Financial Focus On...Pecunia non olet
8th December 2015 by Robin Beadle
Pecunia non olet is a Latin saying that arose first during the reign of Roman Emperor Vaspasian (AD 9-79) and seems to be a good place to start our occasional winter romp through the weird and occasionally wonderful world of taxation.
For those reaching for Google to translate, the translation is “Money does not stink” implying that money should not be tainted by its origins. This argument has been used by governments throughout history to try to raise funds from, to the modern eye, the most unlikely of places. Sometimes the effects are to change social attitudes or lifestyles, other times the result is a little stranger.
Emperor Vaspasian (incidentally whose father Flavius Sabinus was a tax collector) introduced toilets into the Roman Empire from which urine could be taxed as a source of ammonia used in laundry and in tanneries (although it is not certain how it is used). Sprint forward nearly 2,000 years and the State of Maryland, USA, has a “Flush Tax” on its toilets in order to raise funds for flood defences.
Pecunia non olet, but sometimes taxes cause one. Across Europe, a Soap Tax was in force from the Middle Ages – something that Great Britain did not repeal until as late as 1835. In 1784, Britain introduced a tax on hats, which merely led to hat makers stopping calling their creations by that name, and to a tax on any form of headwear in 1804. In 1795 perfume and aromatic powders used on wigs was then taxed which led to the decline and end of that fashion. Sometimes you do try to work out what the government of the time was trying to achieve or whether there were a particularly large number of Opposition MPs who were follically-challenged (bald) at that time.
Of course, whilst the government tax us, we can always change our ways to avoid the taxation. When the window tax was introduced in 1696, people merely started bricking up their windows to pay less tax. Then when a brick tax was introduced in England in the 1700’s, builders merely used larger bricks to use fewer of them and thus pay less tax. So a new tax on larger bricks was introduced. And in 1712, a tax was introduced on printed wallpaper…. so builders simply used plain wallpaper and then painted it after it had been hung. (The Brick tax lasted until 1850 and the window tax until 1851).
On a larger scale, British taxation has affected the world and has sometimes cost us as a nation far more than the sums yielded. The tax on salt in the 1930’s hurt the poor of India, then a British colony, dear. The Salt March, led by Mohandas Ghandi, involved some 60,000 Indians protesting against British rule. India gained independence in 1947.
But probably the most famous act of taxational rebellion came from America who objected to the act of “taxation without representation” leading to the American War of Independence (1775-1783). Of course, once they had gained independence, our American cousins had to create their own Internal Revenue Service (IRS) to collect their own taxes. For regular readers, you will not be surprised to learn that some of the American taxes are just as crazy as our own (they have a tax on stolen property – but if you declare it you automatically incriminate yourself in a court of law) and others just as hard to understand (in Texas, for example, Cowboy boots are exempt from Sales Tax, but Hiking Boots are not. There is also a Texan tax on Christmas decorations that go in windows) .
But if the American taxes seem crazier than ours, bear with them. They have only been writing their tax rules for a relatively short time. We have had taxation in one form or another for over 2,000 years in these islands… and our governments still keep tinkering with the rules.
For further information on any of the above points or to discuss your tax affairs generally, please do not hesitate to contact Robin Beadle.
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