Strange and unfair taxes

This post was written on the day I lost my dearest Mam and so may not be quite up to my usual efforts but as the saying goes, time and chance happeneth to all so here it is.

It was over 200 years that U.S. colonists proclaimed ‘No taxation without representation’ but whether you live in a country with representation or not, no form of government is immune from inflicting taxes on its people.  If something is popular or better still necessary, then the government will try and find a way to tax it.  What’s worse most of us pay taxes on already taxed income.

In just over two weeks the British government is going to impose what has become popularly known as the Bedroom Tax.  It will affect low income families and individuals who currently receive financial support from the state.  Should they have more bedrooms in their home than is required for the number of people living in it, then they will face a reduction in their state provided income.  This is a plan by the government both to help bring spending into control but also as a way to free up housing stock and house people in appropriately sized homes to allow young families get a roof over their heads.

Opinion in the U.K. is divided between it being seen as part of a wider ethnic cleansing of the poor from expensive neighbourhoods to those who think such measures are nowhere near enough.

Already prominent politicians are urging that bedroom doors be bricked up or dividing walls demolished as a cunning way to avoid the scheme.   Already the bedroom tax is being compared to some of the other stranger taxes people have endured over the years.

Unfair taxes go back to the dawn of time, in Ancient Egypt, cooking oil was taxed.  To make it worse Egyptians had to buy their taxed cooking oil from the Pharaoh’s monopoly.  They were even prohibited from reusing previously purchased oil by state officials who would ensure they disposed of their existing oils.

In Ancient Rome, it was not uncommon for slave owners to free their slaves after a certain number of years of work or the payment of a certain fee. Slaves could pay that fee because many of them had the opportunity to work in several places, and thus could earn the money used to obtain their freedom. However as we all know, freedom brings responsibility and the Roman government required the newly freed slave to pay a tax on his or her freedom.

Being at the forefront of having a centralised and effective state, we in England have suffered our fair share of strange taxes.  When we were a republic for a few years, Oliver Cromwell placed a tax on Royalists, who were his political opponents and could take one tenth of their property. He then used that money to fund his activities that were aimed against the Royalists.

Obviously it can get pretty cold in England and as soon as it was feasible, people started having fireplaces in as many rooms as possible not just to keep warm but as status symbols, the equivalent of having flat screen TV’s in every room.  In 1660, the state placed a tax on fireplaces. The tax led to people covering their fireplaces with bricks to conceal them and avoid paying the tax. It was repealed in 1689.

Window tax, or glass tax, was introduced in England (and subsequently the whole of Britain) in 1696 during the reign of King William III. Eventually repealed in 1851, it was initially brought in as a way to tax people relative to their wealth while circumventing the vehemently opposed income tax.

Evidence of the the window tax can still be seen in Britain today. Many of the period’s surviving buildings feature bricked-up windows spaces, a common practice used to alleviate the tax burden on middle-class families.  The phrase ‘day-light robbery’ is likely to come from these times and is still used in situations where something is impossibly unfair.

If taxes on windows wasn’t bad enough, in the 1700’s, the British government placed a tax on bricks. Builders soon realized that they could use bigger bricks and so fewer bricks to pay less tax.  Inevitably the government eventually caught on and placed a larger tax on bigger bricks. Brick taxes were finally repealed in 1850.

In 1712 a tax was introduced on printed wallpaper and ignoring this tax was punishable by death! Builders avoided the tax by hanging plain wallpaper and then painting patterns on the walls.

In 1789, we suffered a tax on candles. People were forbidden from making their own candles unless they obtained a licence and then paid taxes on the candles they produced. The tax was repealed in 1831, leading to a the more widespread use of candles just as gas lamps became popular.

We still have a tax on televisions. If you own a television in your home, you must pay an annual fee, formally called a television license, for each television you own. Colour televisions are taxed at a higher rate than black and white televisions. Interestngly enough, if a person is blind an owns a TV in his or her home, he or she still has to pay the tax, but only half of it as they can still enjoy the television by listening to it.  Whilst some people don’t like the television licence, it is quite popular as taxes go.  This is because the tax is ring-fenced for the BBC which in theory can then produce expensive quality shows and shows that are not catering to popular and poor taste programmes.  It also means we escape having TV commercials on all the BBC channels.

