History of Tax in Timeline

A tax is a mandatory financial charge levied by a government on individuals or entities to fund public spending and regulate economic activity. Tax compliance ensures taxpayers pay the correct amount and secure proper allowances. Taxation dates back to Ancient Egypt (3000-2800 BC). Taxes can be direct or indirect, and paid in money or labor.

1920: Arthur Pigou suggests tax for externalities

In 1920, Arthur Pigou suggested a tax to address negative externalities, which are environmental impacts not reflected in market prices. This proposal aimed to reduce environmental impact through repricing and has been the subject of long-lasting debate.

1920: Pigovian tax discussed in "The Economics of Welfare"

In 1920, economist Arthur Pigou discussed the concept of Pigovian tax in his book "The Economics of Welfare". Pigovian tax is a tax on any market activity that generates negative externalities.

1982: Rothbard argues taxation is theft

In 1982, Murray Rothbard argued in "The Ethics of Liberty" that taxation is theft and that tax resistance is therefore legitimate.

1986: Stagnation of India's income tax revenue

Since 1986, increases in exemptions in India led to the stagnation of income tax revenue at around 0.5% of GDP.

2008: Tax revenue share in resource-rich countries in 2008

In 2008, resource-rich countries witnessed the most progress in tax revenue, rising from 10% in the mid-1990s to around 17%. Non-resource-rich countries also showed some progress, with average tax revenues increasing from 10% to 15% over the same period.

2009: President Bush proposes to terminate discretionary programs

In 2009, President George W. Bush proposed in his 2009 budget "to terminate or reduce 151 discretionary programs" which were inefficient or ineffective.

February 2010: Taxation system in Germany and the IRS in the United States

As of February 2010, the IRS in the United States had approximately 1,177 forms and instructions, 28.4111 megabytes of Internal Revenue Code containing 3.8 million words, multiple tax regulations in the Code of Federal Regulations, and supplementary material in the Internal Revenue Bulletin.

2011: Decline in trade taxes as proportion of total revenues

In 2011, there was a global trend showing trade taxes declining as a proportion of total revenues, with the share of revenue shifting away from border trade taxes towards domestically levied sales taxes on goods and services.

2016: Taxation as a percentage of GDP in 2016

In 2016, taxation as a percentage of GDP was 45.9% in Denmark, 45.3% in France, 33.2% in the United Kingdom, 26% in the United States, and an average of 34.3% among all OECD members.

2019: Study shows impact of tax cuts on employment growth

A 2019 study analyzing the impact of tax cuts across different income groups found that tax cuts for low-income groups had the most significant positive impact on employment growth, while tax cuts for the wealthiest top 10% had a smaller impact.