A Very Brief History of Taxation and the State

 The historical development of taxation and its connection to state structures, emphasizing that taxation has its origins in coercive practices, such as war and tribute extraction.

1. Origins of Taxation:

• Taxation emerged gradually, rooted in the practices of war, conquest, plunder, and tribute.

• Initial resource extraction involved direct conquest where rulers seized resources by force.

• Over time, this evolved into a system where conquered populations paid regular tribute to avoid violence, marking a shift from chaos to structured domination.

2. Phases of State and Taxation Development:

• Frank Chodorov in "Taxation Is Robbery" notes that taxation's origins lie in conquest and tribute, linking modern taxes to these violent beginnings.

• Franz Oppenheimer outlines six stages in the formation of states:

• Plunder/Raiding: Nomadic groups raid agricultural communities.

• Regularized Raiding/Truce: Raids become systematic as the aggressors find it more beneficial to extract resources than to destroy.

• Tribute Extraction: Conquerors demand regular payments from the subdued population.

• Permanent Domination: A ruling class establishes itself among the conquered, creating social stratification.

• Administrative Organization: Systems for managing tax collection and stabilization emerge.

• Territorial State: A stable political entity with a monopoly on force is formed, normalizing taxation.

3. Modern Taxation Formalization:

• As states legitimized and systemized extraction, modern taxation developed into orderly legal frameworks.

• Key features of modern tax states include:

• Centralization: Taxes are directly imposed by the central government, which do not rely on local governments.

• Unilateral Power: The central government can raise taxes without needing permission from other governmental bodies.

• Discretion in Spending: The central government determines how tax revenue is spent, without any obligation to benefit those who pay.

4. Taxation's Coercive Nature:

• Modern taxation retains a coercive element, as resources are collected through the threat of force.

• Rather than framing taxation as a service, it is emphasized that tax revenues do not correlate with specific benefits for taxpayers.

5. Critiques of the State and Taxation:

• Frederic Bastiat and Lysander Spooner provided critical views on the state and taxation, likening state actions to robbery, arguing that both entail coercion but the state is less honest about its intentions.

• Spooner highlights that unlike a highwayman (robber), the state not only takes taxes under threat but also imposes further control and demands compliance.

The history of taxation is deeply intertwined with the development of the state, evolving from ancient practices of plunder and tribute to modern systems marked by legal complexity and coercive extraction of resources. Recognizing this historical perspective helps one understand the foundational coercive character of taxation and the state's role in society.

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