[One Sip of a Book] The Government's Technique for Taking Money from People's Pockets

Some sentences encapsulate the entire content of the book itself, while others instantly resonate with the reader’s heart, creating a connection with the book. Here, we introduce such meaningful sentences excerpted from the book. - Editor’s note

The book covers topics such as fairness issues (vertical equity and horizontal equity), tax incidence, efficiency and optimal taxation, tax collectors, tax policy, and future challenges through engaging episodes. It includes case studies from various countries such as South America, India, and Africa, and mentions Korea three times. In the preface, the authors state that Korea’s taxes are relatively lower compared to the tax standards of developed countries. They also explore the effects of tax policies such as providing tax deduction benefits during year-end tax settlements based on credit card usage and collecting many earmarked taxes.

One of the main methods governments use to actually make people pay taxes is to make them aware that violating tax orders will result in fines or penalties. More generally, rulers have learned from history how to turn law enforcement into a profitable business. Hammurabi, king of Babylon (reigned 1792?1750 BCE), declared that stealing livestock would be punished with a fine amounting to 30 times the value of the stolen animals. In ancient Rome, anyone caught diverting water channels at will had to pay an enormous fine of 100,000 sesterces.

- From Chapter 3, “Taxes by Another Name”

It may sound unappealing, but income tax today is considered a fairly decent tax system because it plays a key role in achieving vertical equity?how taxes should be distributed between the rich and the poor. Politicians often call for abolishing value-added tax or property tax (at least outside the United States), but rarely do they advocate for completely abolishing income tax. Of course, some promise to lower the applicable tax rates. Rather, developing countries tend to want and encourage making income tax more effective rather than replacing it with something else. However, this has not always been the case.

- From Chapter 5, “The Giant Engine of National Finance”

Throughout human history, racial abuse has always had a far greater impact than tax discrimination, but race and taxes have often been closely intertwined. This phenomenon is most severe in the United States. The intertwining of race and taxes in the U.S. dates back to the era of slavery. At that time, colonial revenues came largely from taxes on imported slaves and poll taxes imposed on them. After the American Revolutionary War, some states surfaced poll taxes as a substitute for property in setting voting eligibility criteria. In the early 19th century, many states required tax payment as a prerequisite for voter registration. However, poll taxes became an implicit (even if entirely transparent) form of racial discrimination only after the Civil War abolished the ‘peculiar institution’ of slavery.

- From Chapter 6, “Who Is More Equal?”

The Dark History of Taxes | Michael Keen & Joel Slemrod | Translated by Hong Seok-yoon | Sejong Books | 568 pages | 22,000 KRW

This content was produced with the assistance of AI translation services.