State revenue from antiquity to the modern income tax

This chapter contains a brief historical overview of state revenue generation from ancient times to the modern broad-based income tax system. In the past, some mix of wealth, income and ad valorem taxes were combined with other methods of government revenue generation such as the leasing or sale of public lands; granting of commercial charters; collection of tithes, property taxes and port taxes; sale of patents and licences; and borrowing. The historical timeline covers Roman tax farming companies, the societates publicanorum; the Florentine catasto of 1427, an early wealth tax; the 1710_17 French dixième, arguably the first income tax; evolution of the English property tax; the early English income tax of 1799_1816; and passage of the 16th Amendment to the United States (US) Constitution in 1913. The rise of the broad-based income tax during World War II is detailed, starting with the US ‘social taxation’ reforms of Franklin D. Roosevelt in 1935 and continuing to the neoliberal reforms of Prime Minister Thatcher in the United Kingdom and President Reagan in the US during the 1980s. These latter reforms facilitated the subsequent rise of globalization and international tax competition that has seen the rise of tax havens for tax avoidance and evasion by the wealthy. The chapter concludes with a discussion of globalization and the rise of international tax competition.