Death and Taxes.
I am sure you’ve heard these two things are inevitable parts of life.
I know because half the articles I read researching this video refer to this idiom.
To Americans, it’s almost tax day, and we do seem to think of taxes as just a fact of
life.
A price we all pay to live in a society which functions.
I imagine you can all guess this wasn’t always the case.
So to paraphrase a wise historical figure from a bygone era, “what’s the deal with
taxes?”
Hi, I’m Tristan Johnson, and this is Step Back History.
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Taxes have been around in one form or another for thousands of years.
We have records from China 3,000 years ago and from ancient Egypt talking about taxation.
Let’s begin there in ancient Egypt.There’s even a reference to taxes rendered to the
pharaoh in the old testament of the bible.
Egyptians had tax collectors called scribes who would go door to door to collect money
from the citizens on behalf of the kingdom.
Instead of taxing income, Egyptian kings would put taxes on specific goods.
One such example which sticks out is a tax on cooking oil.
This got to the point of there being Egyptian auditors who would go to homes and ensure
they were using enough oil and they weren’t reusing old oil to keep revenue up.
The Egyptians also seemingly imposed a tax on wealth, based on the total value of one’s
goods.
This one was usually levied to pay for many many wars.
Something you will find is a regular part of this history.
Ancient Greeks used to use taxes to pay for their various wars as well.
The ancient Athenians had a tax called the eisphora imposed on every single citizen of
Athens.
These taxes were only temporary, and once wars were over, Athenians lived untaxed.
I do say it applied to ATHENIANS however because they had a completely different tax for foreigners.
By the way, to the Athenians, foreigner meant someone who did not have BOTH parents born
in Athens.
They called it the Metoikion, and instead of being a yearly affair, these people paid
up monthly.
Oh, and like some bars, they halved the cover for living in Athens for women.
However, you are probably not too surprised to find out many of our concepts of taxation
come from the early founders of bureaucracy, the Romans.
They paved the way for tax policies until the 20th century.
Primarily they raised money via the taxing of imports and exports known as duties.
Now, of course, this works for every average day, but what about when Rome was at war?...
ok when Rome as in a more significant war than usual?
Well, they were always trying to find new little schemes to raise more money from their
people.
One brilliant tax schemer was emperor Augustus.
One of the things people hated about taxes were the publicani.
Imperial tax collectors who would go door to door to get their cut from the people.
Literally like paying protection money.
Romans didn’t much like some jerk from Rome coming to their doors to ask for money, so
Augustus…
localised the process.
He put the responsibility of tax collection onto individual cities and colonies.
Agustus also implemented the first inheritance tax, or a tax on receiving wealth willed after
death.
About 5% on everything not given as a gift to children and spouses.
This inheritance tax would be long-lived.
Hundreds of years later tax codes reference Caesar Augustus in places like the Netherlands
and England.
Lastly, the Ancient Romans had a sales tax, or a tax on purchases.
This was usually about 1%.
Since we’re hitting about the time BCE and CE meet each other, the Abrahamic religions
tended to keep some form of religious tax as a way of supporting their organisations.
Christians from the oldest days had a 10% tax called a tithe that usually went to the
church.
Muslims have a 5% tax called the khums used as relief for the poor.
They would also tax non-muslims with a tax called the jizya beginning in India in the
11th century.
Now, England’s story with taxes has origins in the Roman conquest.
In fact, one of the most famous wars in ancient English history was about taxes.
Corrupt tax collectors caused the Queen of East Anglia to lead a massive revolt against
the Romans.
The legends say she killed every Roman soldier within 100 miles of her land and took London.
Her name was Boudicca, and she was a massive badass, and I want to make a video about her
someday.
Boudicca’s revolt over taxes resulted in her raising an army of more than 200,000 and
killing more than 80,000 Romans before getting crushed by Emperor Nero.
All over taxes.
Another famous tax revolt is from another legendary woman of English history, Lady Godiva.
In the 11th century, her husband, the Earl of Mercia promised to reduce high taxes when
her wife rode a horse naked through the streets of Coventry.
A thing she then did.
If I weren’t worried about a copyright strike, I would have that clip from the Simpsons where
Mr Burns says he’ll donate a million dollars to charity when pigs fly.
