The History of Taxes
It is roughly 2300 BCE in the city of Lagash, in what we now call southern Iraq. The river is brown and wide. Barley is stacked in tall, sun-dried bundles outside the temple. A scribe crouches over a clay tablet, pressing a reed into wet clay with practiced, deliberate strokes.
He is not writing a poem. He is not recording a marriage. He is writing down what you owe.
The temple needs grain to feed its workers. The city needs labor to maintain its irrigation canals. The king needs silver to pay his soldiers (and himself). And you, the farmer, the merchant, the fisherman, are expected to contribute your share of all of it.
This is where the story of taxes begins. Not in a chamber of elected representatives. Not with a declaration or a constitution. It begins here, in the river mud, with a reed pressed into clay.
And it raises the question that echoes through every civilization that has come after:
Who decides what you owe, and what does it cost to belong to a society?
The First Collectors
The earliest known records of taxation come from ancient Mesopotamia, from the Sumerian city-states that flourished between the Tigris and Euphrates rivers. Archaeological evidence from around 3000 BCE indicates that grain and livestock were collected by temple administrators, who served as both religious and civic authorities.
This matters because it tells us something about how taxes were originally understood. They were not strictly a government function. They were a form of participation in the collective order of things, part obligation, part ritual, part survival. The temple stored grain, and the grain kept people alive when the harvest failed.
In Egypt, things were even more organized, and in fact, according to Smithsonian Magazine, it is the Egyptians who deserve the most credit, or the most blame, for inventing the system we are all still living with. The world’s earliest known system of taxation emerged in Egypt at the dawn of civilization itself, around 3000 BCE, when the First Dynasty unified Upper and Lower Egypt. For most of its history, ancient Egypt levied taxes on goods: grain, textiles, labor, and cattle, with a fixed percentage of each harvest earmarked for state granaries.
To ensure that provincial governors accurately reported their districts’ wealth, Old Kingdom pharaohs conducted annual or biannual tours of the kingdom to assess it in person. And in a detail that will feel grimly familiar, the Egyptians also pioneered the concepts of tax fraud, evasion, and corruption; scribes and governors would often cooperate to underreport numbers and pocket the surplus, while taxpayers manipulated weighted scales used to measure grain. As Egyptologist Toby Wilkinson of Cambridge told Smithsonian, the fundamental basis of human society has not changed in 5,000 years.
The logic seems recognizable. Someone needs to build something. Someone needs to feed an army. Someone needs to repair the dam before the river floods the fields. And so many needed to give up some portion of what they have. That logic has never really changed. What changes in every civilization is who gets to define what that portion is.
Athens, Rome, and the Politics of Obligation
By the time we reach ancient Greece in the fifth century BCE, taxes had become deeply political, which is to say, deeply contested.
In Athens, wealthy citizens were expected to fund public projects through a system called the liturgy, a kind of civic obligation that required wealthy Athenians to personally finance warships, theatrical festivals, and public ceremonies. This was not quite a tax in the modern sense. It was more like a compulsory donation with social prestige attached. You were expected to give generously, and if you were seen as stingy, you risked your reputation in a city where reputation was everything.
Regular citizens, meanwhile, paid very little in direct taxation. The Athenians actually considered direct taxation on citizens to be a sign of tyranny, something imposed by despots, not democracies. They were not wrong. Revenue came instead from silver mines, trade tolls, and tribute from subject states. When Athens needed emergency funds during wartime, it imposed a special tax called the eisphora on wealthier residents, but this was understood as a temporary, exceptional measure.
Rome tells a different story. The Roman Republic initially operated similarly: direct taxation of citizens was considered shameful and reserved for emergencies. Revenue came from conquered territories, tribute, and customs duties. But as the empire expanded, so did its administrative needs.
By the time of Augustus, Rome had developed one of the most sophisticated tax collection systems in the ancient world. The tributum soli taxed land. The tributum capitis taxed individuals. Customs duties were levied at ports and provincial borders. And for a time, the whole machine ran on the labor of tax farmers, private contractors called publicani who paid the government upfront for the right to collect taxes in a province. Once that deal was struck, the publicani were on their own: they had already paid Rome, so every additional coin they extracted from the local population was pure profit for themselves. The harder they squeezed, the more they kept.
