Tax history

Type

The driving force behind tax innovation was the state’s constant lag behind economic development and the constant need to catch up and adapt to new conditions. States have always strived to be at the center of economic activity, but economic activity has never stood still, its center has taken on more and more new forms. If at the very beginning of the history under study the main economic values ​​were land and labor for cultivating it (respectively, tax on persons, land tax, corvee, slavery), then the modern state would go bankrupt if it did not change the type of its taxes.

The tax-setting government faces the question of what to tax (tax base) , how much to charge (tax rate) , how to calculate (tax office) , and how to minimize the negative impact of taxes on economic activity (tax policy) .

When turning to the history of taxes, a general trend is identified - the priorities of the state's tax policy justified by economic development and the main innovations, and also tax curiosities are highlighted - specific historical examples of certain taxes, which, while entertaining, allow us to grasp the essence of the issue.

To understand the logic of tax development, the history of taxes is usually divided into five stages.

The first taxes were taxes on basic assets : land, livestock, workers. Another source of tax revenue—the tax on the vanquished—can rather be attributed to “state entrepreneurship,” if we consider conquest as a project with its own costs (armies) and income (one-time tax on the vanquished and constant tribute or taxes). The first taxes are sometimes referred to as sacrifices . All of these taxes were direct , that is, they were levied directly on individuals receiving income, conducting transactions, and owning property. These taxes were collected by the secular and spiritual authorities independently, respectively.

In Ancient Egypt, the main income was payment for the use of land owned by the head of state. In Ancient Greece, the main tax was income tax, but free citizens of cities did not pay it. Instead, citizens made voluntary donations, and only in emergencies (war) a set percentage of income was collected from them.

In Ancient Rome there were practically no taxes. As long as Rome remained a city-state, public expenses were met by leasing public lands. The state apparatus supported itself. The elected magistrates who were elected not only performed their duties free of charge, but also contributed their own funds to public needs on a voluntary basis, considering this honorable. In emergency cases (war), citizens of Rome were taxed on their property; for this, once every five years they submitted to elected officials-censors a statement about their property and marital status, on the basis of which the amount of tax (qualification) was determined.

In the Roman Empire, the main source of income was a land tax , amounting to 10% of income from a plot. Other forms of land taxation were also used, such as a tax on the number of fruit trees, including vines. Property and means of production were taxed: real estate, live equipment, valuables. Each resident of the province had to pay a single poll tax for all. There were also indirect taxes (passed on to buyers of goods): turnover tax - 1%, a special turnover tax on the trade of slaves - 4%, tax on the liberation of slaves - 5% of their value. In 6 AD Emperor Augustus introduced an inheritance tax at a rate of 5%. Only Roman citizens were subject to inheritance tax. The tax was targeted. The funds received were used to provide pensions for professional soldiers.

With the development of the division of labor and the growth of cities, the tax system was significantly enriched. identified by researchers, At the second stage, or fishing taxes arose taxes on production on all types of economic activity, except agricultural (land tax was levied). The production tax was calculated as the right to engage in the relevant activity (a fee depending on the size of the enterprise in fixed assets or employees) - a license as a share of income (part of the price), or deductions from operations - less often. are widespread In trade, customs duties and indirect taxes - taxes on sales of specific types of goods (they are called indirect because, being taxes on the production and import of goods, they are paid by consumers, and not by producers or importers).

In general, this stage of taxation development was characterized by a huge number of taxes and the inclusion of a wide range of objects in the tax base, including the most exotic ones. The state established a great variety of taxes, and the collection of the taxes themselves was often farmed out . With all the abundance of taxes, you had to be clever enough to make money from collecting them and still stay alive. The whole system caused many complaints from his subjects. Thomas Aquinas called taxes a legalized form of robbery. The system was maintained thanks to the power of coercion and the exemption from taxes of the main pillars of power - in ancient times the aristocracy and priesthood, and in the Middle Ages the nobility and clergy.

