Tax reforms had revolting outcomes

AS Joe Hockey looks at ways to reform our antiquated tax system he could learn from past tax collecting mistakes

Artist’s impression of beheading of Wat Tyler, leader of a peasant revolt in England, 1380.

As federal Treasurer Joe Hockey contemplates reforming Australia’s “outdated” tax system, based on the Re:Think white paper released yesterday, he might also spare some time to ponder the lessons from history.

Many will argue shifting the burden of tax from income and company tax to a broader GST, and tinkering with tax breaks such as negative gearing, is a recipe for electoral unrest. But over the centuries tax increases, or the imposition of new taxes, have had far worse outcomes, inciting violence and bloodshed.

Ancient Rome was notorious for its corrupt tax collectors and people often rebelled against the imposition of taxes. The tributum capitis, literally translated as a tax per head, was a tax extracted from individuals who owned property other than land.

The imposition of the tax in Judea sparked the Zealot revolt of AD66-70. Mass refusals to pay the tax led to the Roman procurator Florus seizing silver from the Temple at Jerusalem, to which the Zealots responded with violence leading to four years of rebellion and brutal Roman repression.

Medieval monarchs also had a tough time getting enough coin out of their populations.

Hardecanute, son of King Canute, had a deadly struggle on his hands when he became one of several kings to impose a tax known as the danegeld intended to raise money for the payment of tribute to the Vikings. Tax collectors were murdered and when the entire town of Worcester rebelled against the tax in 1041 Hardecanute had the town burned to the ground.

King Edward III’s expensive wars left his successor, the young king Richard II, with huge debts. Edward had introduced a poll tax at the end of his reign and so in 1380 Richard also collected a poll tax, but it was deemed unfair and impractical since the collection was based on old records dating back to before the black death killed off as much as half the population.

Many people avoided paying and when another attempt was made to collect the tax in 1381 the peasants rebelled, killing a tax collector and marching on London. The king met with rebel leader Wat Tyler and promised concessions, but after Tyler was killed and the rebels disbanded, thinking they had what they wanted, those concessions were rescinded. However, the government made no further attempts to collect the tax.

The imposition of taxes without consultation drew a spirited response from American colonists in the 18th century. The British imposed taxes on everything from sugar to playing cards without consulting the colonists and each new tax was met with campaigns of non-compliance and protests that were largely ignored in England.

The tax on tea had resulted in the colonists smuggling in Dutch tea, to which the British responded by tightening the monopoly of the East India Company, a huge private British trading company that acted under royal charter, over the tea trade in America.

The colonists refused to allow the British tea ships to land, not wanting to pay the tax on the tea. On December 16, 1773, a group of radical colonists dressed as native Americans boarded three tea ships in Boston harbour and threw more than 300 chests of tea overboard.

The action, organised by Samuel Adams and the group the Sons of Liberty, became known as the Boston Tea Party and led to heightened tensions between Britain and America that eventually erupted in full-scale revolution.

Coincidentally today is the 25th anniversary of Britain’s poll tax riots, incited by the introduction of a “community charge” by Margaret Thatcher’s government in April 1989. This was essentially a tax to be levied on all people, with the rate to be determined by local councils, and meant to replace council rates, which were based on properties rather than people.

Dubbed a poll tax because it was collected according to people registered to vote, it was an unwieldy tax that shifted the burden from owners of properties to their occupants.

Widely deemed unfair and unworkable it failed to take into account places with seasonal or mobile populations, resulted in councils wasting time and money pursuing defaulters while people who were not previously taxed, such as university students sharing a house, were also expected to pay.

Resistance to the tax gained momentum leading to mass protests which on March 31, 1990, erupted into violence.

The unpopularity of the tax eventually led Thatcher to resign in November that year. Her successor John Major abolished the tax and later replaced it with a council tax similar in many ways.