Taxing Times

It is that time of year. Next month we must pony up taxes, so now is the moment to assemble our documentation. To some degree it is always that time of year. Property taxes are due quarterly (in most jurisdictions) while there is never respite from sales taxes, phone taxes, energy taxes, etc. But income taxes are due April 15 – this year April 17, actually, because the 15^th falls on a Saturday. I use a professional to file. This year (sorry to say) the numbers are so simple that I don’t really need one, but there have been years when they were not simple at all. It is best, therefore, to have a history of my records in one place, just in case they get complicated again, so I continue to employ the same accountant.
 
Taxes are as old as civilization. Arguably, taxes are the primary business of civilization. Taxes always at bottom have been a protection racket. The ancient Sumerian peasant tolerated the predations of the local king because they were less than the predations of lawless bandits against whom in principle the king offered protection. (If either predation became too severe, the peasant could head for the hills to hunt and gather instead, though that becomes an ever harder choice the more one has to lose.) The king, of course, got wealth and power out of the deal. The initial problem was how to calculate taxes in the absence of money. Civilization dates to some 3000 BCE but coinage didn’t come along until the 7^th century BCE in the West – a few centuries earlier in China though little of the early Chinese “spade currency” was gold or silver, and so was closer to being fiat money. The solution was payments in kind (pigs, goats, bushels of wheat) and labor (an obligation to work for the king in fields or on walls or whatever for a given term).
 
As economies became monetized so did taxes. By the time of the Romans we have recognizable tax collection: property taxes, inheritance taxes, port taxes, sales taxes, and poll taxes. Julius Caesar added a gross income tax: complex income taxes with deductibles and profit/loss statements were too difficult to administer at the time, so the tax was on gross revenue; whether you made a profit or not was your problem. China favored granting monopolies on certain goods and services while taking a piece of the action in return.
 
The American Revolution was famously a tax revolt as was to a large degree the French Revolution. The irony in both countries is not lost on current taxpayers. One sometimes hears that income taxes were unConstitutional in the US prior to the adoption of the 16^th Amendment in 1913. This is untrue. They did, however, require a complex apportionment among the several states based on the census. The 16^th Amendment eliminated this speed bump: “The Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.” That is pretty open-ended.

While I have my own opinions on the use and misuse of tax policy both for government funding and social engineering, I won’t carry on about them here. I’ll just write what checks may be due to the Treasury and the State of NJ. I do suspect, however, that we are closer than one might think to fully digitized currency. (I wrote a short story based on this called Fool's Gold.)  Not long after, the feds and state will simply deduct what taxes they want when they want. I’m sure we’ll get an e-statement.

 

Johnny Cash – After Taxes