It has been pointed out that taxes first came into use to meet extraordinary needs for funds. When their use became somewhat general some definite system of levy became essential, and the base at first chosen was property - usually land. Records of the tax systems of ancient Greece and Rome have been preserved with sufficient accuracy to indicate the early use of land taxes in these countries. With the development of other forms of property attempts were made to extend the tax systems to include them as a part of the base, so that in reality a general property tax was established. There is no indication, however, that much was attempted in the way of assessing intangible forms of wealth when they began to accumulate.
The history of tax development has been much the same, through the early stages, at least, in most new countries. Practically all the early English taxes were forms of land taxes. Gradually other forms of wealth were added, until a general property tax was the result. An interesting feature to develop very early in the English system was the use of the annual return from the land as the base of the tax, rather than the actual value of the land.
1 In this and the following chapters which treat different kinds of taxes, no attempt will be made, except occasionally, for illustrative purposes, to go into the specific problems of individual states. Those who want to investigate these details should consult such sources as the reports of the State Tax Commissions and the Proceedings of the National Tax Association.
In France, Germany, and Italy, the sequence of events in tax development followed those in England. Land was the first source drawn upon, to which was gradually added the other forms of wealth, until the general property tax was in vogue. Subsequent history shows, however, that as more and more intangible wealth accumulated in the various countries, and as the failure in making fair and equal assessment became apparent, such vigorous opposition developed that the result has been the practical abandonment of the general property tax.
Early American Taxes. - In the American Colonies the use of a tax on property came very early. Funds became necessary, and the officials knew of no better source than the existing evidences of wealth. In the colony of New York, for example, as early as 1654 Peter Stuyvesant succeeded, as previously noted, in having an " honest and fair tax" placed upon "land, houses or lots, and milch cows or draft oxen." Soon after this, under the English rule, the principle of assessing every person in proportion to his aggregate property became the fundamental rule. The principle of property assessment continued to be the center around which all future revenue measures were formulated.
In some of the Colonies the development of the general property tax was gradual. Specific classes of property were designated as the basis for assessment, and frequently the value of the property was regulated by law. Land, horses, cattle, and other forms of property were classified into different grades. Gradually, as the pressure for increased revenue became felt, the category of taxable objects was extended, until it included all forms of property. In some of the Colonies also levies were placed upon certain classes of business and professions.
The necessity of holding land before being admitted to the full rights of citizenship, as well as the provision in the Federal Constitution which forbids the levy of export and import duties by the several states, helped to tighten the grip on property as the chief source of revenue. This situation has continued throughout the development of revenue systems in the various states; consequently, as new forms of wealth appeared, it became inevitable that an attempt be made to assess this wealth by an extension of the general property tax. Although some of the states have recently made efforts to place less reliance on its use, the general property tax still holds the place of primary importance in the revenue systems of most states and localities.