With the precedent of taxes in place, many Saxon lords imposed taxes on British people
called the Danegeld which was a property tax.
They also used the Roman duties on imports and exports.
In both England and France, intertwined political worlds in this period, wars were frequently
over taxation.
The 100 years war was over the taxes in Aquitaine.
One of the English contributions to the history of taxes is the progressive tax.
Which I should explain because you hear progressive and regressive taxes a lot.
A progressive tax is a higher percentage tax placed on more upper-class people in whatever
measure of wealth your taxing.
A regressive tax is then, the opposite of that.
Usually, that one comes along with a particularly nasty disdain for poor people.
Anyway, the English implemented a progressive tax system in the middle ages.
Records show, for example, the tax rate for the Duke of Lancaster was about 520 times
higher than the average peasant’s tax rate.
Talk about steep.
This is quite common in English taxation.
They treated the poor pretty good.
I mean in the taxation sense because they paid almost no taxes, but don’t mince words
life really sucked being poor at any time in history.
So taxes were generally reserved for clergy members, nobility, or wealthy merchants.
A famous document in English history called the King’s Writ formalised that the government
would change taxes based on a person’s status or means.
I draw attention to the English because they’re responsible for a lot of innovation in taxes.
As time moved on, they would continue this trend.
To finance Oliver Cromwell’s disagreements with other leaders, England created the excise
tax, which is a tax on the producer or merchant of a particular good, making it more expensive
to get into the business.
Genius Oliver Cromwell’s government was, they applied this to the essentials of life
like meat and grain.
They also decided for some weird reason to make it regressive.
It led to a series of riots as poor people COULDN'T AFFORD FOOD, and it was illegal to
hunt… unless you were rich.
In the 1800s, Great Britain was becoming more modern and organised.
So they usually get credit in this period for inventing the income tax, which is likely
the one you are most familiar with today.
As with many reasons taxes were put in place, it was to fund a war.
The British implemented the reported first income tax in 1800 to raise money to fight
Napoleon and lasted all the way to 1816, a year after the battle of Waterloo.
After the repeal, the government decided only to use taxes for useful things like war.
This was serious, they even burned all their income tax records to show how serious they
were (while keeping a copy in the basement).
And now, let’s rewind a bit and go to the most famous haters of taxes in history, the
Americans.
As you probably know, taxes had a tiny bit of an impact on the formation of the United
States.
For ages, they paid a tax on molasses, the sweet, gooey stuff you use to make rum, but
after another war against the French, the British needed to raise some funds and thought
the Americans could pay for it since they got a big new chunk of territory to settle
into kinda.
It began with an amendment to the molasses act by adding a similar tax to commodities
like wine and sugar.
This didn’t raise much money, so they put a new stamp act which would be a tax on newspapers,
and pretty much all documents.
This escalated to the point where the Americans revolted against taxation.
It evolved into a little scuffle we know today as the American Revolution.
It was a long… and drawn out conflict which lasted years.
Say, how did these patriots revolting against taxes pay for their war?
The new United States was then understandably just a tad timid about taxes.
So, for the first years of American history, no taxes.
However, governments need money, something we should probably let Rand and Ron and Ted
know, so they relied on tariffs because it had the double feature of encouraging local
production, and incentivised the states to trade with each other rather than with England,
or the other colonial empires.
They eventually tried imposing an excise tax on booze, cigars, and sugar.
All the deadly addictive substances part of a balanced 18th-century lifestyle.
This tax on hooch did not go down well, so the people of America tried to exercise their
second amendment rights, water the tree of liberty, and do all those things grandpas
fantasise about in their pissed off right winger group on Facebook.
REBEL!
This led to what we call in history books the Whiskey Rebellion.
George Washington gathered the thing those rebels, and Facebook grandpas always forget
exists, the military, and put it down pretty quick.
Then the US found itself fighting France, pushing indigenous peoples off their own territory
and invading Canada, which got expensive real quick, so the Us finally put up a property
tax, as well as more excise taxes and tariffs.
However, when a handful of states just couldn’t give up their sweet, sweet slavery, the US
got into the biggest war it had ever faced… the decidedly uncivil civil war.
And what always happens when we go to war?
So to call the Civil war expensive would be an understatement.
