Taxation

Evidence shows that some form of taxation existed in Mesopotamia and neighboring regions of the Near East at the time that written records appeared in the late fourth and early third millennia b. c. So it is safe to assume that at least some people in these areas paid taxes even earlier. Whenever taxation began in Mesopotamia, it was long based on a core principle relating both to religious faith and the inherent powers of local rulers. This principle stated that the land and soil, forests and marshes, and rivers and lakes were created by the gods; and the gods had entrusted the maintenance of these resources to their earthly representatives, the kings and high priests. With the consent of the gods, the kings and priests had the right to tax ordinary people for using these resources. Thus, no matter what kind or burden of taxes a ruler chose to inflict on his subjects, he could always fall back on the argument that the system was not of his making; rather, it was sanctioned by the gods and therefore was an inevitable part of the natural order.

As for the forms of taxation imposed, during much of ancient times coins did not yet exist. (Coins first appeared in Lydia in western Anatolia during the midfirst millennium b. c.) Also, most people did not have the means of acquiring large quantities of silver and other precious metals with which to pay their taxes. So for a long time most taxes took the form of goods and services. The most common form of goods used to pay taxes were crops and livestock, of which a farmer often paid the government 10 percent of what he raised. The services used to pay off a tax burden included military service and labor on state-sponsored construction projects. Some men were obliged to assemble, go on campaigns, and fight when the king announced his need for soldiers. Other people, both men and women, worked on construction gangs or as artisans for new canals, temples, palaces, city walls, and so forth. Modern scholars call this form of work, which fulfilled a person’s tax obligations to the state, corvee labor. (Though some construction work was performed by slaves, the bulk of it was usually accomplished by free laborers.) In addition, merchants often paid extra taxes, in the form of duties or tolls, when they passed with their goods through pivotal cities or regions. The rate of these duties varied from place to place and from era to era, but it seems most often to have been about 10 percent or somewhat more.

With the rise of empires from the late third millennium b. c. on, by sheer necessity tax collection became a huge task that required hundreds or thousands of government officials and tax collectors. The first imperialists in Mesopotamia, the Akkadians, introduced the idea of the central government imposing taxes on its outlying provinces. Taxes were levied, often in kind, on crops, animals, trade goods, and various craft products. Later the Assyrians used a similar system, but they often hired people, in a sense as subcontractors, to go out and collect the taxes. The subcontractors were expected to provide the central government with a certain minimal amount of revenue, but the manner in which the taxes were gathered was left to the collectors. This quite naturally led to corruption, as the subcontractors often extorted far more than was fair from the impoverished masses and kept the extra revenues for themselves. This corrupt system led to widespread fear of tax collectors, hatred of the government, and likely contributed over time to the decline of the Assyrian Empire.

Under the Persians, who controlled Mesopotamia and other parts of the Near East after the fall of Assyria, taxation was somewhat different. Persian citizens were exempt from taxation. And the burden of taxes fell on the inhabitants of foreign lands conquered by the Persian kings. During the reign of King Darius I (ca. 522486 B. C.), almost half of the entire revenues needed to run the empire came from taxes collected in Egypt and western India. Over time, however, some regions of the Persian realm fell into what is often termed tax debt. In such situations, residents or local rulers were unable to pay their taxes in full and tried to make up the shortfall by borrowing money or goods, usually at high interest rates. In many cases this only plunged them further into debt. Tax debt was one of the reasons that on occasion Near Eastern rulers declared tax moratoriums, essentially allowing people to erase their debts. The reasoning behind such a moratorium was that it was necessary in order to keep large sectors of society from falling so far into debt that they hurt overall national prosperity.

See Also: government; money and banking; slaves and slavery