How They Did It - Paying Taxes in Ancient Rome

Welcome to How They Did It, a show where we take a look at the daily lives of our ancestors. It's often been said that nothing in this world is certain but death and taxes. This has been true for countless generations since the dawn of our earliest civilizations. Today we'll examine the experiences of taxpayers and collectors in the Roman world. In modern times we're familiar with a system of taxation which collects fees on a wide range of economic activities such as income, payroll, property, sales, capital gains, dividends, imports, estates, and gifts. The list often seems to go on and on. This huge administrative task is imposed and enforced by the government and often falls under the purview of a powerful bureaucratic body such as the IRS in the United States. Travel back several thousand years before the rise of such institutions and one wonders how taxes were collected. Well, in the early days of the Republic when the city was small Rome actually collected its own taxes. This was rather primitive and these taxes were mostly levied as a percentage of an individual's wealth as opposed to income that governments do nowadays. So the way they would have done this in the past is you would actually literally send someone out and they would include measurements of someone's land, their homes, the real estate, slaves, animals, personal items, and monetary holdings. So you can imagine someone walking out there in the fields to a local estate and just counting up all these quantities and trying to make a rough assessment of just how much is this person worth in terms of their wealth, how much goods and monetary possessions do they have. And then they take this total valuation and they would use this to assess an individual's overall wealth and then you know tally this every five years as a part of a census. And then this data would then in turn be used to put someone into a certain property class and this was actually built into the way Romans actually configured their military obligations with the wealthiest being expected to supply you know more equipment and armor and be in a certain class of the military system whereas you know the more impoverished folks would probably have less stuff to their name. And you have this superimposed with you know wealth class and then also age groups and that's eventually what forms kind of the the basis of the development of the Roman legions. But anyways that's an aside. So back to the taxes at hand here. So when they're collecting these taxes rates would generally be fixed for the various classes and are estimated to have been around one percent under normal circumstances. However in the case of an emergency like a upcoming war or raid or something going on, taxes might be increased to around three percent we calculate. And these are all kind of rough figures but you get a sense of what's going on here. However as Rome grew it became harder and harder to properly assess wealth accurately and then in turn collect taxes efficiently. In addition conquests increasingly made up more and more of the state's revenue reducing the need to focus on developing a proper state managed system of taxation. In fact by 167 BC the republic had so enriched itself through war that it no longer needed to levy a wealth tax on its Italian citizens. Though we have to admit that they still did pay some form of vectigalia which were essentially duties on things like imports, exports or the use of public land. So you can never really get away from paying taxes. In any case with the tax burden shifting to the provinces and the small republic quickly transforming into a sprawling empire a new unique system of tax collection would emerge. What we find is that Rome's rapid rise to power in the Mediterranean quickly outpaced its ability to keep up administratively. When new provinces were added their governance was usually granted to a consul or proconsul and their associated staff which numbered no more than a dozen or maybe a couple dozen. Though such rule was theoretically unlimited in reality and in all practicality this small group of Roman officials had to rely quite heavily on local administrative institutions for support. When it came to collecting taxes they also sought outside help. What developed was a system of tax farming whereby the Roman government privatized its tax collection. The system worked as follows. First Roman officials would estimate the approximate tax to Next they would host an auction to give away the rights to collect this money on their behalf. This would be attended by publicani or private contractors who were actually involved in a lot of the Roman economy but in this case will be dealing with their activities when it came to taxes. Here at the auction let's say for instance the government had said that they wanted to collect 1 million sesterces. What would happen is these publicani would come in with their company and say hey I will be able to collect 1.1 million sesterces and then the next one would say 1.2 million and eventually whoever basically had the highest bid would win the contract. Now what would happen is they would have the government backing to go ahead and collect those taxes. This was to a benefit to the Roman government in that basically it reduced their administrative burden and risks and they could count on setting a fixed amount of taxes and getting that for sure despite whatever economic fluctuations they could expect to get that money up front and so it made it very consistent and low risk. The benefit for the publicani was that even if they may have won just a bid for you know let's say 1.3 million sesterces that 1.3 million sesterces that was in the hole well when they went to the provinces they would be able to collect that and far more so uh you know because they had the backing of Roman authorities they could call on legions they could call on the help of local governors and they could even pay thugs to collect the taxes at sword point and so yeah maybe they you know had to pay the government but at the end of the day they could maybe even collect 2 million or more sesterces and just line their pockets with tons of money and the amount of money to be made here was surely a huge problem because it led to ridiculous amounts of corruption, exploitation, and oppression. Bribes would be paid to Roman administrators to ensure that they looked the other way and you'd have all kinds of shenanigans. Such was the wealth of the provinces especially in the east that politicians would virtually bankrupt themselves to gain control of one with the expectation that they would quickly recoup any losses with huge profits and become fabulously wealthy. Even Crassus who was renowned for his wealth found his own 200 million sesterces dwarfed by funds raised by his colleagues plundering the provinces. His rival Pompey for instance was said to have been able to buy and sell Crassus many times over with the silver and gold he had collected. This exploitation however did not go unchallenged. Heavy taxation at the hands of the publicani often pushed the population into unrest or revolt. Sometimes excessive taxation was even regulated by the Romans though this was less for altruistic reasons than the machinations of jealous politicians seeking to curb the money-gathering operations of their rivals. During the civil wars at the end of the republic the system of tax farming saw a decline as a result of economic disruption and the fact that generals and their armies were now the ones raising their own funds. With the transition to empire Augustus made many reforms which included a return to direct taxation where each province was required to pay a wealth tax of around 1% and a flat pull tax on adults. Succeeding Roman emperors managed to restrict some of the worst abuses in provincial administration but never entirely eliminated them. As the Roman empire progressed it became increasingly organized. Diocletian for instance centralized taxation greatly expanding the control of the Roman bureaucracy. Yet despite these developments the Roman administrative system remained very much disconnected from the day-to-day activities of taxation once again relying heavily on intermediaries such as local elites and town councilors. By comparison the administration of second century China is believed to have had around 25 times as many elite administrators at work in the provinces as the Roman government. I find such topics truly fascinating and I hope you enjoyed this foray into ancient economics. Stay tuned for more episodes of how they did it and definitely let me know what you think about this particular topic and what you like to see for future topics in the comments below. And finally don't forget to pay your taxes.