THE TAX HISTORY OF GREAT BRITAIN
The first assessed tax in England was introduced during occupation by the Roman Empire. When Rome fell, the Saxon kings imposed taxes, referred as Danegeld, on land and property. The kings also imposed substantial customs duties. The 100 year War (the conflict between England and France) began in 1337 and ended in 1453. One of the key factors that renewed fighting in 1369 was the rebellion of the nobles of Aquitaine over the oppressive tax policies of Edward, The Black Prince. During 14th century taxes were very progressive. The 1377 poll tax noted that the tax on the Duke of Lancaster was 520 times higher than the tax on the common peasant. Under the earliest taxing schemes an income tax was imposed on the wealthy office holders, and the clergy. A tax on movable property was imposed on merchants. The poor paid little or no taxes. Charles I was ultimately charged with treason and beheaded. However, his problem with the Parliament came about because of a disagreement in 1629 about the rights of taxation afforded the King and the rights of taxation afforded the Parliament. The King’s Writ stated that individuals should be taxed according to status and means. Hence the idea of a progressive tax on those with the ability to pay was developed very early. Other prominent taxes imposed during this period were taxes on land and various excise taxes. To pay for the army commanded by Oliver Cromwell, the Parliament, in 1643, imposed excise taxes on essential commodities (grain, meat, etc.). The taxes imposed by the Parliament extracted even more funds than the taxes imposed by Charles I, especially from the poor. The excise tax was very regressive, increasing the tax on the poor so much, that the Smithfield riots occurred in 1647. The riots occurred because the new taxes lowered rural laborers’ ability to buy wheat to the point where a family of four would starve. In addition to the excise tax, the common lands used for hunting by the peasant class were enclosed and peasant hunting was banned (hooray for Robin Hood!). In 1800 the British invented a precursor to the modern income tax we know today to finance their engagement in the war with Napoleon. The tax was repealed in 1816. The costs of the War of Independence in turn led to more stamp duties; on post horses, hats and patent medicines (1783-1941). Those on gloves, perfume and hair powder did not last so long, but a licence to wear hair powder was still required in 1855, when there were less than 1, 000 users, mainly footmen. In 1784 William Pitt the Younger found that there were 68 different kinds of customs duties; a pound of nutmegs was liable to 9 different duties! He reformed the tariff and in 1799 introduced a temporary tax, income tax, at 10%. Great Britain still has it after 200 years. In 1842 Robert Peel reduced the number of dutiable articles from 1, 200 to 750; to help meet the cost he introduced income tax at 3%, again temporarily, and it still has to be imposed annually. A brilliant Chancellor was William Gladstone. He made far-reaching administrative reforms; his budget speech of 1853 lasted a record five hours! By 1874 income tax had fallen to less that 1%. To meet the costs of the 1939-45 war, the United States, Canada and the UK, all increased the rates of income tax and to facilitate its collection they all introduced deduction of tax by employers. In 1965 James Callaghan caused fiscal indigestion by introducing both capital gains tax and corporation tax. In 1972 Edward Heath took Britain into the European Community and the value added tax replaced the much narrower purchase tax. In 1974 Denis Healey increased the top rate of income tax to 95%, an even higher rate than during the 1939-1945 war. It has contrasted sharply with the top rate of 40% since 1988, which has brought in more revenue by attracting business to the UK and reducing avoidance and evasion.
Vocabulary
Exercise 2 Find the most suitable Russian equivalents to the following English collocations: To impose taxes, referred as Danegeld, on land and property; rebellion of the nobles over the oppressive tax policies; under the earliest taxing schemes an income tax was imposed on the wealthy; rights of taxation afforded the King; those with the ability to pay; to lower rural laborers ability to buy wheat to the point where a family of four would starve; costs in turn led to more stamp duties; licence to wear hair powder was still required; to introduce income tax at 3%, again temporarily; to cause fiscal indigestion by introducing both capital gains tax and corporation tax; to bring in more revenue by attracting business to the UK and reducing avoidance and evasion.
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