A people’s history of taxation – an abstract for a paper
Posted by John, July 28th, 2015 - under People power, Tax.
Tags: A people's history of taxation
This is an abstract I have drafted for a paper on tax, war, democracy and revolution. It is early days yet – I have just started doing the research – and the Conference is six months away so I hope to be finished before then. The history is necessarily truncated, and so will be a potted history.
Each area of examination deserves its own much deeper and thorough analysis but that would lose the sweep of history I am trying to capture. And I only have about 30,0000 words. It will be an important part of my PHD. I would be grateful for any suggestions, thoughts, comments, especially about useful works on the various areas mentioned in the abstract below I am looking at.
John
What is striking in the battles over tax or those rebellions sparked by tax is that at their heart they are struggles for democracy, or depending on the societal and historical context, democracy for a minority, one section of the hostile brothers if you like, challenging the governing body, another section of the hostile brothers.
Struggles over tax or struggles sparked by tax have been about a say in what a ruler or autocratic government does in both its right to extract money from the various classes and its spending of that money. In earlier times that say was demanded by sections of the ruling elite, and in times of acute crisis the common people joined the battle, often encouraged by a section of the hostile brothers to help them win.
However tax battles and battles sparked by tax are not just about some general ideas of democracy and representation. They are the struggles of particular classes for democracy and representation. The combatants in these battles often start off as sections of the elite themselves wanting to rein in the taxing power of the sovereign and to ensure there is some common consent (narrowly understood to be consent among sections of the exploiters or the ruling class) to taxation. The danger to all of the ruling class is that the common people, the oppressed and exploited, may themselves mobilise around the struggles that sections of the hostile brothers have unleashed, especially if one or both sides appeal to them for support.
As feudalism developed and the first signs of capitalism arose in the interstices of the system, the common people entered more and more onto the stage of history, not as adjuncts to the elite and their pursuits of limited democracy and limited representation, but as the bearers of ideas for a new society based on equality and common ownership. Their visions of democracy frightened and threatened (and still do) the ruling classes. The depth of representation the oppressed and exploited classes demand challenges the rule of the oppressors.
In this article I will also look at the new fiscal sociology and the idea that the history of taxation has been a history of the development of the tax state. I argue that this is a top down view of history and ignores the role of the common people in the shaping of tax history. This article then is a small contribution to a people’s history of taxation, drawing on tax, war, and the growing role of the common people in the historic events of the Magna Carta, the Peasants’ Revolt of 1381, the English Civil War, the American revolution, the French Revolution, the impact of the Napoleonic Wars and the drivers for income tax in the United Kingdom, the role of colonialism, the spark for Eureka stockade, the impact of World War I and II on tax in Australia and the role of social democracy in quelling people’s rebellions over tax (and indeed other matters) in Australia.
Comment from Brian
Time July 28, 2015 at 11:49 am
Don’t Tax Me, Tax the Rich!
We all have to pay tax. There are various forms of taxation including stamp duty, rates, levies and income tax.
We have two general forms of taxation. One is a Goods and Services Tax (GST) the other is Income tax. A GST taxes everyone who buys goods or services.
An Income Tax, in principal is a scaled tax where the more you earn the more you pay. Many people argue “don’t tax me, tax the rich” The people paying the most tax argue, “It should be a user pays system, if you use a government service, you should pay for it (e.g. tolls on freeways)”
The various governments (Federal, State and Local) raise money via taxation to supply services to the public (roads, schools, hospitals, and defense)
We should all pay our fair share of taxes for the goods and services we get.
Don’t complain you are paying too much tax. However do look for legitimate ways to reduce your tax. Walt Disney once said “You’ll know when you have made it, when you owe a million dollars in tax”
David Kamerschen, a professor of Economics at the University of NSW told a story of how our taxation system works and how “taxing the rich more” is not the answer.
Suppose that every night, 10 men go out to dinner at their favourite restaurant. The bill for all 10 men comes to $100. They decide to pay the bill, the same way as we pay our taxes. So the bill was split:
• the first four men paid nothing (the poorest)
• The fifth paid $1
• The sixth paid $3
• The seventh paid $7
• The eighth paid $12
• The ninth paid $18
• The tenth (the richest) paid $59
All were very happy with this arrangement, until one day, the owner of the restaurant said, “Since you are such good customers, I will reduce the cost of the bill by $20 so dinner for 10 will cost only $80.”
The group still wanted to pay the bill, the same way we pay our taxes. The first four men where unaffected. They would still eat for free.
But how could they divide up the $20 discount so everyone would get their fair share?
Simply dividing $20 by 6 would give the men $3.33 each, but that would mean the fifth and sixth men would be paid to eat (which all agreed was unfair)
So the owner suggested reducing each person’s bill by roughly the same percentage.
This meant:
• The fifth man paid nothing (like the first four) instead of $1
(a saving of 100%)
• The sixth man paid $2 instead of $3 (33% saving)
• The seventh paid $5 instead of $7 (28% saving)
• The eighth paid $9 instead of $12 (25% saving)
• The ninth paid $14 instead of $18 (22% saving)
• The tenth paid $49 instead of $59 (16% saving)
Each of the sixth was better off, the first four continued to eat for free as did the fifth man, but outside the restaurant, the men started to compare their savings.
“I only got $1 out of the $20 discount” complained the sixth man as he pointed to the tenth man “and he got $10”
“That’s right,” said the fifth man. “I only saved a dollar as well; it’s unfair he got ten times more than me”
“Yes” said the seventh man, “why should he get $10 and I only got $2? The wealthy people get all the breaks”
“Wait a minute” said the first four in unison. “We didn’t get anything at all. The system exploits the poor” The nine men surrounded the tenth and beat him up.
The next night, the tenth man did not show up for dinner. The other nine sat down and ate without him, cheerfully agreeing, they had taught the wealthy tenth man a lesson.
However, when it came time to pay the bill, they discovered that they didn’t have enough money between all of them to meet even half the bill!
This is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they may not show up at the table anymore.
There are lots of good restaurants in Monaco and the Caribbean. (Which have very low or no tax)
So taxing the rich more is not the answer.