The Roman emperor Caracalla was the Rachel Reeves of the Third Century. In what seemed an extraordinarily generous gesture, he handed citizenship to all the inhabitants of the empire.
This gave 30 million people previously considered a bunch of barbarians the same rights as native-born Romans. This caused some consternation at the time. It would be like handing out British passports to every cross-Channel migrant stepping off an RNLI boat at Dover.
But there was method to this apparent madness. As citizens the barbarians suddenly discovered that, for the first time, they were liable for taxes on their slaves and inheritances. The denarii flooded in.
Our Chancellor intends to be extraordinarily generous to the NHS in next week’s budget, earmarking around £9billion to help Health Secretary Wes Streeting along with his 10 year reform plan.
But to do it, Reeves will have to embark on what is being billed in some quarters as the biggest tax hike in history.
Our rulers down the ages have found some weird and not so wonderful ways to dream up new methods of raising money – while the resourceful taxpayer has found equally ingenious ways to avoid paying it.
Patterned wallpaper was taxed at a shilling a yard in 1809 – that’s £3.07 in today’s money. Tax avoiders bought plain wallpaper instead and drew their own patterns on it.
Wigs began to go out of fashion when a tax was imposed in 1795 on the aromatic powders which made them smell nice. A levy on playing cards – with the Ace of Spades stamped to show it had been paid – began in 1710 and was only abolished in 1960.
A 1700s tax on the number of bricks used fell flat when builders made bigger bricks to use fewer of them, while a tax on hats failed to take off because milliners just called them something else.
The phrase “daylight robbery” came from the charge levied on windows between 1698-1851, a wealth tax on the rich on the basis bigger houses had more windows. The owners bricked them up.
Now Reeves has her sights set on Stamp Duty, another ancient tax which shouldn’t exist at all because unlike other revenue raisers the government does nothing in return for it. Yet a million people a year have to pay it.
Under the present system, home buyers pay five per cent on properties above £250,000, 10 per cent over £925,000 and 12 per cent on more than £1.5million. First-time buyers are exempt up to £425,000.
Now Reeves is reported to be thinking of making first-timers cough up more by reducing their tax relief to £300,000.
Critics say the tax should be abandoned altogether because it distorts the housing market by making properties needlessly more expensive. The name comes from the stamp needed to legalise documents.
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And when Stamp Duty was introduced in 1694 it was only meant to be temporary anyway – to pay for a four year war against France. But it was such an easy source of funds the Treasury has been lining its pockets with it ever since.
The reason Reeves is casting around for little taxes to raise is because she can’t touch the big ones – income and sales tax, and employee National Insurance. With £40billion to find, she probably regrets her election promise not to increase them.
Employer National Insurance is the last big tax left. It raises more than £100billion a year so a couple of points on the current 13.8 per cent would be quite a windfall.
And it makes what she can squeeze out of non-doms and parents who send their children to private schools look like small change, especially if the first lot up sticks and leaves the country and mums and dads withdraw their kids and shovel them into the state sector.
But then everyone who has to pay more tax squinnies about it, and these are likely to be empty threats. Only 100 of the 26,000 non-doms are predicted to skedaddle, and school fees have already gone up 55 per cent in real terms over the last 20 years without a drop in pupil numbers.
Capital gains tax looks like another target, and there would be a certain social justice in that. It seems an odd system that taxes high earners at 45 per cent on income from work but only 20 per cent on income from selling assets.
And if it’s any consolation there’s one person who has already stumped up a shedload of wonga. The Tories had a peek at Keir Starmer’s most recent tax return and discovered he made £275,739 from the disposal of assets.
The PM had to shell out £52,688 in CGT on that. But should he be short of a few bob there are always some suits and specs he could sell off.