pricey one at that. As such, Athenians taxed their citizens for war costs with a tax they called "eisphora." The most historic factor of this tax was that it exempted no one, which many consider the first democratic taxation system, as after the wars the money was often refunded to the people. There is also some documentation of a tax put on foreigners (or any individual without an Athenian mother and father), called "metoikion."
Salt Tax in India
Salt has been taxed in India for centuries. However, in 1835 the British East India Company raised the import taxes drastically after they began to impose rule over Indian provinces. The salt tax was raised and lowered by multiple leaders and events, and was not repealed until 1946.
Rome and Caesar
Taxes called "portoria" were first levied in Rome on imports and exports to the city. Caesar Augustus, who is now considered a genius tax strategist of his time, gave individual cities the job of collecting taxes. He also raised sales taxes on slaves from 1% to 4%, and created a tax to raise retirement funds for soldiers of the army.
Great Britain
The occupation of the Roman Empire may have sparked the flame for first taxes in England. During the 11th century Lady Godiva's husband, Leofric, Earl of Mercia, said he would lower taxes were she to ride through the streets naked on a horse. Lady Godiva made the now famous ride and lowered taxes for her people.
The French Revolution
Before the French Revolution, civil unrest laid heavily on the shoulders of high taxes for lower classes. While clergymen and nobles were exempt to taxes, peasants and regular wage earning workers were not. The tax gap also left lower class citizens unable to pay court fees, making justice unaffordable except by those wealthy enough to afford it. While the true cause of the French Revolution is still being debated today, many Historians feel these high and unfair taxes were a large contributing factor to the civil unrest.
The Tax Lady Roni Deutch and her law firm Roni Lynn Deutch, A Professional Tax Corporation have been helping taxpayers across the nation find IRS tax relief for over seventeen years. The firm has experienced IRS tax attorney who will fight the IRS on your behalf.



Article Source: http://EzineArticles.com/1876557








Here's another interesting site that gives some strange and unusual facts about taxes throughout history, and judging by the website, it appears to be an actual, official tax website:







Another site on the history of taxation that seems fairly extensive and interesting is from none other than the Encyclopedia Brittanica. You can find it at this site:






American Tax History




Here is an interesting site that seems to be at least parts of an actual book (online), essentially, titled "A World History of Tax Rebellions", by David F. Burg. I will admit to perusing it, and not really exploring it more in depth. It is long and, frankly, a history of tax rebellions might sound interesting, but for the purposes of this one blog, on this one day, was a bit too extensive for me to actually explore further. Still, if you are interested, here is the link (and it's free, evidently!):

http://books.google.com/books?id=LrvxuLs101cC&pg=PT121&lpg=PT121&dq=history+of+taxes+godiva&source=bl&ots=8LNfUXHRbS&sig=_AK9_6Nb48ZnFX1W5-HHJizOTY8&hl=en&sa=X&ei=4TlqUZeZIorQ0wGH0YG4Dw&ved=0CHUQ6AEwCTgK
Posted by at
Labels:

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)