GENESIS OF TAXATION

 

GENESIS  OF  TAXATION

HOW IT EVOLVED

SARASIJ MAJUMDER

 

NOTE:-- I WILL COVER IN A SEPARATE BLOG  EVOLUTION OF  TAXATION IN INDIA.

 

While agriculture may have kickstarted the human civilization, we could say that taxes shaped it.

If we look back to the very beginning, we find that taxes have a religious origin.

Today, religion, ruler, and state are often viewed as separate entities, but in ancient times, they were either all one and the same, or the Head of Religion and Ruler—The Priest and The Monarch-- were in same league..

In many early civilizations, such as the Egyptians, Mesopotamians, Chinese, and Mesoamericans, the ruler was considered a descendent of  God.

Therefore, paying tribute to the ruler wasn't just a legal obligation—it was also a religious duty.

Ancient civilizations typically had two major forms of taxes: Labour And Tithe.

It's important to recognize that these early societies didn't have money in the way we have it today, so people paid their taxes in kind.

The first form of tax, Labour, required almost every free man in society to provide months of work to their rulers—King, and Priest.

How else do you think those impressive monuments Palaces, and Places of Worships were built? Of course, not everyone was thrilled with this system.

In ancient Babylonia, people even referred to it as "the burden," which is probably why the term "tax burden" still resonates today.

Those having  the means often tried to avoid labour service by sending their slaves or hiring someone else to fulfil the obligation on their behalf.

While this practice was technically illegal, proper identification wasn't really possible back then, making it easy for people to send someone else as a replacement.

Now, let's talk about the second form of tax: Tithe, which involved giving a portion of your Goods, or Products to the authorities.

The problem was that governments, like those in Mesopotamia, often abused this system, trying to tax anything and everything they could get hold to.

Because many of these taxes had religious origins, their collection became ritualized.

For instance, in ancient Egypt, tax collection was an event that occurred once in every two years, during which the Pharaoh would embark on a royal tour throughout the kingdom, appearing before his people and collecting his due.

Over time, tax collection became more than just a way to sustain a government—it became a tool for building vast empires.

Some believe that this is how Persia managed to create its empire, which at its height stretched from Libya to what is now present-day Pakistan.

The rulers kept their massive realm intact through the creation of royal domains, with local administrators governing these domains on behalf of the MONARCH and  his family, or state officials.

In return for their loyalty and services, these local administrators were granted a portion of the local tax revenue.

As evident fro History,  Persia had created one of the world's first bureaucracies.

As societies progressed, it became harder for rulers to convince people that they were the embodiment of  God, making it more challenging to justify taxes.

However, some societies took a different approach—a more secular perspective on taxes.

To them, taxes were a form of civic duty.

Among such societies were the ancient Greeks, and because of this different perspective, their tax system was far less stringent, and more rational. Greece is really Mid-Wife of European Civilization.

In ancient Greece, there was no concept of regular taxes in most city-states.

Instead, there was only one method of taxation called the "EISPHORA," which was applied only to the wealthiest members of society and levied only in times of great need, such as during war.

Interestingly, if someone believed that a wealthier person was being taxed enough, he had the right to refuse to pay the tax any further.

Some larger Greek city-states, like Athens, did impose other forms of taxes, but these were minimal and designed for the benefit of the citizens rather than the government.

These taxes included a duty tax on cargo, which was kept around 1%, and a special tax called "LITURGIES."

The Liturgy tax was applied to the wealthiest individuals in Athens and was meant to fund public projects that were too expensive for one person to bear alone.

This tax enabled the construction of powerful warships, the building of great temples and gymnasiums, and even supported theatrical plays for entertainment.

But what's truly fascinating is that the super-wealthy of GREECE  actually competed to pay the largest sums of money for liturgies.

It's pretty difficult to think that rich people once vied to pay taxes.

Moving on to the Romans, their infamous bureaucracy took center stage.

Ruling a vast empire was both difficult and expensive, and the Romans didn't make it any easier by displeasing existing elites.

Instead of relying on local lords and chiefs, the Romans employed private tax farmers.

Officially, the government set a certain tax rate, but there was nothing to stop these tax farmers from collecting far above the official rate, opening the door to extreme corruption.

This is likely why many provinces were subjected to an unusually high number of unauthorized, illegal revenue-generating schemes.

The greed of the tax collectors didn't end there.

They would collaborate with other Roman capitalists to buy up and stockpile grain during the harvest season, only to sell it back at highly inflated prices during shortages.

As a result, many people struggled just to survive.

To make matters worse, these tax farmers would then loan their ill-gotten gains back to the local population, charging exorbitant interest rates.

It's no wonder that tax farmers have been persistently lumped in with sinners in the Bible.

Despite the Roman Empire's constant financial struggles, particularly with maintaining its vast professional army, the government didn't crack down on corruption.

Instead, it continued to impose more taxes on ordinary people.

The government even reintroduced a land tax on Italian citizens, something that had  continued  for centuries.

On top of that, special tolls and fees were imposed on commercial activities, and the government went so far as to grant citizenship to everyone in the empire, just so they could collect more taxes.

Over time, the people came to expect very little from their government except more, and more taxes.

It's no wonder that, during the empire's final days—at least in the West—many citizens actually sided with the invaders and even fought alongside them.

To conclude, many aspects of a civilized Government, such as military, infrastructure, and governance, are too much for any individual to bear alone. That's where taxes come in—they help distribute the responsibility of large, essential expenses.

However, when the state uses taxes not for the welfare of its citizens but to sustain itself, it veers towards tyranny.

We've seen this happen repeatedly throughout history, across different time periods and regions.

This is why the tax structure imposed by the ancient Greeks is so intriguing.

When you have the wealthy competing to pay taxes, you are staying in  a truly unique and interesting part of the world.

 

References:-

1.0  https://www.ibfd.org/sites/default/files/2022-05/20_007_History_and_Taxation_The_Dialectical_Relationship_between_Taxation_final_web.pdf

2.0  https://www.semanticscholar.org/paper/History-of-Taxation-Samson/91684537ecce2198f81331269d6a9f8471aed0a8

3.0  https://www.forgottenbooks.com/en/download/AHistoryofTaxationandTaxesinEngland_10123716.pdf

4.0  https://www.researchgate.net/publication/304953205_Historical_Note_The_History_of_Taxation_is_Written_in_Letters_of_Blood_and_Fire

Image:- Zacchaeus the chief tax collector in Jericho. Biblical illustration depicting Luke 19:1-10: Courtesy—https://www.shutterstock.com/g/Annalisa+Jones. All are acknowledged.