Silly taxes historically made for clever dodgers
Tess Vigeland: A few centuries ago a French finance minister described the art of taxation as “akin to plucking a goose with a minimum of hissing.” Judging by the hue and cry from taxpayers at this time of year, it’s still a rare art. Governments are in a constant struggle to persuade citizens to part with their cash. In some cases, they’ve resorted to some pretty bizarre — not to say silly — taxes.
Our European bureau chief Stephen Beard reports from London.
Stephen Beard: Britain’s tax code may be the world’s most complex; it’s certainly one of the longest.
Steve Woodmore reading Britain’s tax code
Proving the point, here’s Steve Woodmore, the world’s fastest talker, reading the British tax law aloud.
After 30 hours, he was less than a quarter of the way through. Emma Boone of the Taxpayers’ Alliance, who organized the stunt, said it would take Steve five days and nights to complete the task.
Emma Boone: That’s how long our tax code is! Largely because of all these extra little funny taxes and exclusions and things like that.
The history of taxation is the story of a long struggle between governments desperate to raise taxes and citizens equally eager to dodge them. Down the centuries, this has led British governments to try to tax almost anything that moved.
John Whiting: Things like wigs, and hair powder and playing cards and female servants.
John Whiting of the Chartered Institute of Taxation. His personal favorite: The window tax, imposed in 1696.
Whiting: What it was trying to say is: If you’re wealthy,if you’ve got a big property, you can afford to pay a bit more tax. Now, hang on a minute! How do we assess the property? I know, the tax inspector can go around and count the number of windows!
But Stephen Coleclough of accountants PwC says the window levy provoked the inevitable reaction.
Stephen Coleclough: We had a lot of people bricking up windows to avoid the tax. Very early tax avoidance scheme, that.
And says John Whiting it actually became fashionable to have bricked-up windows.
Whiting: There are even cases where houses were built with installed blocked-up windows, so you kept up with the tax avoiders.
But dodging crazy taxes could be harmful to health. Take the notorious Hearth Tax levied in the seventeenth century. Anyone with a fireplace was liable. Emma Boone says some householders took dangerous, evasive action.
Boone: People were trying to conceal their chimneys, or take down their chimney or tunnel through into their neighbors’ chimneys.
With, on at least one occasion, fatal consequences.
Boone: A baker had been trying to hide his hearth and had been using his neighbour’s chimney and started a fire. And that killed four people.
But here’s the dumbest, most self-defeating British tax in living memory — which does have one distinction.
The Beatles: Let me tell you how it will be…
It provoked this reaction from the Beatles.
The Beatles: There’s one for you, 19 for me.
In this hit song, the Beatles complained about the top rate of income tax they were suddenly paying: 98 percent. This so-called “Super Tax” drove hundreds of wealthy artists and entrepreneurs into exile. Others stayed in Britain, but spent a fortune dodging the tax. This levy, says Emma Boone, broke the first rule of intelligent taxation.
Boone: If you make the taxes too high, you’re just going to get people an incentive to try and avoid paying them.
Super Tax was finally scrapped in the 1980s. No one lamented its demise, least of all the Tax Man. Revenues actually went up after its abolition. So in the annals of silly taxes, this one was really really silly.
In London, I’m Stephen Beard for Marketplace.
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.