As I explained in Taxes, part one, taxes are a necessity. However, there are different types of taxation, and some are more just or practical than others. The earliest type of ‘tax’ was a corvée, or head labor requirement. Corvées were used to provide the labor for the Great Pyramids of Egypt, the Great Wall of China (under the Qin dynasty), and formed the basis of the feudal system of government.
In the modern day, corvées are seen by most who encounter the idea as barbaric and unjust. But why is this?
To address this question, we regard the two major ways in which tax systems have changed from ancient and classical times to the present. Firstly, the accepted method of payment has changed from concrete labor to abstract currency. This is a major factor in the seeming backwardness and impracticality of corvées. However, rounding up every single citizen and making them pay a certain fixed sum to the government, called a head or capitation tax, still strikes us as somehow too general, unfeeling, or simply unfair. In fact, Article I, Section 9 of the United States Constitution specifically prohibits capitation taxes by name.
The other gradual but important historical change in tax policy was the advent of proportionality. (I am not using the word here to refer specifically to “flat” taxes, rather to the proportional concept in general.) This is simply the principle that not everyone should pay the same amount; that not everyone even has the ability to pay a capitation tax equally; that corvées, head taxes, and any other tax policy that fails to consider payment ability is simply unjust.
Most tax policies seen today in the modern United States pass the test of proportionality. However, a blind eye must not be turned to the anomalous and arbitrary practice of property tax policy, specifically real estate taxation. This taxation, carried out mainly by state and local governments, does not in fact consider the proportionality principle. Ownership of a parcel of property does not guarantee the ability to pay a certain specific amount of money – property cannot be, in general, directly or indirectly translated into income – or vice versa. Therefore, real estate taxation is biased against the lower classes of society (it is an example of regressive taxation), because the upper classes, in practice, will be able to pay any such tax, whereas the poor may not have a sufficient source of income. Income and sales taxes avoid this problem by taxing money specifically earned or used.
Again, taxation systems more closely follow the principle of proportionality in modern times than in any other eras of history. However, America’s tax policy still contains injustice, to which I will later present possible remedies. #