History and Taxation: The Dialectical Relationship between Taxation and the Political Balance of Power

Book Overview

This book explores the fascinating history of tax, investigating the historical relationship between taxation and the political balance of power. As well as exploring pivotal tax moments throughout history, including notable examples such as the Eighty Years’ War between The Netherlands and Spain, the Glorious Revolution, the Boston Tea Party and the French Revolution, this publication analyzes how both Nazis and communists manipulated established tax systems (structures for collecting revenue) to achieve their objectives during the 20th century.

Key Themes and Topics

This book investigates the historical relationship between taxation and the political balance of power. The main objective is whether a dialectical relationship between taxation and the political balance of power exists or not.

Historically, those in power often leverage taxes to not only sustain their authority but also, if feasible, expand their influence. This, in turn, may provoke a counter-reaction, leading to a synthesis marked by a renewed balance of power by new tax structures. The ensuing tax system can spark resistance with profound political implications. This supposed dialectical relationship is examined through experiences across 26 states, offering insights from a distinctive overview of historical tax events. Notable examples include the Eighty Years’ War, the Glorious Revolution, the Boston Tea Party, and the French Revolution, many of which are connected to the well-known principle of "no taxation without representation." Initially interpreted as “no taxation without the consent of the elite,” this principle evolved over time to emphasize “no taxation without a formal law adopted by the parliament.”

Recent trends indicate a growing disconnection between people and political institutions, in particular with national parliaments. This poses a threat to the established balance of power, potentially impacting taxation dynamics. The book provides abundant evidence of dictators exploiting tax systems to suppress perceived enemies and enforce societal reforms. Notable examples from the 20th century include repressive taxes in national-socialist and communist regimes, including taxes on personal income. While iconic tax events have supported democracy and citizen emancipation, the concept of “democratic taxes” sometimes leads to threats to democracy, e.g., when these taxes conflict with the equality principle or do not sufficiently respect the minorities’ rights or fundamental rights.

The first personal income tax imposed by Congress in 1861 was designed to raise revenue for the Civil War. The practice of paying taxes has been a constant throughout history, with early forms of taxation such as livestock and estate taxes in ancient civilizations like Mesopotamia and Egypt.

The book is structured in three parts:

Part 1: A General Report with overarching conclusions.

Part 2: Seven thematic reports exploring specific tax-related issues, including income tax systems, tax brackets (ranges of income subject to different tax rates), and the concept of taxable income (income subject to taxation after deductions).

Part 3: 26 national reports providing detailed country-specific information on historical federal taxes, sales taxes (levied on the sale of goods and services), and tax laws.