Brief History of Tax


Egyptian peasants seized for non-payment of taxes. (Pyramid Age)

The first known system of taxation was in Ancient Egypt around 3000–2800 BC, in the First Dynasty of the Old Kingdom of Egypt.[3] The earliest and most widespread forms of taxation were the corvée and the tithe. The corvée was forced labor provided to the state by peasants too poor to pay other forms of taxation (labor in ancient Egyptian is a synonym for taxes).[34] Records from the time document that the Pharaoh would conduct a biennial tour of the kingdom, collecting tithes from the people. Other records are granary receipts on limestone flakes and papyrus.[35] Early taxation is also described in the Bible. In Genesis (chapter 47, verse 24 – the New International Version), it states “But when the crop comes in, give a fifth of it to Pharaoh. The other four-fifths you may keep as seed for the fields and as food for yourselves and your households and your children”. Samgharitr is the name mentioned for the Tax collector in the Vedic texts.[36] In Hattusa, the capital of the Hittite Empire, grains were collected as a tax from the surrounding lands, and stored in silos as a display of the king’s wealth.[37]

In the Persian Empire, a regulated and sustainable tax system was introduced by Darius I the Great in 500 BC;[38] the Persian system of taxation was tailored to each Satrapy (the area ruled by a Satrap or provincial governor). At differing times, there were between 20 and 30 Satrapies in the Empire and each was assessed according to its supposed productivity. It was the responsibility of the Satrap to collect the due amount and to send it to the treasury, after deducting his expenses (the expenses and the power of deciding precisely how and from whom to raise the money in the province, offer maximum opportunity for rich pickings). The quantities demanded from the various provinces gave a vivid picture of their economic potential. For instance, Babylon was assessed for the highest amount and for a startling mixture of commodities; 1,000 silver talents and four months supply of food for the army. India, a province fabled for its gold, was to supply gold dust equal in value to the very large amount of 4,680 silver talents. Egypt was known for the wealth of its crops; it was to be the granary of the Persian Empire (and, later, of the Roman Empire) and was required to provide 120,000 measures of grain in addition to 700 talents of silver.[39] This tax was exclusively levied on Satrapies based on their lands, productive capacity and tribute levels.[40]

The Rosetta Stone, a tax concession issued by Ptolemy V in 196 BC and written in three languages “led to the most famous decipherment in history—the cracking of hieroglyphics”.[41]

In the Roman Republic, taxes were collected from individuals at the rate of between 1% and 3% of the assessed value of their total property. However, since it was extremely difficult to facilitate the collection of the tax, the government auctioned it every year. The winning tax farmers (called publicani) paid the tax revenue to the government in advance and then kept the taxes collected from individuals. The publicani paid the tax revenue in coins, but collected the taxes using other exchange media, thus relieving the government of the work to carry out the currency conversion themselves. The revenue payment essentially worked as a loan to the government, which paid interest on it. Although this scheme was a profitable enterprise for the government as well as the publicani, it was later replaced by a direct tax system by the emperor Augustus; after which, each province was obliged to pay 1% tax on wealth and a flat rate on each adult. This brought about regular census and shifted the tax system more towards taxing an individual’s income rather than wealth.[42]

Islamic rulers imposed Zakat (a tax on Muslims) and Jizya (a poll tax on conquered non-Muslims). In India this practice began in the 11th century.


Numerous records of government tax collection in Europe since at least the 17th century are still available today. But taxation levels are hard to compare to the size and flow of the economy since production numbers are not as readily available. Government expenditures and revenue in France during the 17th century went from about 24.30 million livres in 1600–10 to about 126.86 million livres in 1650–59 to about 117.99 million livres in 1700–10 when government debt had reached 1.6 billion livres. In 1780–89, it reached 421.50 million livres.[43] Taxation as a percentage of production of final goods may have reached 15–20% during the 17th century in places such as France, the Netherlands, and Scandinavia. During the war-filled years of the eighteenth and early nineteenth century, tax rates in Europe increased dramatically as war became more expensive and governments became more centralized and adept at gathering taxes. This increase was greatest in England, Peter Mathias and Patrick O’Brien found that the tax burden increased by 85% over this period. Another study confirmed this number, finding that per capita tax revenues had grown almost sixfold over the eighteenth century, but that steady economic growth had made the real burden on each individual only double over this period before the industrial revolution. Effective tax rates were higher in Britain than France in the years before the French Revolution, twice in per capita income comparison, but they were mostly placed on international trade. In France, taxes were lower but the burden was mainly on landowners, individuals, and internal trade and thus created far more resentment.[44]

Taxation as a percentage of GDP 2016 was 45.9% in Denmark, 45.3% in France, 33.2% in the United Kingdom, 26% in the United States, and among all OECD members an average of 34.3%.[45][46]


In monetary economies prior to fiat banking, a critical form of taxation was seigniorage, the tax on the creation of money.

Other obsolete forms of taxation include:

  • Scutage, which is paid in lieu of military service; strictly speaking, it is a commutation of a non-tax obligation rather than a tax as such but functioning as a tax in practice.
  • Tallage, a tax on feudal dependents.
  • Tithe, a tax-like payment (one-tenth of one’s earnings or agricultural produce), paid to the Church (and thus too specific to be a tax in strict technical terms). This should not be confused with the modern practice of the same name which is normally voluntary.
  • (Feudal) aids, a type of tax or due that was paid by a vassal to his lord during feudal times.
  • Danegeld, a medieval land tax originally raised to pay off raiding Danes and later used to fund military expenditures.
  • Carucage, a tax which replaced the Danegeld in England.
  • Tax farming, the principle of assigning the responsibility for tax revenue collection to private citizens or groups.
  • Socage, a feudal tax system based on land rent.
  • Burgage, a feudal tax system based on land rent.

Some principalities taxed windows, doors, or cabinets to reduce consumption of imported glass and hardware. Armoires, hutches, and wardrobes were employed to evade taxes on doors and cabinets. In some circumstances, taxes are also used to enforce public policy like congestion charge (to cut road traffic and encourage public transport) in London. In Tsarist Russia, taxes were clamped on beards. Today, one of the most-complicated taxation systems worldwide is in Germany. Three-quarters of the world’s taxation literature refers to the German system.[citation needed] Under the German system, there are 118 laws, 185 forms, and 96,000 regulations, spending 3.7 billion to collect the income tax.[citation needed] In the United States, the IRS has about 1,177 forms and instructions,[47] 28.4111 megabytes of Internal Revenue Code[48] which contained 3.8 million words as of 1 February 2010,[49] numerous tax regulations in the Code of Federal Regulations,[50] and supplementary material in the Internal Revenue Bulletin.[51] Today, governments in more advanced economies (i.e. Europe and North America) tend to rely more on direct taxes, while developing economies (i.e. several African countries) rely more on indirect taxes.






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