Income tax was introduced to Britain in 1798 by William Pitt to pay for the war against Napoleon, and was expected to raise £10 million but only managed £6m. In 1802 Pitt resigned over the Catholic Emancipation Act, there was a pause in the wars so the tax dropped. But with Henry Addington as Prime Minister, the wars started up again so the tax was reinstated and has changed little since then. It became a permanent system in 1842.
Income tax was hugely unpopular, but it is arguably the fairest system, as it takes a proportion of income as opposed to the flat rate that proved so unpopular in local taxation known as The Poll Tax, which some claim was what caused the resignation of Margaret Thatcher. The fact that income tax could be introduced shows that Britain’s economy was, by then, mostly money based, and that records of income were already being kept, a far cry from traditional bartering systems.
Pitt also introduced what many claim to have been a crazy tax, that on hats from 1784-1811. Hat retailers had to pay for a licence, and each hat they sold had to have a stamp inside it to show the tax had been paid. It was seen by many as being fair, as the tax paid was a proportion of the retail price, and the rich had more hats than the poor. Also, many poor people made their own, so would have paid nothing. It was as serious as any other form of government act, as anyone caught forging the stamps faced execution, or, more likely in those days, a one way trip to the Antipodes.
Another means of raising funds that was particularly common under the Stuarts was to sell monopolies of trade, so guilds could in turn tax non members for carrying out their trade, and even carry out search and confiscation of goods. This was particularly hard on provincial industries, such as soap and candle making, which may be part of the reason people of the time were so antipathetic to washing. The soap tax was not abolished until 1853, as part of widespread Victorian reforms. The most long lived monopoly was that of the London Stationers, who claimed copyright on all books until 1695, when there was an explosion in provincial publishing in England. This was furthered by the 1710 Statute of Queen Anne, which granted copyright to the authors.
Another fundraising source under the Stuarts was the sale of Baronetcies. The title of Baron dates from the 1300s but James I sold many of them for £1,000 as a blatant means of raising funds. So, modern complaints of wealthy people buying peerages is nothing new.
Window tax was introduced by William III in 1696 as an alternative to income tax which had caused so much opposition when people objected to revealing their income. Like the later hat tax, it was seen as one which the rich paid more, so was relatively fair to the poor. Its legacy can be seen in many buildings where the windows are bricked up, but this may be a design feature, as this often corresponds with bricked up doors which had nothing to do with taxation.
At various times, other British taxes were put on such luxury items as wig powder and male servants, which were strictly aimed at the rich. The latter led to a huge shift in domestic servants, with far more women being employed than men.
Taxes can go beyond raising funds, as modern governments put increasing taxes on unhealthy food, cigarettes and alcohol and green taxes on pollution. Britain’s VAT (Value Added Tax) is a frequent source of dispute over whether hot or cold food should be taxed, as shown by the recent revolt over the pasty tax. Decades ago there were claims of sexism as the tax was applied to female sanitary products but not to other toiletries. It is now applied to electronic appliances, including ebooks, where paper books remain tax free.
In 1705 Peter the Great of Russia introduced a tax on beards in an attempt to force the country to modernise. Those choosing to keep their face fungus purchased a silver of copper beard token depending on their income, to carry with them as proof of payment.
In New York State they have a bagel tax, but only when they are sliced and prepared; the plain bagel is tax free. And in Arkansas they have a 6% tax on tattoos, body piercing and electrolysis hair removal.
But best of all, was New Zealand’s attempt in 2003 to introduce an agricultural research levy on cattle farmers to try to control the amount of methane being produced by their cows, allegedly contributing to 50% of the country’s greenhouse gases. Protests were widespread, including one MP driving a tractor up the steps of the parliament building.