The Medieval Bargain
With the fall of Rome, centralized taxation largely collapsed in Western Europe. What replaced it was feudalism, a system in which obligation was personal and local rather than institutional and imperial.
You owed labor to your lord. Your lord owed military service to a king. The king, in theory, owed protection to everyone below him. Taxes were not collected by a bureaucracy; they were demanded by whoever had the sword and the land. The anarcho-syndicalist commune, where decisions are ratified by a two-thirds majority at a special biweekly meeting, was not yet taking appointments. As Dennis from Monty Python’s Holy Grail would later observe, strange women lying in ponds distributing swords is no basis for a system of government. But in medieval Europe, it was close enough.
But even in this fragmented system, certain patterns persisted. The churches collected a tithe, which was one-tenth of every household’s income or produce. It was proposed as a principle of reciprocity, wherein the one who gives the most receives the most blessings. And it was enforced not by soldiers but by the threat of spiritual consequences. It was, and is, in a way, one of the most effective taxation systems ever devised, because the collector doesn’t need an army. The fear of hell does the work.
In England, the story gets interesting in 1215. King John of England had been draining his barons dry, taxing feudal obligations beyond what custom allowed, demanding money for military campaigns that kept failing, and generally behaving as though royal authority had no limits. Sounds familiar. The barons had had enough. They forced him to sign the Magna Carta, which contained a principle that would echo through centuries of political history: the king could not levy certain taxes without the consent of the realm.
That single idea, no taxation without consent, would travel from the fields of Runnymede to the floors of Parliament to the pamphlets of American revolutionary colonists, each generation restating it with a new and rightful urgency.
The Birth of the Income Tax
For most of history, governments taxed things you owned or traded: land, livestock, goods moving across a border, and windows in your house. The idea of taxing what you earn, your income, as a percentage, is surprisingly modern.
The income tax, as we recognize it, was born in Britain in 1799, created by Prime Minister William Pitt the Younger as an emergency measure to fund the wars against Napoleon. It was supposed to be temporary. It was structured in tiers, with higher rates for higher incomes, and it was deeply unpopular. Pitt set the rate at two shillings in the pound, roughly 10%, for incomes above £200 per year.
The tax was repealed after the Napoleonic Wars ended, as promised. But governments have a way of rediscovering nefarious and draconian tools. Britain reinstated the income tax in 1842 under Robert Peel, this time to cover a general budget shortfall rather than a war emergency, and it has never gone away.
In the United States, the trajectory was similar. The federal government tried an income tax during the Civil War, then let it lapse. It tried again in 1894, and the Supreme Court struck it down as unconstitutional. Then came the Sixteenth Amendment in 1913, which gave Congress the explicit power to levy taxes on income without apportioning them among the states, and with that, the modern American tax system was born.
In its first year, the federal income tax applied only to individuals earning more than $3,000 per year, equivalent to roughly $90,000 today, and the top rate was just 7%. It was, by any modern standard, a tax that touched almost nobody.
World War II changed that entirely.
The Democratization of the Tax Return
Before the Second World War, filing an income tax return was something that wealthy people did. Most Americans earned too little to qualify. But the war’s enormous expense forced the government to dramatically expand the tax base, lowering the income threshold until tens of millions of working Americans suddenly found themselves filing for the first time.
To make collection practical at this new scale, the government introduced something that now seems completely ordinary: withholding. Instead of asking workers to calculate and pay their annual tax in a lump sum, employers would deduct taxes from each paycheck and send the money directly to the government. This system, introduced in 1943, was designed in part by economist Milton Friedman, who later said it was one of the decisions in his career he most regretted.
Withholding worked. It made the expanded income tax politically manageable because most people never saw the money in the first place. It also permanently altered the relationship between American workers and their government; taxes became, in a way, invisible as they had never been before.
The Question That Persists
Every major tax debate in history, from the Athenian liturgy to the Magna Carta to the Boston Tea Party to modern arguments about capital gains and wealth taxes, keeps coming back to the same fundamental question: what is a fair share?
The philosopher’s ability to answer that question has always depended on what you think society is for. If civilization is a collective project, a shared undertaking that builds roads, educates children, maintains courts, and protects borders, taxation is the price of membership, and a fair price is one calibrated to what each member can afford to pay.
If, on the other hand, you believe that what you earn is primarily yours, and that government intrudes on an individual’s sovereignty when it takes a share, then every tax is a negotiation about how much intrusion is justifiable.
