A brief history of tax troubles for monarchs and the people
The title of this article is a quotation that has become part of our culture, and is generally used to convey the idea that paying taxes is unavoidable. The quote is generally attributed to Benjamin Franklin in 1789 , although in 1716 Christopher Bullock, an English actor, is on record as having said” “Tis impossible to be sure of anything but Death and Taxes.”
Not much is known about the financial systems in place in Roman Britain. But a document from 7th or 8th century Anglo-Saxon England, The Tribal Hidage, shows the government used land taxes in order to raise money for their expenses. Land was divided into hides, and this measurement was used in order to evaluate tax payments from the populace. It is unclear exactly how this method was calculated, but we do know that the tax obligations were already in force, and the revenue obtained was officially destined to military service, fortress work and bridge repair. By 1202, a customs tax payment, amounting to 15 % of the the total value, had been introduced to be paid on all imports and exports.
In 1381 the imposition of a third poll tax in the space of 5 years brought years of economic discontent to a head, resulting in the Peasant’s Revolt led by Wat Tyler. Despite its name, this uprising was a widespread revolution throughout England involving not only rural workers, but the urban working class and wealthier artisans. The rebels stormed the Tower of London and beheaded the Lord Chancellor and other instigators of the poll tax. The revolt was eventually neutralised and some 1,500 rebels were killed. Nonetheless, this event did serve as a deterrent for Parliament against further taxes on the people.
Henry VII, the first Tudor monarch, stablised the economy and increased the revenue received by the Crown. He did not, however, collect heavy land taxes in times of peace, and concentrated his efforts on obtaining funds from the nobility. Henry VII also encouraged trade as this meant an increase in revenue from customs tax. During the reign of Henry VIII, Cardinal Thomas Wolsey, the Lord Chancellor, raised heavy taxes through Parliament to fund the English troops fighting against France, which contributed to his unpopularity and caused widespread discontent. Nevertheless, on the whole, Henry VIII was astute enough to suspend or abandon extra tax collection if it seemed likely to be troublesome. His daughter, Elizabeth I, followed this example during her reign and was loathe to tax the public harshly as she feared this would cause public resentment and alienate supporters.
The Petition of Right
Fast forwarding to the Stuart period, in 1628, one of England’s most important constitutional bills was passed through Parliament, the Petition of Right. Charles I was demanding huge sums of money to continue with what became known as the Thirty Years War in Europe. The Petition of Right placed limitations on non-parliamentary taxes, amonst other restrictions aimed at the king, and this parliamentary bill played a significant role in the constitutional events leading up to the English Civil War and the subsequent beheading of Charles I. Once England was under Oliver Cromwell’s rule, public taxes were gradually decreased, although if he deemed it necessary, Cromwell saw fit to raise taxes without consent, overriding the Petition of Right which he had helped to create. In 1655 he also introduced Decimation Tax . This tax payment was aimed at his enemies, Royalists or suspected Royalists, and the income received from these charges, although not in force for a long period of time, was used to fund divisions of reserve armies, tasked with keeping order.
Introduction of income tax
At the end of 1798, the incumbent Prime Minister, William Pitt the Younger introduced a progressive income tax, whereby an individual’s wealth was assessed to pay the necessary proportion,the proceeds of which were destined for expenditure on the French Revolutionary War. This is commonly regarded as the beginning of the British income tax system today. Although it was abolished and restored more than once, the Income Tax Act of 1842 firmly re-established the model and it has remained part of British fiscal procedures ever since.
An Anglo-Saxon economy is so-called as it is generally practised in English speaking countries, where governments use low level taxation and few restrictions in order to stimulate economic growth, following a free market model with its orgins in the 1700s. There are supporters and critics of this financial system but, to come full circle, in the words of Benjamin Franklin, “in this world nothing can be said to be certain, except death and taxes.”