The Rosetta Stone to the US Code: A New History of Taxation

Mises Institute
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The Rosetta Stone to the US Code: A New History of Taxation

This series of lectures by tax historian Charles Adams—based on original research—illuminates episodes in light of the tendency of government to tax beyond the point where people will tolerate. This is the fascinating story of how taxes have shaped history. Download the complete audio of this event (ZIP) here.

Episodes

  1. 09/06/2004

    1. The Making of a Tax Historian

    Charles Adams, the tax writer, tells young people to get a liberal education and go with the flow. He took tax law and he taught history. He saw that there was a tax story behind every event. Taxes, not slavery, caused the Civil War. Taxes began in Sumer. “Taxes are the fuel that make civilizations run,” but how we tax and spend determines to a large extent whether we are prosperous or poor, free or enslaved, and most importantly, good or evil. Taxes are forced exaction. In Egypt, scribes were not taxed. All others were taxed twenty percent, unless you could flee to a temple or you were granted immunity. The Greeks were brutal tax collectors. The Rosetta Stone was inscribed in three modes - Greek and hieroglyphics. It was a tax document. The tax history of the Jews goes back five thousand years. Their economic and political story has been one continuous struggle against outrageous taxation. Land taxes were based on what the land should produce, not on what they did produce. Lecture 1 of 10 from Charles Adams' The Rosetta Stone to the US Code: A New History of Taxation.

  2. 09/06/2004

    10. Learning from the Past: What History Teaches

    Adams suggests nine reform items to tame the tax monster: 1) tear down the spy system, 2) establish a crime for tax extortion as well as a civil action for damages, 3) establish a civil action for damages for tortious tax administration including: malicious tax investigations, extortions, leaked information and grand jury abuse, 4) have all federal tax districts coincide with congressional districts and provide for the recall of district directors, 5) adjudicate tax disputes like any other debt, 6) decriminalize the tax law, 7) make congressional representatives and federal judges immune from the IRS, 8) make our federal tax system indirect as much as possible, and 9) another reform measure that may take the forefront in tax reform is a national consumption tax, like a sales tax. In learning from the past, many nations taxed themselves to death. The Greeks discovered that tyranny resulted from direct taxation, so the kind of tax matters. Lecture 10 of 10 from Charles Adams' The Rosetta Stone to the US Code: A New History of Taxation.

  3. 09/06/2004

    2. The Bible's World of Taxes

    Adams begins this session with facts about taxation being the basis of the Civil War, not slavery. If the British had not taxed the colonies, the colonies would have remained with Britain and slavery would have been ended when Britain ended it. The thousand year history of the Romans covered everything about taxes. They had a citizens’ war-tax. Rhodes had only a 2% tax, but disappeared when the Romans set up a tax haven nearby. In the Roman Empire Caesar Augustus declared that all would be taxed. He became a successful ruler, bringing peace to Romans. His successors were not that decent. Diocletian declared that no one could move or change work. He made a prison of the Empire. In Russia, you could pay taxes, become a galley slave, or become a serf to a noble. The wisdom of the Chinese was a ten percent tax – called the mandate of heaven. Islam said death or taxes to the infidel. Christianity was the loser to this Muslim offer of tax immunity. No religion has spread so far so quickly. Medieval taxpayers had God on their side. Excessive tax collections were sins. Magna Carta was about taxes. It protected trade from internal tolls and prohibited excessive tolls at seaports. The concept of the separation of powers came out of Britain. The King could spend but not tax. Congress could tax but not spend. The Russian Princess Olga “was wiser than all men.” She divided the country into tax districts. Later, Mongols under Genghis Khan shattered the Russian culture with taxation. Ivan the Terrible from Moscow first collected taxes for the Khan, but then declared he had no tax obligations to the Khan. Ivan gained control of Russia. Queen Elizabeth I was called “Good Queen Bess.” She said she “would rather the money [taxes] was in the pockets of my people than in my treasury.” Lecture 2 of 10 from Charles Adams' The Rosetta Stone to the US Code: A New History of Taxation.