And in the last two hundred years, that negotiation has had a very specific battleground: the top marginal rate.
Here is what that means in plain language. In most modern income tax systems, you don’t pay one flat rate on everything you earn. Your income is divided into brackets, and each bracket is taxed at a progressively higher rate. The top marginal rate is the percentage applied to the highest bracket, the slice of income above a certain threshold. It does not mean the wealthy pay that rate on every dollar they earn. It means that once your income crosses a certain threshold, every dollar above that threshold is taxed at that specific rate, and everything below it is taxed at the same lower rates everyone else pays.
In the United States, that number has swung dramatically over the last century. It peaked at 94% during World War II, meaning the federal government claimed 94 cents of every dollar earned above the top threshold. It held at 70% through most of the postwar era. Ronald Reagan cut it to 50% in 1981, then to 28% by 1986. Today it sits at 37%. Same tax system, very different negotiations.
The pattern behind those swings is striking. Political scientists Kenneth Scheve and David Stasavage, studying two centuries of tax data across twenty countries, found that the single most reliable driver of high top marginal rates was not left-wing governments, not rising inequality, but mass warfare, specifically, military conscription. When ordinary citizens were being drafted and dying in trenches, the political argument for taxing the wealthy at very high rates became almost impossible to resist. The shared sacrifice of war made the question of fairness impossible to ignore. And when the wars ended, and the memory of that shared sacrifice faded, the rates came down. In the 1980s, the United States and Britain led a global wave of top-rate reductions. The countries that followed within a decade include Australia, Canada, Italy, Japan, New Zealand, Norway, and Sweden, with France and Germany making more gradual reductions rather than resisting entirely.
The Organisation for Economic Co-operation and Development (the OECD) is an intergovernmental organization that was founded in 1961 and includes 38 member countries that seek to uphold policies for advancing the world-wide economy. The OECD documented that the average top marginal rate across nineteen member countries fell from 67% in 1981 to 49% by 2018, with most of the sharpest cuts concentrated in the late 1980s and early 1990s.
The most recent chapter in that story is the 2017 Tax Cuts and Jobs Act, signed by President Trump. It lowered the top marginal rate from 39.6% to 37%, where it remains today. On the surface, that looks like a modest adjustment. But the individual rate was only part of the law. The corporate tax rate was cut from 35% to 21%, a much larger reduction, and research by economists at the Joint Committee on Taxation and the Federal Reserve found that nearly all of the benefits from that corporate cut flowed to high-income shareholders and executives, not to lower-paid workers.
What about lower-income earners? The individual income tax in the United States is on the record as progressive; higher earners pay higher rates, and the Tax Cuts and Jobs Act technically lowered rates across most brackets, including lower ones. However, the overall effect of the full law tilted toward the wealthy.
The Brookings Institution put it plainly: the law made the distribution of after-tax income more unequal. And if it ends up being financed through cuts to programs that lower-income households depend on, Medicaid, food assistance, housing vouchers, most of those households will end up worse off than if the law had never passed.
The Center on Budget and Policy Priorities noted something that stings: the same drafters who agreed to a deeper cut in the top rate turned down calls to expand the Child Tax Credit for eleven million children in low-income working families. The Earned Income Tax Credit, one of the most effective tools America has for lifting low-wage workers, was left entirely untouched.
So when you hear debates today about whether the top rate should be higher or lower, you are hearing an argument that has been running, in one form or another, since the first person with the most was asked to give a larger share. The numbers change. The logic underneath them does not.
Neither of these views is new. The Athenians debated them. The Roman Senate debated them. The English barons at Runnymede were having a version of this debate in 1215. What is new, in every era, is the particular form the question takes, the specific technology, the specific inequality, the specific emergency that forces societies to ask it again.
The scribe in ancient Lagash, pressing his reed into wet clay, was not the last person to make someone account for what they owed. He was the first in a very long line.
And in the United States, that line runs all the way to your mailbox on April 15th.
Further Reading
UK Parliament, “Income Tax”: https://www.parliament.uk/about/living-heritage/transformingsociety/private-lives/taxation/overview/incometax/
Britannica, “Taxation, History of Taxation”: https://www.britannica.com/topic/taxation/History-of-taxation
U.S. National Archives, “16th Amendment”: https://www.archives.gov/milestone-documents/16th-amendment