Tax

A tax is a compulsory charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (e.g., tribes, secessionist movements or revolutionary movements). Taxes could also be imposed by a subnational entity.

Historical taxation levels

Quite a few records of the government tax collection in Europe since at least the 17th century are still available today. But the taxation levels are hard to compare to the size and flow of the economy since production numbers are not as readily available. The government expenditures and revenue in France during the 17th century went from about 20 million livres in 1600 to about 60 million livres in 1650 to about 150 million livres in 1700 when the government debt had reached 1.6 billion livres.

Related Topics:
Production - Livres

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The taxation as a percentage of production of final goods may have reached 15%-20% during the 17th century in places like, France, the Netherlands, and Scandinavia. During the war filled years of the eighteenth and early nineteenth century tax rates in Europe increased dramatically as war became more expensive and governments became more centralized and adept at gathering taxes. This increase was greatest in England, Peter Mathias and Patrick O'Brien found that the tax burden increased by 85% over this period. Another study confirmed this number, finding that per capita tax revenues had grown almost six-fold over the eighteenth century, but that steady economic growth had made the real burden on each individual only double over this period before the industrial revolution. Average tax rates were higher in Britain than France the years before the French Revolution, but they were mostly placed on international trade. In France the taxes were lower but the burden was mainly on landowners, individuals, and internal trade and thus created far more resentment.

Related Topics:
France - Netherlands - Scandinavia - Peter Mathias - Patrick O'Brien - French Revolution

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Taxation as a percentage of GDP is today (2003) 56.1% in Denmark, 54.5% in France, 49.0% in the Euro area, 42.6% in the United Kingdom, 35.7% in the United States, 35.2% in The Republic of Ireland, and among all OECD members an average of 40.7%. (OECD national accounts) (Forbes magazine)

Related Topics:
GDP - Denmark - France - Euro - United Kingdom - United States - Republic of Ireland

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Historical forms of taxation

In monetary economies prior to fiat banking, a critical form of taxation was seigniorage, the tax on the creation of money. Seigniorage has been replaced by central banking.

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Other obsolete forms of taxation include:

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• scutage - paid in lieu of military service; strictly speaking a commutation of a non-tax obligation rather than a tax as such, but functioning as a tax in practice
• tallage - a tax on feudal dependents
• tithe - a tax, or more precisely a tax-like payment, (one tenth of one's earnings or agricultural produce), paid to the Church (and thus too specific to be a tax in strict technical terms even though appearing as one to the payer)
• Aids - During feudal times Aids was a type of tax or due paid by a vassal to his lord.
• Danegeld - medieval land tax originally raised to pay off raiding Danes and later used to fund military expenditures.
• Carucate - tax which replaced the danegeld in England.
• Tax Farming - the principle of assigning the responsibility for tax revenue collection to private citizens or groups.

Some principalities taxed windows, doors or cabinets to reduce consumption of imported glass and hardware. Armoires, hutches and wardrobes were invented to evade taxes on doors and cabinets.

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Today the most complicated taxation-system is the German one. Three quarters of the world's taxation-literature refers to the German system. There are 118 laws, 185 forms and 96000 regulations (only one comment to taxation covers 2671 pages). The administration spends 3.7 billion Euro just to collect income tax.

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