Stupid taxes are popular in the USA too.  Wisconsin is one of the few states that levies a tax on internet access. When dial-up was a popular method of getting online, there was double taxation occurring because phone calls were also taxed.

Bizarrely, the state of Tennessee in 2005 began requiring drug dealers to anonymously pay taxes on any illegal substances they sold.

In 1885 Canada created the Chinese Head Tax, which taxed the entry of Chinese immigrants into Canada. The tax lasted until 1923 when a law was passed banning Chinese people from entering Canada altogether with a few exceptions.

Peter the Great’s was one of the greatest Tsars of Russia. He is said to have special advisors who thought up strange taxes such as on drinking water and beehives.  His most absurd proposal of all became law in 1705 and levied taxes on men for the great sin of growing beards. He did this because facial hair was very popular in Russia and he wanted his subjects to get with it a little more and imitate the clean shaved look of Western Europeans.   This is just one of the first taxes that were put in place to get people to change their behaviour.  Many countries now including the UK put extra taxes on objects such as cigarettes, vehicle fuel and junk food in what the state would say were efforts to improve the lives and environment of the people.

In Germany, bribery is a legal, deductible expense for private businesses as far as the Bundestag is concerned though there has been much talk or removing this option as many ordinary Germans are appalled that this could take place in their businesses and government.  Not many people actually take advantage of this tax break however as the tax forms require the naming of the person who is asking for bribes which kind of defeats the whole purpose.

Just last year the government got itself in an awful mess as sometimes taxes can have totally unexpected results. In the U.K. we have VAT, similar to a Sales Tax which is applied to luxury foods.  So biscuits don’t have VAT but cakes do as does hot foods but not foods that are sold hot as a side effect of their production such as fresh bread.  Last year the government initiated the awful “Pasty Tax”.

The government imposed VAT on the sale of hot takeaway baked snacks such as cornish pasties and sausage rolls.  This caused uproar and caused panic in the government when they were labelled as being out of touch taxing popular foods which they never ate themselves.  Chancellor George Osborne (Finance Minister) was forced to admit he couldn’t remember having this popular snack.  Prime Minister David always trying to show he isn’t as posh as he actually is told the media that he enjoyed Cornish Pasties and that he last one from a city centre train station store.  Things went down hill when it was revealed the store in question has closed years earlier and when opposition Labour leaders were filmed posing eating Greggs pasties and sausage rolls then it was only a matter of time before this stupid tax law was dropped just a few months later.

What governments and people often forget that they the government are representing us the people both those who voted and didn’t vote for them.  Though we are reliant on government services like roads, police and education, they are also reliant on not taking the pee out of the people.  Sure we pay a lot of tax on our fuel but as much as we need to get to work to do our jobs and get paid, the state also needs us to go to work and do our jobs.

The chart above shows how much tax people in the U.K paid on their vehicle fuel in 2011, it is now considerably higher.  From £1.28 pence per litre nearly 60 pence is Fuel Duty and a further 21 pence is VAT.  So we are paying tax on fuel twice from our already taxed income.  For readers in the United States there are 5 litres in a gallon so in 2011 we were paying about $10 per gallon and 60% of this was tax.

A poll tax (or head tax/capitation tax) is a fixed rate tax levied on individuals with no reference to income or property. Taxes of this type have been used since ancient times since their indiscriminate nature makes them easy to implement. This indiscriminate nature, however, also makes them hugely unpopular.

Probably the the most controversial and divisive  implementations of a Poll Tax occurred in the UK during the 1980s under Margaret Thatcher’s government. If you ever wonder what was it that removed Margaret Thatcher from the global scene, it wasn’t Trade Unions, Unemployment, Communism or even the year long Mining Strike that got rid of the Iron Lady but it was the Poll Tax. The effect of shifting the tax burden from the wealthy to the poor created a huge public backlash, resulting in mass protests, riots and the downfall of the Prime Minister.