"Nothing is certain except death and taxes." - Benjamin Franklin
Tax History
The earliest registration of formal taxation under the government was during 3000 BC. Egypt. "Scribes" were ordered by pharaohs to raise money in all sorts of ways, such as taxing households on cooking oil. I XNUMX. The book of Exodus states that one-fifth of all the crops will be handed over to the pharaoh.
Ancient Egypt
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It is believed that the income tax originated in Egypt, where Pharaoh collected taxes from the inhabitants to finance construction projects, local activities and grain storage. The pharaohs used taxes to enrich and stabilize society. Much of the grain collected by pharaohs and stored in warehouses was used to feed the poor in society and public workers. The inhabitants of ancient Egypt did not have minted money, so property and autumn taxes were imposed. Citizens can expect to pay the government once a year in the form of labor and grain, which will be stored in warehouses. Although pharaohs were the recipients of the taxes collected, they were not the ones to actually claim them. Instead, ministers called viziers were given the task of collecting taxes as they took on the roles of tax overseers. They made sure that the right amount of labor and grain needs were covered. (To find out more about the history of the tax in Egypt, read the article here.)
Rome and Greece
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- Parthenon Hellas
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Greece continued its tax practice as it overtook large parts of Europe, The Middle East and North Africa as the ordinary era got closer and closer. Taxes were often used for wars. One such tax was the eishpora, of which any remaining profits from it would be refunded after the end of a war. Another tax that Greece had is an Athens implemented on aliens (foreigners) which was called the monthly poll tax. Another European empire (Rome) increased the bounty of the empire by extracting homage (money given in gratitude or submission / fidelity from one party to another) from colonized people. Julius Caesar implemented a sales tax of one percent. To give the military members a pension fund, Augustus imposed an inheritance tax (imposed on the recipients of an estate - today the tax rate depends on the state the recipient (s) resides in, the value of the inheritance and the relationship the recipient has with the descendant. assessed on the estate as a whole and on itself before the distribution of inheritance, while the inheritance tax only taxes the recipients). However, the most lucrative tribute to both the Roman and Greek empires was human slavery.
China
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Outside of Europe, other civilizations took taxes, such as ancient China, which had one of the longest written records of all time. Authoritative figures (usually the military) who had the power to implement taxes created the first bureaucracies to collect and administer them. During some dynasties, state monopolies were imposed, with the monopoly on salt being particularly profitable and stable. Government revenues were earned through inflation, forced labor, expropriation of wealthy merchants and landowners, and commercial taxes, but commercial taxes were imposed only during wars. Yang Yen (a famous tax reformer) introduced an agricultural tax in 180 AD, as well as a progressive personal income tax. The salt tax, a tax system still used in present-day China, was first introduced during the Qin Dynasty sometime around 221 - 207 BC. Some of the taxes that are still implemented today, such as livestock tax, slaughter tax, market tax and customs duties, have existed for many years and traced all the way back to the time in ancient China.
Religious taxes
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Political institutions were not the only bodies that imposed taxes, but also religious ones. "Tithing" was a tax imposed on Christians when Rome fell, which was one-tenth of what members of the religion earned. The first way to give tithing was for the inhabitants to give a tenth of all their agricultural produce to Levitical or Aaronic priests (this was done during the first temple period). The tithe was later given to the Kohanim in contrast to the Levites at the beginning of the construction of the second temple. During this era, other sacrifices could only be consumed at the tabernacle, while the other tithe could be consumed anywhere. As Islam became more widespread, the "Khums" tax was imposed, equivalent to one-twentieth of what Muslims earned. Khums were practiced in Africa and Europe from the 8th century, respectively, when Muslim raiders took over some African communities and parts of southern Europe. Khums were practiced in Africa until the early 20th century. Muslim armies also raided non-Muslim communities / empires in India from the 10th to the 18th century. Portable property that had been looted and looted was exposed to the Khums.
The Mongol Empire
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In the 11th century, the Mongol Empire that had ignited large parts of Asia and had implemented tax policies that would affect the widespread production of goods such as cotton. The Mongols gave a lot of support to the peasant economy in China in the belief that the Mongols themselves would eventually profit as many extra tax revenues would be brought in. They implemented a fixed tax system for Chinese farmers that they did not want to deal with unpredictable and out of the ordinary taxes that they had in the previous system that they strongly disliked and disliked, to say the least. Under this new fixed tax system, farmers could predict exactly what is expected to be paid out of them.
English language tax and Renaissance taxation
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When all this happened, the word "tax" did not even exist in English and was just an official word in the 14th century (derived from the Latin word "taxare" meaning "to assess"). Before "tax" was used, a word from Old French "task" was implemented. Of which tax involved money from the issuing party and the task required labor.
