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Taxes

Taxes, we hate them but we can't seem to live without them. There are sales taxes, income taxes, use taxes, corporate taxes, payroll taxes and the list just keeps going on and on. But where did the idea of taxes come from? Is the idea of financing a country or state or even city for that matter by taxes new? Let us see.

I think it is important to know that banking started somewhere between 3000 to 2000 B.C. in Mesopotamia. Without banking there could not have been any meaningful accounting of taxes.

Ancient Mesopotamia, instituted a tax, when translated was called 'burden'. Of course, this tax wasn't on money since there wasn't any. A citizen might be required to bring a cow or sheep to the government office once a year. Merchants would try then as now to avoid taxes. Here is a portion of a translated letter from 1900 BC:

"Irra's son sent smuggled goods to Pushkin but his smuggled goods were intercepted. The Palace then threw Pushkin in jail! The guards are strong...please don't smuggle anything else!"

Almost everything you did was taxed even funerals. But the hardest tax was the labor tax. Every able-bodied man who was the head of a household owed the government many months of labor. The government might make you harvest government fields or serve in the military. The rich would send people in their place, which was illegal but overlooked.

Even the ancient Egyptians paid taxes. As early as 3000 BC the Pharaoh would appear in a ceremony before his people, this was called the Following of Horus. He would then collect taxes. The Egyptians were taxed on cattle and grain. They also had to meet a labor requirement. On top of all this the Pharaoh would tax them when he needed. As is now there were tax shelters in the form of royal charters of immunity from taxes.

Princeton University has a papyri document from Philadelphia, Greece, dated 35 A.D. which is a tax roll. Since it is a fragment most of the details are missing. In the fifth century BC the Greeks were the first to establish a system based on universal coinage, which made taxing easier.

The Romans having spread out into the known world, built expensive cities with sewers, running water, and superb roads. To finance this, they instituted a system of taxes. If a Roman was working he paid the tax collector a portion of his earnings and the tax collectors paid the Senators a portion of what they collected. The Senators kept most of the money for themselves but provided a small part of the funds for the poor.

The population of ancient China was mostly farmers. Everyone in China had to pay taxes. Farmers usually paid their taxes in the form of grain or labor.

Italian city-states in the 1200s and 1300s levied a dazio tax on mercantile property in time of war. This tax could be levied up to several times in a year during wartime.

Britain faced a threat from the French in 1797. Revolution spread by the French had reached Germany, parts of Italy and the Netherlands. French troops were on their way to help the Irish rebels and British sailors were mutinying at Spithead. William Pitt the Prime Minister knowing the treasury was almost empty started an income tax. The tax worked and Britain was saved.

In America, the first income tax was introduced in 1861. It was required to pay for the Civil War. The citizens were taxed at the rate of three percent on incomes over $800.00 per year. The next year it was raised to five percent of all incomes over $10,000.00. Most of the ordinary citizens didn't make enough to pay taxes. In 1893 Congress passed an income tax but the Supreme Court ruled it unconstitutional in 1895. President William Howard Taft pushed for a constitutional amendment over turning the decision and an income tax was passed when the 16th Amendment was ratified in 1913.

As we can see from the above where I only touched on a few societies, taxing is a very old idea. In many places it was much more popular in war time than in peace time and because of this was suspended in time of peace, but many places retained it

If we consider how many pages are in the United States tax code, including regulations and revenue guidelines, it comes to a staggering 75,000 pages. Why is the Federal Tax Code so large? Many believe it is so large and complex so that the rich can find loopholes they can employ to save on their taxes. This also goes for companies. These are the ones who can employ expensive lawyers and accountants to squeeze the most out of the system.

I have to wonder what the founders of the country would think about all the different tax authorities we have today. Remember they got angry about the tax on tea. How would they feel about all the tolls, sales tax, congestion pricing, school tax, property tax, and so forth? I think they would have a hard time believing we were living with this tremendous burden.

Besides the federal income tax, California state is charging its own tax of 13.3 percent on its residents. In 2021 there were 153.6 million tax returns filed in this country. Individuals had paid about 2.2 trillion dollars. It has been estimated that about 10 million people didn’t file their returns and now that all these illegal migrants are getting in to the country, you can bet that number will increase dramatically.

Forty-one states have an income tax and nine do not. The ones without an income tax are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. I find it amazing that some states just keep trying to drain more and more money from their residents while others don’t need an income tax to balance their budget.

While not an income tax there are plenty of tolls, petroleum taxes such as state gas tax, and all sorts of fees which are imposed on state residents. When we complain about the price of gas, we have to remember part of that price is a state tax which is included. This figure may not be up to date, but the average New York State price per gallon of gasoline tax was said to be about over 48 cents for a gallon.

The United States is not the only country with overtaxed residents. In the 18th and 19th century there was a window tax in England, Scotland and in the rest of Great Britian. The more windows you had, the more tax you paid. I hope California doesn’t find out about this; I don’t want to give them any ideas.


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