It’s rather hard to comprehend just how much the war cost the US.
It was their first war of the industrial era if you don’t count wiping entire nations
of people off the map in the west, but you know.
It meant they needed lots of machines, weapons, equipment, and people paid for with new taxes.
After less than a year, the US was already in massive debt, so they passed the Revenue
act imposing an income tax on people making more than $800 a year.
You know, the rich people.
What makes this interesting is the Us decided to continue this program for seven years after
the end of the Civil war and had placed in infrastructure for a US tax system
Now, the US constitution had a piece which did not allow for taxes not proportional to
the state’s population, which killed that revenue act.
However, by the late 19th century America was in a lot of debt funding all that completely
free market capitalism classical liberals wax lyrically about in an extremely wrong
fashion.
Modern countries need money to live, and so they needed to raise money, but constitutional
blocks prevented them from imposing any.
The solution was to amend the US constitution.
Yes, people, the constitution can be changed.
It’s almost as if it’s just a document or something and not etched on stone tablets
from heaven.
In 1913, the Wilson administration passed the 16th amendment to allow for taxation and
join the ranks of modern countries.
They used it to impose a tax on people who made more than $3,000 a year, less than 1%
of the population.
A funny side story is that the first tax law imposed a tax on lawful income, so gangsters
didn’t have to pay taxes.
This was changed to just income later, which means you do need to declare all crime-related
income.
It’s how they got Al Capone!
The US then got involved in a couple of World Wars over the next few decades.
Decidedly expensive displays.
They increased a tax so now 5% of Americans would pay them, as well as new taxes on inheritance
and excess business profits.
This oppressive government intervention in the economy led to two massive economic booms
in the 20s and 50s.
The 50s even had a 94% tax on income after your first million, and the world didn’t
end.
Well, it almost did, but that’s more because of nuclear bombs.
Then the 60s and 70s happened.
As the rest of the world started to get back on its feet, and the US has to compete with
other countries making manufactured goods, there was a period of inflation, where money
loses worth at a fast rate.
The amount people paid in taxes, however, didn’t adjust for inflation, they merely
raised it as need be, which was politically unpopular.
This coupled with inflation led to a nosedive in government revenue.
President Nixon, always the source of wisdom, decided to lower taxes in this period, and
Reagan even more so.
Don’t worry, all those new services which were lifting the poor out of poverty and boosting
the economy, they could just cut those.
Taxes stayed low in the 90s and in the early 2000s George Bush to fund his not one but
two wars at once funded it by… lowering taxes?
This can't be right.
Oh, yeah, he burned through the Clinton surplus and put the US in massive amounts of debt.
AND his reforms crashed the economy?
AND they responded to it by bailing out massive corporations instead of people?
AND they blame taxes being too high for their soaring debt?
Huh…
Different countries followed a roughly similar path.
Outside the US other countries rely on various combinations of duties and income taxes to
pay for their services.
There’s a new norm today seeded comfortably in debunked pseudo-economics.
It's becoming easier and easier for rich people and corporations to pay little to no tax.
So the progressive tax is becoming more regressive every year.
In times of economic turmoil that can’t possibly go wrong.
Right?
And now I don’t have a satisfactory ending…
Happy tax day?
Oh gosh, and here I am at the end of the tax story, but there’s so much more I wanna
tell you!
The Aztecs and Olmecs had quite an intricate system of taxation.
Hindus and Buddhist temples have a sort of tax on skills, resources and time to keep
going.
The Vikings had a form of taxation, where you paid them silver in return for them not
ransacking your city!
I missed a lot here so please fill out the cool tax stories in the comments and we’ll
keep the conversation going there!
Hey, are you free Wednesday night?
I want to let you know about a little show I’ve been doing for a few months now.
It’s called Tales from the Sanguine Isles, and it’s a live play Dungeons and Dragons
Campaign where I am one dwarf in an ensemble cast.
It begins at 6:30 eastern and I’d love for you to go to the link in the description to
watch it live on Twitch!
This video was made possible by these beautiful people, as well as the rest of my Patrons
over at Patreon.
I’d especially like to thank Don and Kerry Johnson as well as Kolbeinn Mani for their
generosity.
The theme song is by 12Tone and come back next time for more Step Back.