A characteristic model of behavior of states at this stage was to take the tax system of the Roman Empire as a basis and “enrich” it with new forms of taxes . So in the Byzantine Empire until the 7th century. inclusively, the list of direct taxes contained 21 types: land tax, poll tax, taxes on equipping the army, tax on the purchase of horses, tax on recruits (the payment of which was exempt from military service), duty on the issuance of state acts, etc. There was a fine for exceeding the established dimensions of the building, the so-called. "air tax". Taxes were paid by senators, as well as officials and military officers who received promotions. Extraordinary taxes were widely practiced: for the construction of a fleet, etc.

An interesting invention of Europe was the “house tax”. We are talking about a property tax; a tax introduced in England, calculated by the number of hearths, was later levied by the number of windows. Also in Europe, this tax was calculated based on the length of the facade, etc. All this left a strong imprint on the architecture of Europe.

A special role was played by indirect taxes, which placed a burden on buyers. Taxes on bread, meat, salt, wine, etc. have been widespread in Europe since the 13th-14th centuries. The peculiarity of indirect taxation is its regressive nature - the lower the income, the larger part of it is occupied by the tax. It was indirect taxes that caused the greatest discontent, like the famous “salt riots.”

appeared It was during this period of “tax arbitrariness” that the institution of tax immunity . If free citizens of ancient states paid freely and in emergency cases they paid taxes, then the aristocracy and priesthood (later the nobility and clergy) enjoyed tax immunity. For them, the state, on the contrary, was a source of income, and not an item of expenditure. In the UK, members of the royal family still enjoy tax immunity.

“Tax arbitrariness” often led to open forms of disobedience. One of the first disobedients remembered by history in Great Britain was St. Hugh (1140–1200) of Lincoln. He refused to pay taxes to Richard the Lionheart and thereby earned himself a place in history. According to N. Turgenev: “Taxes, or, more precisely, bad tax systems, were one of the reasons, as can be seen from history, that the Netherlands became independent from Spain, the Swiss from Austria, the Frieslanders from Denmark, and, finally, the Cossacks from Poland. .."

Later, the struggle of the North American colonies for independence was largely caused by two tax initiatives of the mother country: the introduction of a stamp duty on each resident of the colonies (1763), affecting all business documentation, and the granting of the East India Company the right to duty-free import of tea into the North American colonies (1773). The ensuing Boston Tea Party incident was associated with the interests of the American colonists, but it greatly strained relations between the colony and the mother country.

The great variety of taxes and the arbitrariness of the authorities in their collection did not lead to an increase in their collection and constituted a significant brake on economic growth; in addition, the consequence was constant tension within states and the manifestation of disobedience. At the turn of the XVII–XVIII centuries. European authorities began to understand this and move to a simpler, clearer, more convenient and stable tax system. The state itself also strengthened, which began to represent not only a military and political force, but also a strong administrative bureaucracy. At the third, transitional stage , priorities in the tax base shifted from taxation of many objects to unified personal taxes, unified indirect taxes and taxes on sales of enterprises. Significant assistance to the authorities was provided by economists who began to study the problem and look for opportunities for the most effective taxation for society.

Tax collection moved from tax farmers to officials. Most of the taxes were provided by indirect taxes - excise taxes (deductions from a unit of goods regardless of its price), as well as per capita and income taxes.

The government needed not just a system for collecting and tax rates, it needed a scientifically sound theory that would combine fairness of taxation - justification of taxes with efficiency - maximum benefit for the whole society. Adam Smith made his contribution to the creation of the theory of taxation. At the end of the 18th century, in 1776, in his work “An Inquiry into the Nature and Cause of the Wealth of Nations,” he not only asserts that taxes are beneficial to society and this is a sign of freedom of citizens, not slavery, but also defines the basic principles of taxation that are still relevant today por:

The principle of justice - “The subjects of the state should, as far as possible, according to their ability and strength, participate in the maintenance of the government, that is, according to the income that they enjoy under the patronage and protection of the state.”

