W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
The Greeks had 2 methods for taxing their citizens. One was liturgy, where wealthy citizens unselfishly contributed more to the government than they were forced to. The second taxation method was named “tax-farming,” which had an extended and interesting history. Tax farmers were private citizens who placed bids at public auctions for the right to collect a certain tax, for example, a harbor tax, an inn tax, or a sales tax. With accurate records from previous years, and excluding any misfortune, the amount of tax gain expected would be accurately calculated. The business was risky, but appears to have been profitable. In the city-states, tax farming seemed a better method to government taxation. The private contractor did a better and more economical job of collecting taxes.
The right to collect taxes is an extreme delegation of sovereign power. But since taxes were low in Greek city-states, tax farming wasn’t a very large industry. To the Greeks, it was simply an economical way to collect taxes in a system in which tax evasion was not worth the trouble. The most grave abuse of the system were from the tax farmers.
The moderate method of tax farming, at first set up by the city-states, contrasted strongly with the system of the late Greeks in the 3rd to first century B.C. We see accounts of how the world twisted from terrible oppression of the tax farmers. And this was before the Romans were around! The Greek democrats who instituted tax farming would have been astounded to see that in a few hundred years their simple private collection method would evolve into a monster of oppression. They would have been even more astounded, perhaps, to learn that tax farming flourished in Western civilization, in many bizarre methods, for 2,500 years, eventually going out of style in the early 1900’s. Go here if you want help with modern-day Tax Preparation, bookkeeping, and payroll in Cary NC
Greeks were giants in the ancient world and had an interesting take on taxes and government. The Greeks stated that the liberty and freedom of a society was most accurately measured by its tax system. We, 2,500 years later, are less intelligent in our analysis of taxation. We tend to accept any tax adopted by our legislators. We allow class politics create tax laws. And we let legislators tax just about anything they please in any form they desire. If you are feeling the pressure with today’s taxes, call a Raleigh NC CPA for all your tax-related needs!
Overall, the bright spot in the Greek history was in their administration of taxes. Tax revenue was evaluated and administered by the taxpayers themselves, without the intervention of a massive government bureau. Perhaps more important was the response of the rich to the needs of the community. They shared their wealth with the community and did not hesitate to see that the city and its people benefited from the bounties bestowed on them.
The Greek view was simple – taxes are tyrannical, and hence illegal, if they are demanded by arrogance and compulsion. They are justifiable when based on reasonableness and loving care. We have retreated a great distance from those lofty ideals.
Keep an eye out for W. Marc Gilfillan’s next chapter in his History of Taxes series: Taxes and The Rosetta Stone.
http://www.marccpa.com/