Taxes have generally been around since the beginning of civilization or history. The earliest known tax was implemented in Mesopotamia over years ago, where people paid taxes throughout the year in the form of livestock the preferred currency at the time. The ancient world also had estate taxes and taxes. Since then, the way we pay taxes has changed significantly. However, some ancient taxes have survived across history and persisted into the modern world.
In , China eliminated what was the oldest, still-existing tax in the world. It was an agricultural tax that had been created 2, years ago and was only eliminated in order to improve the well-being of rural farmers in China. Learn about unusual taxes throughout history. In the United States, the tax system has evolved dramatically throughout the nation's history. Originally, there wasn't an income tax and tariffs provided the main source of revenue for the government.
New taxes were often introduced during times of war to raise additional revenue, but they were generally allowed to expire once the war was over. Taxation in the United States' history can be traced back to Colonial America when the colonists were heavily taxed by Great Britain on everything from tea to newspapers.
In , the Stamp Act even specified that all legal and business documents were required to bear a stamp, showing that the appropriate tax had been paid. Most colonists objected to this form of taxation since they had no political voice or input about the creation of new taxes. This gave rise to the slogan "no taxation without representation. The history of income tax in America is an unusual one. The first federal income tax was created in during the Civil War as a mechanism to finance the war effort.
The Bureau of Internal Revenue placed excise taxes on everything from tobacco to jewelry. Following the end of the Civil War, the income tax did not have substantial support and was repealed in In the early 20th century, the income tax enjoyed renewed support and, in February of , the Sixteenth Amendment to the Constitution was ratified, granting Congress the power to tax personal income.
The new system collected the income tax at the source, as it is done today, where taxes are initially withheld before the income reaches the recipient. In the Bureau of Internal Revenue released the first income tax form, called Form This still remains the main income tax form and it has been modified and re-issued almost every year since then learn about the evolution of Form The first year was a test run where people simply sent in their forms to have them checked by the bureau for accuracy without paying any taxes.
New patterns of capital and wealth accumulation brought on by industrialization necessitated new forms of taxation. Treasury Department. However, the policies underpinning the income tax and taxes on wealth, in general, have been in constant flux over the last century. Around World War I, only 5 percent of the American public was paying any tax on income, generally reserved for only the highest earners.
This quickly changed as wars and economic developments put new pressures on the federal budget. Franklin D. From the World War II period through the s, the highest earners could pay up to a 94 percent tax on part of their income; however this era also introduced deductions and exemptions for various individuals and businesses.
With the development and expansion of welfare programs like Social Security, Medicare and Medicaid, the second half of the 20th century saw a tax system that only became more complex and nuanced. An increasing reliance on revenues from wealth and consumption taxes, in the U.
Organized resistance and legal protest against the income tax coalesced in the U. Another common constitutional argument regards the tax return process as a form of mandated self-incrimination and thus a violation of the 5th Amendment. Still others simply object to taxes in general or the income tax specifically on moral, religious or conspiratorial grounds. Taxation, as well as skepticism and resistance to it in some form, has evolved from a practical necessity to a signifier for political and social identity.
Taxation has emerged from a practical financial issue to one with myriad political and social implications. If taxes are here to stay, there is no doubt that debates and discussion on the subject will continue to exist as a focal point of global society.
What is The Transition Tax? Exploring the Relationship Between Taxation and Innovation. Tax havens can create considerable problems, particularly for overall economic growth and accounts r Read More about How to Become a Tax Accountant: Education and Other Employment.
Tax havens can create considerable problems, particularly for overall economic growth and accounts r Read More about What Are Tax Havens? Our business school has built and sustained a legacy of excellence for nearly years.
We have a strong global network. We attract some of the best and brightest faculty and student talent from all over the globe. In the general election of Sir Robert Peel opposed income tax, but once elected he reimposed it, reducing customs duties at the same time. In the general election of , both Gladstone and Disraeli opposed income tax.
Disraeli won, but the tax stayed. As taxation increased, so the right to vote and the principle of democratic consent were extended, culminating in universal adult suffrage. At the start of World War One in , the standard rate of income tax in Britian was 6 per cent; by the end of the war in it was 30 per cent.
An Excess Profits Tax was levied on companies benefiting from war production. Government borrowing soared. It was only after Pearl Harbor, and the US entry into World War Two, that the Revenue Act of subjected millions of new taxpayers to income tax and gave rise to a whole new taxpaying culture. Great expectations also followed World War Two. Meanwhile, demand for public services gave rise to such things as the National Health Service in Britain and new forms of taxation to pay for them.
Scandinavia led the way as the proportion of national wealth devoted to public expenditure and services rose towards a half. The use of taxation to redistribute wealth and even out the inequalities of capitalism in the West became an ideological weapon in the Cold War. Corporate globalization was, in any event, making it more difficult for nation states to exercise control or collect taxes , rather than compete with each other to offer the most favourable rates.
In Russia, the tax rap became a nationalist tool against oligarchs and foreign businesses. Public expenditure as a proportion of national wealth has not fallen in rich countries. Military expenditures have still not been reduced significantly.
In poor countries, revenues for desperately needed public services remain minimal. This article is from the October issue of New Internationalist. You can access the entire archive of over issues with a digital subscription. Subscribe today ». Patreon is a platform that enables us to offer more to our readership. Support us ». New Internationalist is a lifeline for activists, campaigners and readers who value independent journalism. It is free to read online — please support us so we can keep it that way.
Support us » Support us » Support us ». Subscribe Ethical Shop. Beards, boots, beehives, candles, nuts, hats, horses, chimneys, water — Tsar Peter taxed them all. This is the eternal fate of taxation: to be the abused or abusive means towards noble or ignoble ends, never quite able to escape its association with extortion and war. Help us produce more like this Patreon is a platform that enables us to offer more to our readership.
X New Internationalist is a lifeline for activists, campaigners and readers who value independent journalism. Related Articles. Tax havens in the Global North enable the systematic looting of the Global South.
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