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History of Taxation, Section Two: Tax and Greece
By plrprousers | December 3, 2009
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
The Greeks had two ways of taxing their people. One was liturgy, where wealthy citizens unselfishly contributed more to the government than they were required to. The other system was called “tax-farming,” which had a long and colorful history. Tax farmers were private citizens who bid at public auctions for the right to collect a certain tax, for example, a harbor tax, an inn tax, or a sales tax. With precise records from previous years, and excluding some misfortune, the amount of tax revenue expected would be accurately calculated. It was a risky business, but seems to have been profitable. In the city-states, tax farming was deemed superior to government tax administration. The private man did a better and more economical job of gathering taxes.
The right to collect taxes is an extreme delegation of sovereign power. But considering that taxes were low in Greek city-states, tax farming was not a huge industry. To the Greeks, it was a simple economical way to collect 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 modest system of tax farming, originally created by the city-states, contrasted strongly with the method of the later Greeks in the 3rd to first century B.C. We see accounts of how the citizens 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 learn that in a few hundred years their small private collection method had evolved into a monster of oppression. They would have been even more astounded, perhaps, to learn that tax farming was instituted 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 pillars of civilization in the ancient world and had an interesting view on taxes and government. The Greeks said that the liberty and freedom of a society was most accurately measured by its tax system. We, 2,500 years later, are less profound in our analysis of taxation. We seem to accept any tax passed by our legislators. We allow class politics create tax laws. And we let legislators tax just about anything they want in any form they want. 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 story was in their administration of taxes. Tax revenue was assessed and administered by the taxpayers themselves, without the intervention of a massive government bureaucracy. 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 ideas.
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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