If you are not a millionaire or billionaire, there is no escaping taxes. In celebration of the upcoming Ides of April, I am highlighting the history of taxes in Western Civilization. If nothing else, it gives us a clear idea of whom to blame. Special thanks to the Tax Analysis group, whose website I drew upon as a source for this fascinating history of legalized robbery.
|Egyptian kitchens were the scene of the earliest recorded taxes.|
- Earliest records trace taxes to Egypt. During one period, the Pharaohs imposed taxes on cooking oil. To make sure citizens were not skimping on taxable cuisine, tax collectors audited households to make sure the appropriate amounts of cooking oil were being consumed and that families were not using leftovers from other cooking processes as a substitute for the taxed oil.
- Much like today, the ancient Athenians in Greece used taxes to fund wars. No one was exempt from the tax, which was used to underwrite special wartime expenditures. However, unlike our government today, when the war was over, the tax was rescinded and the plunder gained from the war effort was used to refund the taxes that had been paid. Nice.
- Roman ruler Caesar Augustus (63 BC-19 AD) was considered a shrewd tax strategist. During his reign, he eliminated national tax collectors and placed responsibility for tax collections on local officials in each city. He instituted an inheritance tax to provide retirement funds for the military, which was 5 percent on all inheritances except gifts to children and spouses. The English and Dutch later used this as a basis for developing their own inheritance taxes.
- During the time of Julius Caesar (100 BC-44 BC) , a 1 percent sales tax was imposed. Augustus expanded on this a bit. There was a 4 percent sales tax on slaves and 1 percent on everything else. I guess you might consider the former an early example of luxury tax.
- One of the earliest tax revolts on record comes from 60 AD. Boadicea, Queen of East Anglia, in what is now Britain, led a revolt against Rome which some say was due to corrupt tax collectors. When she was finished, her legion of 230,000 angry taxpayers had killed all Roman soldiers within 100 miles and seized London. It is said that more than 80,000 people were killed during that uprising. Sadly, Emperor Nero eventually crushed this citizens’ movement and the Queen felt compelled to commit suicide.
- Boadicea was not the last woman to lead a tax revolt in Britain. In the 11th Century in England, Lady Godiva, of chocolate fame, was an Anglo-Saxon woman married to Leofric, Earl of Mercia. Leofric was taxing the bejesus out of the citizens of Coventry. When Lady Godiva objected, he sneeringly replied that he would lower the high taxes he had levied on local residents when she rode naked through the streets of town. This may be the earliest record of a couple playing Truth or Dare. Lady Godiva chose the latter. This resulted in a double bonus for taxpayers.
- The 100 Years War (conflict between England and France) began in 1337 and ended in 1453. One of the key irritants that renewed fighting in 1369 was the oppressive tax policies of Edward, the Black Prince, over the nobles of Aquitaine. Aquitaine was British until the end of that war, when it was annexed to France. (No one knows why Edward was named the Black Prince, a name that sprang up after he died.)
- During the 14th Century, Britain dabbled with progressive taxes. In 1377, the Duke of Lancaster paid 520 times the tax of a common peasant. Those were the good old days. The earliest income taxes were 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.
- Any British history buff knows that Charles I was charged with treason and lost his head. What many people may not know was these charges came about based on a disagreement in 1629 about the rights of taxation. Charles thought the king had the rights of taxation. Parliament felt it had the rights of taxation. Charles lost the argument. Somehow I can't imagine it mattered much to the average person, who was going to get taxed either way.
- In 1643, Britain’s Parliament levied taxes to fund Oliver Cromwell’s army. These taxes made the late and headless Charles I look generous in comparison. Essential commodities such as grain and meat were taxed with a devastating effect on the poor. Rural laborers were taxed so much that they couldn’t afford to buy food for their families who were now starving. At the same time, the common lands were enclosed and peasants were banned from hunting there. Angry citizens responded with the Smithfield riots of 1647, and the legend of Robin Hood was born.
- American Colonists had their first taste of taxes with the Molasses Act, which was later expanded in 1764 to the Sugar Act because it now included duties on foreign molasses, sugar, wine and other commodities. Apparently, this did not raise the money Britain had expected, so they imposed the Stamp Act in 1765. This taxed all newspapers printed in the colonies and most commercial and legal documents. All of these taxes resulted in an agitated populace. They dumped tea in Boston harbor and decided to form their own country.
- Taxes, however, did not end with the birth of the United States of America. In 1794, settlers west of the Alleghanies, in opposition to Alexander Hamilton’s excise tax of 1791, started the Whiskey Rebellion, and rioted against the tax collectors. President Washington eventually sent troops to quell the riots. Two settlers were convicted of treason, but Washington granted them both a pardon.
- Now for the origin of Freedom Fries. (Well, not really.) In 1798, Congress passed the Federal Property Tax to fund the expansion of the army and navy in case the U.S. went to war with France. John Fries began the Fries Rebellion to voice his opposition to this tax. No one was hurt during this revolt, but Fries was arrested for treason. Eventually, he was pardoned by President Adams in 1800. In a twist of irony, Fries had been the leader of the militia unit called upon to quell the Whiskey Rebellion.
- The first suggestion of an income tax came during the War of 1812. The proposed tax was based on the British Tax Act of 1798 and applied progressive rates to income. The rates were .08 percent on income for the average person and 10 percent on income for the well-to-do. However, the tax was never imposed because the Treaty of Ghent was signed in 1815, eliminating the need for additional revenue.
- During the Civil War, President Lincoln passed the Tax Act of 1862 to help fund that war. The rates were 3 percent on income above $600 and 5 percent on income above $10,000. 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." While the populace may have been cheerful about it, compliance was not high. Only 276,661 people filed tax returns out of a population of approximately 38 million. Additional taxes were passed with the “recognition of the idea that taxes shall be paid according to the abilities of a person to pay," according to Senator Garret Davis.
- When the Civil War ended, the public suddenly became less cheerful about the concept of taxes. Several attempts were made to make the taxes permanent, but by 1869 even the New York Times was coming out against it, writing that “no businessman could pass the day without suffering from those burdens.” Finally, in 1872, federal income tax was repealed and significant tariff restrictions took its place, serving as a major source of revenue for the federal government until 1913.
- Interestingly, in the 1860s, federal income tax was challenged in court. The Supreme Court unanimously supported the tax. After the war, however, the tax was declared unconstitutional by the same court because it represented direct taxation on the citizenry which was not allowed under the Constitution.
- In 1913, the Constitution was modified. The 16th Amendment was passed, which allowed Congress authority to tax the citizenry on income. I bet you never learned about that in school.
- During the Depression, in the 1930s, individual federal income taxes were kept to no more than 1.4 percent of the Gross National Product (GNP). Corporate taxes were never more than 1.6 percent of the GNP. (GNP is a measure of a country's economic performance, or what its citizens have produced, i.e. goods and services, within its borders.) In the 1930s, corporations took the brunt of the tax burden; this changed. In 1990, those same taxes as a percent of the GNP were 8.77 percent for citizens and 1.99 percent for businesses.
So there you have it. It all began with cooking oil in Egypt. Then it crossed to the Mediterranean to Greece and Rome, went up into Europe and across to the New World, aka, these United States. I can't help but wonder, though... would things have turned out differently if only the ancient Egyptians had learned to steam their food?