Ancient Egyptians paid taxes too
It’s worth noting that regular periodic taxation (typically annual, including but not limited to income taxes) were an important check on bad government. As late as the high middle ages (1400s) at least, governing classes would exact taxation by taking wealth from the taxpaying classes, always under the implied threat of the sword, whenever they needed money. Medieval chronicles are filled with tales of the nobility returning again and again to take wealth from towns, merchants, and the poor, often several times in a given year. Read Barbara Tuchman’s A Distant Mirror for numerous heartbreaking and infuriating examples.
This was a ruinous practice and it became increasingly clear a better system was needed.
Regularly-scheduled taxes you can plan for, and that are difficult to increase arbitrarily, are much easier to live with, even if they are heavy when they are assessed.
Business worked out how to game the system. If a message conveyed only one or two bytes of information (in the modern sense), the sender could color code it directly on the envelope and the recipient would glance at it, get the message and refuse delivery. Then someone had the bright idea of allowing prepaid mail to go at half the rate. This is, I believe (I have inferred it and if anyone can either confirm or refute it, I would appreciate it) the reason that, even today, postage due is collected at twice the rate.
In 1628 Charles I revived the largely disused and forgotten levy of Ship Money as a revenue mechanism which was not considered a tax and hence required approval of Parliament. Previously when ship money had been levied it was in time of war and on maritime cities demanding that they either provide ships and equipment for the war effort or the money for the Crown to obtain them.
The Ship Money mechanism went through a couple of iterations but eventually Charles levied his tax on all counties with payment to be enforced by distraint (seizure of goods & chattels).
The natives didn’t take to the idea particularly well either.
But the example of Ship Money is more nuanced than that and illustrates an important wider point.
Since the Anglo-Saxon period English governments had collected various forms of direct taxes on wealth, of which the most recent had been the subsidies (‘tenths’ and ‘fifteenths’). What however those had never done was to apply consistent tax rates. Instead fixed sums would be demanded from each administrative unit, starting with the county and then working downwards. How those sums were divided up was decided by local custom and/or local (dis)agreement. At the bottom, officials would turn up in a village and expect to collect a fixed sum from the whole village. At that point an attempt (in theory) would be made to demand appropriate sums from each householder according to their ability to pay. This however was usually based less on precise calculations and more on a general sense of who had the most money. That someone equally wealthy in another village in the next county might be paying far less was irrelevant. Contemporaries were fully aware that, especially over time, this could produce significant disparities. It nevertheless tended to be easier just to use the old apportionments.
Ship Money in the 1630s was collected using the same system. But for various reasons, including the fact that for inland counties it was a novelty, serious attempts were made to apportion the sums more fairly. At the time this caused a huge fuss and there are many historians who would argue that it was this, not the principle, that was most controversial. Yet those apportionments were the one thing about Ship Money that survived. The Long Parliament later used them for the (much larger) direct taxes it imposed to pay for the Civil War. They only fell out of use because the English government subsequently moved over more to indirect taxes. The radical thing about Pitt’s income tax was not so much that it revived the idea of a direct tax on wealth but that it did so on the basis that taxpayers would be assessed individually according to consistent rates.
There are wells along the Nile in some locations; the one that comes to mind for me is in the temple grounds in Kom Ombo south of Luxor. There is a spiral staircase down the inside and an underground link to the Nile. The higher that the Nile floods, the higher the water comes up the stairs. Since the flooding Nile left a layer of fresh fertile silt on the fields, this roughly determined the size of the harvest, and hence the tithe or tax due from the farmers. This was almost 2,000BC.
The short answer is that until people worked for wages, around the industrial revolution, there was no point in collecting money taxes. For the vast majority of the population who produced agricultural products, “taxes” (or sharecrop rent, or whatever it was characterized) consisted of the local Lord simply taking his share (I.e. almost all) of the product. As the economy changed and cash became more common, taxes were levied on whatever could be easily counted and intercepted. Most famously, tea arriving in Boston was taxed - because the harbor master could easily track any cargo coming in. One reason many European countries before the 1800’s looked to expand their empires was to get their own goods. Colonies were forbidden from trading with other countries directly, or taxed through the wazoo to do so. Anything coming in from outside the empire was also heavily taxed. Businesses in towns could be taxed because they were easy to track. In the days before computer, or cheap paper for files, most tax collecting was a franchise operation. The local lord taxed his subjects, paid a portion to his lord, who paid a portion to the King. Even in biblical times, this was an easy model. Local tax collectors (like one of the apostles - Matthew?) were hired to collect from their area by any means, and this collection flowed upward. Being a governor meant collecting your cut before sending the rest to Rome, so governorships were prized positions.
from Montesquieu’s Persian Letters, Letter 24:
Off topic but I’ve read that businesses used to also game the telegraph system. You were charged per word for telegrams. So people started publishing code books so a single word would be used to convey a long message.
As an example, the message “Competitors are selling here at a better price” was reduced to the word “niftt”.
Standing armies were relatively rare through most of Europe and the Middle East’s history; yearly temporary levies, tributary levies or free mercenaries were much more common in general. For most soldiers it was either a part-time or part-year job, or the only thing available in times of disaster (famine, plague, particularly nasty wars). They became normal around the time of the Industrial Revolution.
One of the ways to pay taxes was by having local lords train their own men and bring a levy from their land when their overlord needed one. It was a chain of services rather than hard cash, but then, tributes would also often be collected in terms of a fraction of what your land produced (vegetables, animals, cured meats). Or the tributary could pay for mercenaries, if the recipient considered that adequate.
Basically, in he days before computers or even cheap and ubiquitous paper, taxing was usually done against easy to count, easy to track items like imports and exports, amount of land, etc. Or fixed rates…
One item I read was that in France at one time cities taxed people on the number and width of their windows - since big house, plenty of very expensive glass, etc. implied ability to pay more taxes. Hence the old French architectural styles included tall narrow windows to reduce taxes.
Another common form of taxation was in the form of labor. The Incan empire had a well-organized system of mandatory work for part of the year:
I have heard that in areas around the Mediterranean property taxes are assessed /re-assessed when the construction/remodeling of a home is complete. So there are many homes that people have been living in for years, but there is one room or wing still ‘under construction’ – they add another brick to the wall each month. So still working on it, but never completing it, so taxes not assessed.
How to pay for government expenditure (or the king’s expenditure, which for most of history amounted to the same thing) was often a difficult problem. Customs duties was an obvious tactic, since imports were usually pretty visible if they were on a commercially remunerative scale, and for unsophisticated politicians imports were generally held to be a ‘bad thing’ anyway since the money spent on them left the country. If they were commodities, which the country couldn’t (or wouldn’t) do without, like alcohol or tobacco, or coal, then it was a guaranteed money-raiser for government.
As mentioned above, tax farming, which involved contracting out the raising of the tax to private entrepreneurs in exchange for getting a part of the sum they could hope to raise up front, was also attractive in an age when the enforcement mechanisms available to central government for gathering tax were rudimentary.
Eventually the concept of deficit financing, based on selling Treasury bills bearing a rate of interest, with the principal sum repayable at some date in the future (or not … Consuls has been running since the 18th c. and itself represents a consolidation of earlier government debt) began to be the more important method of raising money
Terry Pratchett had a wonderful parody of commercial codes in Good Omens:
Yeah, Gaiman was coauthor, but I bet most of the funny parts were by Pratchett.
Wasn’t much of pre-20th century American government financed by the sale of land to settlers? A rather unique and ephemeral situation to be sure, but advantageous nonetheless.