Principle of certainty - “The tax which every individual is liable to pay must be certain and not arbitrary. The payment deadline, payment method, payment amount - all this must be clear and definite for the payer. ...The uncertainty of taxation develops impudence and promotes corruption of that category of people who are already not popular even if they are not distinguished by impudence and corruption.”

Principle of Convenience - “Every tax should be collected at the time or in the manner when and in what manner it should be most convenient for the payer to pay it.”

Principle of Economy —Every tax should be so conceived and designed that it takes and retains from the pockets of the people as little as possible beyond what it brings to the public treasury. By obliging people to pay, he may thereby reduce and even destroy the funds that would enable them to make these payments with greater ease. ...An unreasonable tax creates a great temptation for smuggling.”

The fourth stage in the development of taxes occurred in Europe in the 19th century. and was associated with the rise of production and the economy associated with the concentration of production - the consolidation of economic units, the rapid growth of cities, as well as the study of the problem of taxation over a fairly long period. The state has changed its priorities in taxation. The main object of taxation was turnover - the transfer of values ​​from one subject to another. have been developed Turnover taxes . Citizens felt the inheritance tax in a tangible way . have been extended Transaction taxes . have also become widespread Taxes on capital - mainly on its growth in the form of interest on securities or deposits, dividends on shares, and growth in the value of assets.

With this stage, interest in taxation systems fades away. Tax systems in different countries are becoming more and more similar to each other. The ingenuity of the authorities is severely limited, on the one hand, by decision-making procedures, and on the other hand, by the development of economic theory in terms of taxation.

The fifth stage in the development of taxation was due to the predominant development of the financial sector, as well as the improvement of financial management and control methods. With the separation of the owner's function from the management function, technologies were developed that allow the owner to control the objects of his property through finance. Auditing, consulting, and investment companies have developed, providing a wide range of services to capital owners. The state also took advantage of the latest economic achievements. More transparent accounting of enterprises allowed not only to collect more taxes, but also to make them fairer and more efficient. The ideas and practice of the welfare state determined taxes in the fifth stage of their development. On the one hand, the authorities sought to reduce and optimize the tax burden, on the other hand, ever-increasing social expenses required ever-increasing revenues.

The most widespread are taxes on the value newly created by an economic entity, primarily value added tax , or a combination of profit tax and income tax . This combination differs from value added tax mainly in that in the first case it is facilitated by depreciation. Along with taxes on value created, targeted taxes have spread - taxes, the collection of which is intended for the production of specific public goods, such as social insurance, public health care and pensions, road construction, guaranteeing small deposits, etc.

The development of taxes at the fifth stage was complemented and determined by the development of economic theory. First of all, this is the theory of the public sector - a sector that produces public goods that are not profitable to produce privately for various reasons: non-competitiveness (the profitability of production is such that it excludes the emergence of a second producer of the good - natural monopolies , for example, urban infrastructure, defense) and non-excludability (impossible limit consumer access to goods, for example public transport, a telephone in every home, roads). Economists were concerned not only and not so much with questions of tax collection, but with questions of production: what citizens received in exchange for taxes, how to most effectively organize the production of public goods in exchange for taxes. The foundations of public sector economics were laid at the beginning of the twentieth century; in the last decade, this discipline has received special development.

The theory of the public sector has enriched the principles of taxation introduced by A. Smith in terms of the effective use of taxes in the production of public goods and the non-distorting effect on the economy . Today they sound like this:

Relative equality of obligations . Tax differentiation is carried out according to clear criteria that are related to the results of the activities of the subjects, and not to their constant qualities. Within this principle, there are two approaches to taxation. The principle of benefits received - the difference in taxes is determined by the difference in the received utility. The principle of solvency - the difference in taxes is determined by the difference in the ability to pay them; this approach has been and remains the leading one, due to the technical and technological difficulties of applying the first. Regardless of the approach to taxation, two fairness criteria must be met. Horizontal equity: equality of payouts for everyone who is in the same position in terms of the chosen approach. Vertical equality: tax differentiation should clearly reflect differentiation in terms of the chosen approach. This principle is intended to reveal the principle of justice.

