Tax History and Statistics
Throughout history there have been many strange, unusual, and weird taxes (read about the history of taxes). Many of them were implemented to raise additional revenue, while the purpose of others was to promote social change. Here are some of the strangest ones:
Ancient Taxes from Around the World
- In Ancient Egypt, cooking oil was taxed, and on top of that, people had to buy their taxed cooking oil from the Pharaoh’s monopoly, and were prohibited from reusing previously purchased oil.
- Pecunia non olet or Money doesn’t stink! is a Latin saying. During the 1st century AD, Roman emperor Vaspasian placed a tax on urine. The buyer(s) of the urine paid the tax. The urine from public urinals was sold as an essential ingredient for several chemical processes e.g. it was used in tanning (not exactly sure how), and also by launderers as a source of ammonia to clean and whiten woolen togas etc. Therefore, those who obtained valuable urine from collectors were charged a tax.
- In Ancient Rome, it was not uncommon for slave owners to free their slaves after a certain number of years of work, and/or the payment of a certain fee. Slaves could pay that fee because many of them had the opportunity to work in several places, and thus could earn the money used to obtain their freedom. The Roman government required the newly freed slave to pay a tax on his or her freedom.
- During the Middle Ages, European governments placed a tax on soap. It remained in effect for a very long time. Great Britain didn’t repeal its soap tax until 1835.
- In 1705, Russian Emperor Peter the Great placed a tax on beards, hoping to force men to adopt the clean-shaven look that was common in Western Europe.
- The French had a salt tax called the gabelle, which angered many and was one of the contributing factors to the French Revolution.
- In 1885 Canada created the Chinese Head Tax, which taxed the entry of Chinese immigrants into Canada. The tax lasted until 1923 when a law was passed banning Chinese people from entering Canada altogether with a few exceptions.
- Japan imposed a tax on whiskey which is based on the percentage of alcohol by volume, so Japanese whiskey manufacturers began diluting their product with water to avoid the tax. European whiskey manufacturers were prohibited from doing so; therefore, Japanese whiskey had an advantage in Japan.
Taxes From England
- King Henry I allowed knights to opt out of their duties fight in wars by paying a tax called “scutage”. At first the tax wasn’t high, but then King John came to power and raised it to a rate of 300%. Some claim that the excessive tax rate was one of the things that contributed to the creation of the Magna Carta, which limited the king’s power.
- Oliver Cromwell placed a tax on Royalists, who were his political opponents, taking one tenth of their property. He then used that money to fund his activities that were aimed against the Royalists.
- Playing cards were taxed as early as the 16th century, but in 1710, the English government dramatically raised taxes on playing cards and dice. This led to widespread forgeries of playing cards to avoid paying taxes. The tax was not removed until 1960.
- In 1660, England placed a tax on fireplaces. The tax led to people covering their fireplaces with bricks to conceal them and avoid paying the tax. It was repealed in 1689.
- In 1696, England implemented a window tax, taxing houses based on the number of windows they had. That led to many houses having very few windows in order to avoid paying the tax. Eventually this became a health problem and ultimately led to the tax’s repeal in 1851.
- In the 1700’s, England placed a tax on bricks. Builders soon realized that they could use bigger bricks (and thus fewer bricks) to pay less tax. Soon after, the government caught on and placed a larger tax on bigger bricks. Brick taxes were finally repealed in 1850.
- In 1712, England imposed a tax on printed wallpaper. Builders avoided the tax by hanging plain wallpaper and then painting patterns on the walls.
- England introduced a tax on hats in 1784. To avoid the tax, hat-makers stopped calling their creations “hats”, leading to a tax on any headgear by 1804. The tax was repealed in 1811.
- In 1789, England introduced a tax on candles. People were forbidden from making their own candles unless they obtained a license and then paid taxes on the candles they produced. The tax was repealed in 1831, leading to a more widespread popularity of candles.
- In 1795, England put a tax on the aromatic powders that men and women put on their wigs. This led to a dramatic decline in the popularity of wigs.
- Salt was a very popular thing to tax because consuming it is necessary to humans. The British placed a tax on salt, and the salt tax gained worldwide attention when Gandhi staged nonviolent protests against it.
- England has a tax on televisions. If you own a television in your home, you must pay an annual fee, formally called a television license, for each television you own. This money is used to finance programming on the BBC. Color televisions are taxed at a higher rate than black and white televisions. Interestingly enough, if a person is blind an owns a TV in his or her home, he or she still has to pay the tax, but only half of it. Failure to pay this fee is subject to criminal penalties. There were 155,000 convictions and fines in 2012 alone.
- Johnstown, Pennsylvania was devastated by a flood that killed nearly 2,000 people in the late 19th century, and in 1936 another flood damaged the town. That led to the state of Pennsylvania passing a tax on alcohol, the proceeds of which would be used to rebuild the city. By 1942, enough money was raised to rebuild Johnstown, yet the tax exists to this day, and brings in around $200 million a year for Pennsylvania.
- New York City places a special tax on prepared foods, so sliced bagels are taxed once as food and again as prepared food, thus creating a sliced bagel tax.
- Maine has special tax on blueberries, a valuable state resource.