  4. 09/06/2004

    3. The Kaleidoscopic Romans

    Adams begins with a few tidbits: taxation problems caused the end of Egypt and the taxes that the Greeks put on the Jews were an excessive one-third. Sulla of Rome created special tax agents, essentially IRS agents, to collect taxes. Cicero felt that the era of chaos made a military dictatorship inevitable, saying that, “And so in Rome only the walls of her houses remain standing… our Republic we have lost forever.” Adams talks about Swiss privacy/secrecy being adopted by 23 countries around the world. Several were fine tax havens. Taxation was at the heart of Spain’s decline, but it was bad taxpayers as well as bad taxation. Spain owned almost everything, even Mexico, Panama, and what is now California, and Florida. Spain received a Royal Fifth on all gold and silver. Massive smuggling ensued. The Spanish king said no new taxes, but he tripled tax enforcement. Today, you can be an American citizen, owing taxes, without ever having set foot in the US. Lecture 3 of 10 from Charles Adams' The Rosetta Stone to the US Code: A New History of Taxation.

  5. 09/06/2004

    4. The Middle Ages

    Adams speaks of how sad he is for law to have turned from a profession into a simple craft with advertising and politics. He also opposes the medical system. It killed several family members. Lady Godiva’s naked ride on her horse was a protest over taxes.  Ship money for war ships was collected in Britain even though there was then no war. Spain instituted a hated tax called the alcabala, a ten percent tax on the transfer of all real and personal property. It was unfortunately a productive revenue generator. By flight of Spanish taxpayers and fraud of disclosure, the Spaniards struggled to avoid heavy taxes. International law stated that no sovereign would aid another sovereign in collecting taxes. OECD (Organization for Economic Co-operation and Development) changed that, requiring banks to provide burdensome pages of information, driving Americans from foreign banking systems. Cortez and the conquest of Mexico and Pizarro and the conquest of Peru were astounding stories about taxes being the chink in the armor of the Aztec and Inca Rulers. The tax revolt that created modern Germany was inspired by Hans the Piper.  Martin Luther first supported the peasants, but withdrew that support when he saw how destructive the uprisings were. Frederick proclaimed himself King of the Poor, but he couldn’t lower taxes. Low taxes were not possible in a world dominated by military operations. The Ancien Regime was the monarchic, aristocratic, social and political system established in France from about the 15th century until the later 18th century. Most tax investigators and collectors were slaughtered during the French Revolution. Lecture 4 of 10 from Charles Adams' The Rosetta Stone to the US Code: A New History of Taxation.

  6. 09/06/2004

    5. The Swiss: From William Tell to No Tell

    King Solomon, king of Israel from 970 to 931 BC, lusted after women as he grew older. He had a thousand wives and concubines. Solomon spent tax moneys for luxurious palaces and his harem. His treasury was soon empty, so he found new ways to drain money from his people. The Greeks thought that direct taxation caused tyranny. The British had used direct taxation to describe income, poll or land taxes. Excise taxes were considered equally destructive. The European Union requires a VAT – value added tax. Adams dislikes a VAT on top of any income tax. Most any tax is ok if the rate is ok.   Roman General Cerialis told the French people that they should not prefer rebelliousness and ruin to obedience and security. Most rebellions fail. Henry the VIII was nicknamed Bluff King Hal. From a tax standpoint he was Heister Hal. He stole the assets of the Catholic Church throughout England. Queen Elizabeth I was called Good Queen Bess. She was not tempted into wars. She saved the coinage and restored the currency. Despite meager revenues, Elizabeth’s England was on its way to becoming a superpower. Frederick the Great was a true benevolent despot, except with respect to the Jews. Jews couldn’t marry. Sir Robert Walpole, who hated the merchant classes, still abandoned his excise tax as the primary tax for Britain. The British had a good system although they never could find a good tax. The Dutch understood that taxation meant the strangling of trade. The Dutch settled in New York thinking they would avoid all taxes there. New York was seen as the first tax haven. When the rebels win, the taxpayers lose. Examples were the American Revolution and the Dutch. Taxation with representation is worse than taxation without representation. The biblical ten percent is probably what tax should be. Lecture 5 of 10 from Charles Adams' The Rosetta Stone to the US Code: A New History of Taxation.