Economic neutrality . The tax inevitably makes adjustments to the economic activities of subjects. The principle of economic neutrality states that the impact of a tax on the production of goods in the private sector, on the distribution of resources between economic entities and on their behavior should be minimal. Similar to the principle of “do no harm,” this principle calls for the sake of producing specific public goods not to touch anything else in the economy—the principle of efficiency.

Organizational simplicity . The costs of collecting taxes themselves should be minimal.

Flexibility . Flexibility is the ability of the tax system to adequately respond to changing economic conditions.

Controllability of taxes by payers . Taxpayers around the world have almost come to believe that they are deducting money in order to get something for it. Tax control is the best way to reinforce this view. appeared and exist It is for this reason that marked taxes —taxes with targeted use.

Like A. Smith's principles, these principles cannot be fully implemented at the same time, however, when developing tax systems, they are guided by them, reaching a compromise between these principles and the need for public spending financed by taxes. The theory and practice of the public sector have enriched society with new forms of state, semi-state and private institutions that provide public goods on an understandable basis. First of all, these are state and non-state pension funds, the development of transparent charitable organizations, etc.

TRANSITION TO A SINGLE INCOME TAX RATE COMMENTS

Question: “Do you think the transition to a single income tax rate was beneficial for the country’s economy, harmful, or did not have any impact on the economy?”

	Russians in general	Question: “Suppose one citizen’s income is 3,000 rubles, and another’s is 15,000 rubles. If the state charges a tax of 10%—300 rubles—from the first citizen, then what should the tax from the second citizen be in fairness?”
		same amount of income	same share	large share of income	I find it difficult to answer
Helpful	24	31	32	18	12
Had no impact	30	24	30	32	25
Harmful	12	7	9	16	9
I find it difficult to answer	35	37	29	34	53

Of course, it is not easy for the average citizen to assess the impact of last year’s “revolution” in the tax system on the country’s economy - more than a third of those surveyed were unable to answer this essentially “expert” question, and almost the same proportion of respondents believed that the transition to a single income tax rate was not had no impact on the economy. But it is significant that if supporters of progression are almost equally inclined to recognize this influence as beneficial and harmful, then supporters of proportional taxation make an optimistic verdict almost four times more often than a pessimistic one.

However, regardless of which taxation principle the respondents prefer, they are united by the belief that ensuring tax discipline depends entirely on the efforts of government bodies, since our compatriots will not voluntarily pay any taxes, even the most fair ones.

“Question: I would also like to hear your opinion on how taxes will be paid - will they, will they not, in full?

Nadezhda: No, they will hide it anyway.

Marina: Of course they will.

Boris: No. They will still hide it. In principle, workers have two salaries in many organizations: black and white. Officially it costs 500 rubles, but the other one costs more. That’s all” (Novosibirsk).

• "I have an uncle. He pays taxes: for example, instead of one and a half thousand, he pays 150 rubles to the state. Is he a fool, that tomorrow he will pay one and a half, 10 times more? He will also pay 150 rubles, and that’s it. Well, maybe 200. There are no fools” (Novosibirsk).

• “ Anton: They have a different mentality in the West, they live differently. They don't even think about how to hide taxes. This has always been and will always be the case in Russia, because Russian people live this way. Even if a Russian leaves for the West, he still does something cunning, clever, and still does not pay taxes. It's not a matter of consciousness.

Andrey: Russians are just very smart people. They are trying to invent everything” (Novosibirsk).

• “It’s already ingrained in our bones - if they give us relief now, they’ll still cover us. Maybe someone has developed a new mindset - not to hide. But I need to be sure that if I pay, they will protect me from this, this and this” (Samara).

• “Even if they allowed him to pay less taxes, he will still hide, because it is already in the blood” (Samara).

• “Everyone sees that those who do not pay live well. He may not sleep at night, but he lives well. And the one who sleeps well at night has nothing to hide, he has nothing. And we won’t be able to do this with any slogans or reformations” (Samara).

© Public Opinion Foundation, 2002

From Moses to the Present Day On the History of the Federal Income Tax in the United States