Financial Risk Manager

Ways of Financial and Risk Management

Tax History
Wednesday, April 15, 2009

Taxes represent a transfer of wealth from the citizens of a country to the ruling power of that country. As such, they have existed since ancient times. The Bible speaks of them and it is clear from the biblical text that tax collectors were generally reviled. Almost anything can be taxed and there are various ways in which taxes can be applied.

The first taxes of which we have a documentary record were applied in ancient Egypt. In ancient times, it is clear that taxpayers were expected to offer up a portion of the agricultural produce they raised from the land to the ruling power of the day.

As economies have evolved, governments and rulers have chosen to raise taxes in different ways. For a long time, many countries raised revenue primarily through taxing imports into the country.

In modern times, the income tax, which is charged as a percentage of all income earned in a period of time has become the most popular method by which governments in developed countries raise revenue. Corporation tax, a tax charged as a percentage of the profits made by incorporated companies, is also significant. Many countries also have sales taxes, or value added taxes, which are charged as a percentage of the selling price of a product or service.

Labels: Taxation