The History of Tax, Part 2: Tax Systems and Ancient Greece
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
The Greeks had two methods for taxing their people. One was liturgy, where wealthy citizens generously gave more to the government than they were forced to. The other system was called “tax-farming,” which had an extended and interesting history. Tax farmers were private citizens who bid at public auctions for the right to gather a specific tax, for example, a a tax on ships, a tax on inns, or a sales tax. With precise records from prior years, and barring any misfortune, the amount of tax gain expected would be accurately calculated. It was a risky business, but seems to have been profitable. In the city-states, tax farming proved a better method to government taxation. The private contractor did a better and more economical job of gathering taxes.
The right of tax collection is a huge delegation of sovereign power. But considering that taxes were low in Greek democracies, tax farming wasn’t a major enterprise. To the Greeks, it was a simple economical method of collecting taxes in a nation in which tax evasion was not worth the effort. The most serious abuses of the system came from the tax farmers.
The moderate method of tax farming, at first set up by the city-states, was completely different from the method of the later Greeks in the 3rd to 1st century B.C. There were numerous accounts of how the citizens groaned 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 disgusted to see that in a few hundred years their simple private collection system would evolve into a monstrosity of oppression. They would have been even more astounded, perhaps, to find out that tax farming flourished in Western civilization, in many bizarre forms, for 2,500 years, finally 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 pillars of civilization in the ancient world and had an interesting view on taxation and government. The Greeks stated that the liberty and freedom of a society was best measured by its tax system. We, 2,500 years later, are less intelligent in our analysis of taxation. We seem to accept any tax passed by our legislators. We allow class politics create tax legislation. And we let legislators tax just about anything they want in any way they desire. If you’re 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 assessed and administered by the taxpayers themselves, without the intervention of a gigantic government bureaucracy. Even more important was the response of the rich to the needs of the community. They spread their wealth with the community and didn’t 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/
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