  7. 09/06/2004

    6. Tax Revolt in the Netherlands

    In this lecture Adams talks about the Enlightenment which was the philosophy of the eighteenth century. It was the high water mark of man’s thinking on taxes. They were wise; we’re not. These thinkers used the past as a guide. Among ten principles of the Enlightenment is Paine’s observation that government is at best a necessary evil. America was the land of liberty because it was a land with low taxes.  Montesquieu wrote that the real wants of the people ought never to give way to the imaginary wants of the state. The Vietnam disaster is an example of this. Governments should stay out of business. Agents think state wealth is inexhaustible. They are careless with expenses. Adams gives examples of the deadly Canadian medical system.  Liberty carries the seeds of its own destruction. Liberty produces excessive taxation because men let their guard down. Direct taxes are the badge of slavery; indirect taxes the badge of liberty. Tax evasion is not a criminal act. Liberty’s most dangerous foe: arbitrary taxation. Common sense economics: the supply siders. The marks of a bad tax system: Adam Smith’s four points. What a good tax system should be:  Lord Kames’ six rules. Lecture 6 of 10 from Charles Adams' The Rosetta Stone to the US Code: A New History of Taxation.

  8. 09/06/2004

    7. After the Magna Carta

    Does liberty sow the seeds of its own destruction? Yes, by consenting to excessive taxes. Government will not want to give up the power. Taxes were to be only for common defense, not offensive wars. The Writ of Assistance is important in American history because the threat of its use caused the founding fathers to place the Fourth Amendment in the Bill of Rights. The Sugar Act treated every trader as a cheat. The Stamp Act drained money from the colonists and united them against Britain. The Boston Tea Party was not about taxes on tea. The protest was over American fears that a monopoly might be granted for tea. Throwing tea into the harbor was wanton destruction of private property. The Articles of Confederation forbade congress from taxing. Rather than amending the Articles, The Constitution was then drafted to give government the power to tax. Theoretically, powers of the federal government were limited to a finite number. It took until 1830 for Americans to pay off the Revolutionary war debts. Hamilton put a tax on whiskey. That was an excise. The Whiskey Boys revolted against it. Then a land tax was attempted. The Fries Rebellion resulted. Lecture 7 of 10 from Charles Adams' The Rosetta Stone to the US Code: A New History of Taxation.

  9. 09/06/2004

    8. The Civil War

    A tariff set the stage for the American Civil War. The quarrel between the North and the South was a fiscal quarrel, not a war over slavery. The tariff of 1828 was called the tariff of abomination. Nullification was a strong argument to void unconstitutional federal laws. The South paid the vast majority of the taxes. Fort Sumter was essentially a useless fort, but it did serve to collect taxes. Secession was the cause of the Civil War, but taxation was the most significant factor. Taxes have been the core of most rebellions throughout history.  Attempts to secede have always been very tough. Sadly, some Southerners did make slavery an argument for secession. Lincoln did not believe in the self-determination of people. Lecture 8 of 10 from Charles Adams' The Rosetta Stone to the US Code: A New History of Taxation.

  10. 09/06/2004

    9. American Taxation

    The Laffer Curve from the 1920s reflects the truism that a 77 percent tax rate produces the same amount of revenue as a 7 percent tax rate. Once the tax rate exceeds twenty-five percent, less will be collected. The first progressive rates took place before the income tax. The British invented the income tax, promising to give it up when the war ended. It didn’t happen. In the Colonies, all taxation was seen as evil. Adams says “socialism comes by seduction, but communism comes by rape.” Lecture 9 of 10 from Charles Adams' The Rosetta Stone to the US Code: A New History of Taxation.

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This series of lectures by tax historian Charles Adams—based on original research—illuminates episodes in light of the tendency of government to tax beyond the point where people will tolerate. This is the fascinating story of how taxes have shaped history. Download the complete audio of this event (ZIP) here.

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    Mises Institute
  • Episodes
    10
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