History of Tax, Section Two: Tax and Greeks
W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…
The Greeks had two systems of taxation. One was liturgy, where wealthy citizens selflessly gave more to the government than they were told to. The second taxation method was named “tax-farming,” which had a long and colorful history. Tax farmers were private contractors who bid at public auctions for the right to collect a specific tax, for example, a harbor tax, an inn tax, or a sales tax. With precise records from prior years, and barring any misfortune, the amount of tax gain expected would be accurately calculated. The business was risky, but appears 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 was not a huge enterprise. To the Greeks, it was simply an economical way to collect taxes in a nation in which tax evasion was not worth the effort. The most grave abuse of the system came from the tax farmers.
The moderate system of tax farming, originally instituted by the city-states, contrasted strongly with the method of the late Greeks in the third to first century B.C. We see accounts of how the citizens twisted under the extreme oppression of the tax farmers. And this was previous to the time the Romans were around! The Greek democrats who instituted tax farming would have been astounded to learn that in a few hundred years their simple private collection method would evolve into a monstrosity of oppression. They would have been even more astounded, perhaps, to learn that tax farming was instituted in Western civilization, in many strange 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 Raleigh 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 laws. And we let legislators tax just about anything they please 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 shining point in the Greek story was in their administration of tax. Tax revenue was evaluated and administered by the taxpayers themselves, without the intervention of a massive government bureaucracy. Even more important was the response of the rich to the needs of the community. They shared 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 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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