- Pennsylvania has a tax on coin-operated vacuum machines at gas stations.
- Pittsburgh has a 5% amusement tax on anything that offers entertainment or allows people to engage in entertainment.
- States like Iowa, Pennsylvania, and New Jersey exempt pumpkins from a sales tax but only if they will be eaten and not carved.
- In 2005, Tennessee began requiring drug dealers to anonymously pay taxes on any illegal substances they sold.
- Despite marijuana being illegal on a federal level and in most states, many states impose taxes on the sale of marijuana.
- In Arkansas, body piercings, pet grooming, and gutter cleaning are all subject to a 6% sales tax.
- In California, snuff tobacco is taxed differently depending on its type. Dry snuff is taxed at 256% of its price if it’s $1.70 or more. Moist snuff is taxed at 170% of its price if it’s $1.70 or more.
- In Chicago, candy that is prepared with flour is taxed as food at 1%, while candy that is prepared without flour is taxed as candy at 6.25%.
- In Florida, a sales tax holiday was created that included items like fanny packs, bowling shoes, school supplies, vests, and seemingly randomly assembled list of other items.
- Numerous states charge a tax on admissions to racetracks and casinos.
- In California, fresh fruit bought through a vending machine is subject to a 33% tax.
- In Oregon, double amputees get a $50 tax credit.
- In West Virginia, there is an additional tax on sparklers.
- Kentucky levies a sales tax on thoroughbred stud fees (whether the horses were in the Derby or not).
- In Texas, Christmas tree decoration services are subject to a tax only if the decorator provides the decorations and ornaments. In addition, there is a tax on holiday-themed pictures that are meant to be placed on windows.
- Many cities and states levy a “jock tax” on any income earned by entertainers and athletes while working in that city. Therefore, athletes have to pay taxes on a portion of their income in any place they play.
- Wisconsin is one of the few states that levies a tax on internet access. When dial-up was a popular method of getting online, there was double taxation occurring because phone calls were also taxed.
- In Colorado, essential food items are tax-free, but straws and cup lids are subject to sales tax because they are considered to be nonessential food items.
- In New Mexico, people over 100 years old are tax-exempt, but only if they are not dependents.
- In many states there are “occupancy taxes” for anyone who books a room in a hotel. For example, in Texas, occupancy of any room costing over $15 is taxed at 6% of the room fee.
- In 2004, Maryland imposed a tax on residents whose houses are hooked up to sewers leading to treatment plants. Proceeds go to protect the polluted Chesapeake Bay.
- The City of Chicago taxes soda bought in a bottle at a rate of 3%, and taxes soda from fountains at a rate of 9%.
- In Tennessee, there is a tax on all litigation. The amount varies case-by-case but it can be as low as $1 for a parking violation case. The tax tends to discourage frivolous lawsuits.
- In Minnesota, there is a special tax on fur.
- In the state of Kansas, untethered hot air balloon rides are exempt from sales tax because they are considered a legitimate form or air transportation. Tethered hot air balloon rides, on the other hand, are considered to be an amusement ride and therefore are subject to sales tax.
- In 2007 Texas lawmakers imposed a $5 tax on establishments that host live nude shows and also allow alcohol consumption on their premises. Since strip clubs are the businesses that are affected by it, the tax was nicknamed the “pole tax”. The revenue from the tax goes to help help sexual assault victims and provide health insurance for the poor. The tax was challenged in the Texas Supreme Court on First Amendment grounds, but was upheld in 2011.
Other Unusual Taxes
- The IRS taxes stolen property. The 1040 instructions say that you should report it as stolen property. However, doing that would be self-incrimination, from which we are protected by the Constitution; therefore, one has the option of reporting it as “other income”.
- In 2012 there was a controversy after the London Summer Olympic Games about the tax treatment of foreign athletes competing in Great Britain. According to the British tax code, foreign athletes competing in the UK have all their endorsement income taxed, even income originating from other countries, and the income is taxed proportionally to the time spent in the UK. This is different from the way many other countries, including the United States, tax foreign athletes. In the United States only endorsement income of foreign athletes originating from US sponsors is taxed by the IRS. The law was waived by the British government for the duration of the Olympic Games, but it kicked back in after the conclusion of the games. A number of high profile athletes have spoken out against this tax, stating that their tax bill may be bigger than any prize they may receive by winning the competition. The law is often cited by athletes as a reason for choosing to avoid attending competitions in Great Britain.
- In 2014, the hit Netflix show, House of Cards, halted filming in the State of Maryland as film tax credits were expected to run out. The show received $11.6 million for its first season and $15 million for its second season. Filming resumed in June 2014. The production team placed House of Cards on hold while waiting for the outcome of two separate bills in the Maryland Legislature. According to the Maryland Film Industry Coalition, film production in the state has a “$400 million impact” on the economy.
Related Tax History Information
While most taxes are not as strange as the ones above, many people have tried to evade taxation entirely. Learn about high-profile tax evasion cases in the United States and around the world.
While some have simply evaded taxes, others have used strange and often incorrect legal and Constitutional
Read about unusual tax deductions.
Read about unpleasant IRS experiences.
Read about money saving tips for every occasion.
Detailed overview of the tax history in United States and the world.
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