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- Renaissance Sculpture from Florence, Photo Credit:Italian Renaissance Art
The rulers of Europe during the Renaissance era often collected money by imposing taxes on exports, imports, goods, wages, land, real estate and various other objects. The gable, a tax imposed on some goods, services, wages and criminal cases, was imposed in the 15th century by central and northern Italian cities. A salt monopoly, dogana, was also introduced, and it was a fairly profitable source of revenue for the government. The government controls both the price and the availability of salt. In times of adversity and distress, rulers increased the price of salt and forced the inhabitants to buy a certain amount of salt. Castato, an income tax introduced in Florence during 1427, in contrast to the ordinary income tax, the inhabitants were taxed not only on their wages, but on their entire wealth. Proceeds from Castatos were used to finance war. Meanwhile, in France, rulers only saw taxes as something temporary that should only be implemented in times of emergency, not in peacetime. In the late 14th century, public pressure forced the King of France to cancel all taxes. To compensate for this decline in total revenues, the monarchs resort to debusing, which is the process of reducing the amount of precious metal in the coins used as currency. Tallie (land tax imposed on the peasants and non-noble people of France during the Ancien Régime era - This was imposed on every household and the amount to be paid to the government depended on how much land the household occupied) became the main source of state revenue for the French government in the late 15th century. King Louis XI (1461 - 1483) earned two-thirds of the state's revenue from Tallie. Although wine and salt were taxable goods during his time, they were not as lucrative as they were in Italy.
Income Tax in America
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More on the subject of war - personal income tax in America was first signed by Abraham Lincoln during the Civil War (Revenue Act of 1862). It was repealed after a decade. Congress once again tried to introduce a federal income tax that the Supreme Court declared unconstitutional. Before the 20th century, most federal taxes came from customs duties, although taxes were levied on various goods. Finally, in 1909, personal income tax was allowed with the introduction of the 16th Amendment. The 16th Amendment allows Congress to levy income tax without distributing it among states on the basis of population. It was listed as a result of the 1895 Supreme Court case by Pollock v. Farmers 'Loans &Trust Co (for more information on Pollock v. Farmers' Loans &Trust Co click here.). When Congress proposed the 16th Amendment to the states, conservative Republican leaders were concerned that the amendment would not be ratified, but a coalition of Democrats, progressive Republicans and other groups ensured that the required number of states ratified the amendment. Congress then introduced a federal income tax with the Revenue Act of 1913.
History of Corporate Tax in America
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In the early years of America, businesses were only in the form of sole proprietorships and partnerships, so business owners were taxed individually on ordinary income taxes. When companies first appeared, the government taxed the companies as their own entities instead of taxing individual owners. Some companies were taxed on income while others were taxed on dividends distributed. The United States first introduced corporation tax in 1894, but companies did not take it well and challenged it in court, and it was repealed after a year. It was reintroduced in 1913. The government was careful this time by setting the tax rate at only 1% and gradually increasing it to 15% over the years. During World War II, tax rates rose sharply. National security was of great importance in this era, and therefore the government taxed units more, especially companies. Corporation tax accounted for a large part of central government revenue. During 1968, it accounted for 50% of government revenue!
Modern tax principles
1. The rational combination of direct and indirect taxes:the use of different types of taxes that take into account not only the income of each individual taxpayer, but also the total wealth of each individual taxpayer.
2. Universalization of taxation:Fair and equal reference requirements for each payer and a fair way of implementing tax deductions regardless of where the income came from, type of activity or economic sector. It is unethical to impose additional taxes, increased and differentiated rates or tax deductions for different types of ownership, organizational or legal structures of the entity, citizenship of natural persons or other factors. It is also unacceptable to impose taxes based on political, economic, ethnic factors, etc.
3. One-off taxation:this applies to one or more items that can only be subject to one type of taxation once for a certain period of time as specified by law.
4. The scientific approach to determining the exact tax rate:this involves setting the tax deduction rate at a point where the payer has enough money to take care of their necessities and purchases that are relevant to his life. It is unethical to invest in short-term interests in order to determine revenue for the state, which in turn will slow down / adversely affect economic development or negatively affect taxpayers' best interests.
5. Stability:the persistence of taxation for a long time and easy to deduct from the payment. The law should dictate the tax rates and should only be revised periodically.
6. Differentiation of tax rates:corresponds to the level of income, which must not be an inhibiting progression. There should also be no individualisation of rates, which is the basic principle of the market.
7. The application of a tax deduction system:leads to the use of investments in entrepreneurship and will also serve the role (s) as social justice, such as a minimum standard of living for members of the population. Remuneration should be introduced not only for certain payers, but should be the same for each payer.
the conclusion
Taxes have evolved a lot over time. From a form of currency that is not used to pay taxes to basic accommodation principles for how to tax are implemented worldwide. Taxes have been used for the purpose not only to enrich the state they are imposed, but also to help countries in emergencies such as crisis or war. Taxation, even though it was organized throughout its history, is even more structured and organized today. It is absurd to think that wars are thanks to many of the treasures we have today.