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July 27, 2011


Ancient Greece & The First Truly “Progressive” Tax Policy

by RogueOperator

While surveying the literature on prominent tax rebellions, I encountered this remarkable entry on the tax policy of Ancient Greece.  Although the entry is assuredly glowing, there is cause to agree with the authors that the tax policy was relatively enlightened.

A minor bit of explanation is needed in order to set the stage for the passage.  The “liturgy” was a form of tax farming in the ancient world where wealthy landed estate could be afforded titles in exchange for raising tax funds for the state.

Greece revolutionized this “liturgical” system of servitude to the state, and made patronage a purely voluntary matter.  It was social prestige that drove wealthy patrons to compete with one another to construct public works projects. As David Burg explains in A World History of Tax Rebellions (available online):

The “liturgy” took a somewhat different form in fifth century BC Athens and other Greek cities. The Greek democracies, says Alfred E.Zimmern in The Greek Commonwealth, resisted the levying of any kind of direct taxes because such taxes were “regarded as derogatory to the dignity of a free citizen. Resident aliens and freedmen might pay a poll-tax and be thankful for the privilege; but the citizen must be left free to help the city in his own way. Every kind of indirect tax he was indeed willing to pay…; but the only direct contribution he made as a citizen to the State’s resources was by preference a free gift, or what was called at Athens and elsewhere a ‘liturgy’ or ‘public work.’ ”

Thus, under this “liturgy” system large portions of the public expenditures for producing plays; equipping ships; staging games, festivals, and musical contests; organizing chariot and horse races; and fostering other endeavors “were defrayed by private citizens, who came forward voluntarily, and took pride in vying with their predecessors or with a crowd of rivals in their performance of the task.” In such a context, Zimmern concludes, “To talk of taxes…is a blunder as well as a sacrilege, for a tax is a payment which leaves a man poorer: a ‘liturgy’ leaves him richer.” He is richer for having freely and generously helped the entire community while preserving his status as a free citizen. The wealthy man also assisted his community by paying the eisphora, a periodic tax assessed as a percentage of capital to cover military expenses (most often payments to troops), obliging the rich to finance wars.” (xi)

Granted that even relatively enlightened Athens had slaves [ed.] during this period, one cannot fail to note that such a tax policy of voluntary contribution to the polis coincided with The Greek Golden Age – an era when philosophical speculation soared, magnificent monuments were erected, and civilization flourished.

What brought Greece low? Stasis brought about by democratic clamoring, demagoguery, and adventurist wars. As with individuals, the same goes with civilizations.  Concentrate on oneself, and one’s competitiveness versus rivals, and prosper; concentrate “outward” and engage in envious confiscation, redistribution, socially disruptive behavior, and war, and decline.

4 Comments Post a comment
  1. Jul 27 2011

    Athens had slaves, true, but only Sparta had helots. In ancient Athens, if a land-owner claimed he was paying more than he ought, compared with a someone of equivalent holdings, a standard settlement was to swap their properties.
    You’ll remember that “idiot” comes from the Ancient Greek for “private”. According to Thucydides, Pericles, in the famous Funeral Oration”, said, “Here each individual in interested not only in his own affairs but in the affairs of the state as well: even those who are mostly occupied with their own business are extremely well-informed on general politics—this is a peculiarity of ours: we do not say that a man who takes no interest in politics is a man who minds his own business; we say that he has no business here at all.”

    • Jul 27 2011

      You’re right, I used the wrong nomenclature. Helots will be changed to slaves.

      As for your point, Athens indeed had a high level of civic spirit. Aristotle characterized men as ‘zoon politikon,’ and condemned those who removed themselves from society as believing they were ‘above the polis.’ Socrates died rather than disobey the judgment of the Athenian council, an illustration of the ethic of civic-mindedness Aristotle alludes to.

      But one cannot fail to notice that this same ‘civic mindedness’ contained in it a kernel of weakness: a tendency to fall prey to a mob mentality and the orations of demagogues. This fatal weakness is detailed in the work of Thucydides you cited. Cleon, for example, foolishly advises the Athenians to insist on Spartan return of territories, and to reject the latter’s peace offering. Athens decays during the Peloponnesian War, and particularly after the plague, metaphorically, almost like a mind deteriorates.

      It appears to me that there is a disposition of men in civilization to fear self-reliance, and to prefer to nestle in the woolly, ethereal comfort of ‘belonging’ to a community, any community, so long as one is included. Existentially, such people fear the idea of being alone in the universe, perceived meaninglessness in death, and see human society as an easy means by which to find meaning.

      But “society” is contentless and unspecific, and it does matter the basis of a community in which an individual participates. If one is based on truth, than the society is sure; if it is based on falsehood, all manner of errors occur. There is a role of chance, to be sure, in the functioning of societies, for human beings live in a world where the seemingly unpredictable does occur.

      What ensures society is enlightened individualism – each man attending to his own affairs while cooperating with others in pursuit of mutual goals. No man is an island, to be sure, and enlightened individualism does not imply the contrary. It implies that men voluntarily cooperate to pursue what each values, and there is a shared interest in the impartial administration of justice.

      The success of the gifted and productive is intrinsically tied to the demands of the many through the mechanism of the market. The institution of private property is not a ruse for the rich to deceive the poor and to allow for the latter’s exploitation; it is a restraint on a rich, and the security of all, allowing each person to improve oneself, and to create and produce without fear of expropriation.

      Once private property and individual rights are decimated, indeed it is the rich and powerful who prey on citizens, as we see in the United States presently. It should be noted that the Democrats, who feign to work on behalf of the “little guy” by ignoring private property and redistributing wealth, engaged in the most massive redistribution of wealth from the middle class to the rich in world history.

      • Yosoo
        Jun 16 2012

        this was very educational

      • Ron James
        Sep 12 2012

        Don’t you need to explain how the Democrats “engaged in the most massive redistribution of wealth from the middle class to the rich in world history” ?

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