Administration of taxation

The choice and structure of tax laws are influenced by opinions on what constitutes proper tax policy, although administrative factors may substantially account for historical trends in taxes. Import charges were among the oldest taxes, for instance, as imported goods are simpler to tax than domestic produce.

In a similar vein, before the introduction of the economically better but administratively more onerous VAT, the straightforward turnover tax (levied on gross sales) long predominated (which allows credit for tax paid on purchases). Real estate can be more easily identified, valued, and taxed than other types of assets. A head tax is even simpler to enact. The fact that land and head taxes were the first direct levies is not surprising.

Although taxes have a long history, they had a very limited impact on ancient society. In Greece and Rome, there were consumption taxes. When it came to the generation of revenue, tariffs, which are taxes on imported commodities, were frequently far more significant than internal excises.

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In times of war, taxes on property would be temporarily enforced as a way to raise more revenue. These taxes were first limited to real estate, but subsequently, they were expanded to other assets. Taxes were also levied on real estate transactions. Free people in Greece had distinct tax duties from slaves, while nationals and inhabitants of conquered lands were treated differently under the tax rules of the Roman Empire.

Consumption taxes, customs tariffs, and several other "direct" taxes were all used as early Roman taxation methods. The primary of them was the tributum, which was levied as a head tax on residents and then expanded to include real estate holdings when more money was needed.

Many of these old taxes, particularly the direct levies, were replaced in the Middle Ages by a system of "aids" and various required duties (most of which amounted to gifts). Market fees and transit tariffs, which are levied on products passing through a country, were the principal indirect taxes. The idea of a universal tax duty emerged in urban areas; taxes on specific goods and beverages were meant to be split 50/50 between consumers and producers and business owners.

In the later Middle Ages, various cities in Germany and Italy enacted a number of direct taxes, including head taxes for the poor and net worth taxes or, sometimes, crude income taxes for the wealthy. Self-assessment and a public oath were the methods used to administer the income tax. Land and housing taxes progressively rose.

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