What Happens When Everyone Pays the Same? A Tax That Keeps Causing Riots

Most taxes scale with something, taking a proportion of income, of spending or of the value of property, so the amount paid reflects capacity to pay. A charge levied per head does not, taking the same sum from everybody, which makes it extremely simple to calculate and collect and means it takes a far larger share of a small income than of a large one. Economists describe the resulting burden as regressive, and the same feature is defended by advocates on the grounds that everybody uses public services and everybody should contribute visibly. The argument about it is therefore about who should bear the cost of government rather than about administration.

The attractions are real and recur in every case:

• •No need to assess income, property or spending
• •Almost no way to avoid or evade it, since everybody is counted
• •Revenue that is predictable and easy to forecast
• •A visible link between local spending and what each resident pays
• •Cheap collection relative to the amount raised
• •A clear political argument about everybody contributing

English taxes of this kind in 1377, 1379 and 1381 fell hardest on the poorest and were levied during a period of intense resentment following labour shortages after the plague, and enforcement of the third produced the rising of 1381, in which rebels took London, executed royal officials and forced concessions from the king before being suppressed. American states used a requirement to pay such a tax as a condition of voting from the late nineteenth century, which disenfranchised poor Black and white voters systematically while appearing neutral on its face, and it was prohibited in federal elections by constitutional amendment in 1964 and in state elections by the Supreme Court two years later. The British community charge introduced in 1989 and 1990 to replace domestic rates provoked mass non-payment, a large riot in central London and contributed directly to the resignation of the prime minister who introduced it.

The system that replaced the community charge in 1993 is itself instructive about how these decisions get made. Council tax is based on the value of a property, which restores the link to capacity to pay, and it places dwellings into a small number of bands rather than charging a proportion of value, which caps the amount the most valuable properties pay and makes the whole thing less progressive than it appears. The bands in England and Scotland still rest on valuations carried out in 1991 and never repeated, so a house built since is assigned a notional 1991 value and relative property price movements over three decades are entirely unreflected. Revaluation is technically straightforward and politically avoided, because it would create losers in visible numbers.

The reactions have been out of proportion to the sums involved, and the reasons are worth separating. The charge is unusually visible, arriving as a demand addressed to a named person rather than being deducted before wages are seen or included in the price of goods, which makes it impossible to ignore. It falls on people who previously paid nothing, since a property-based system charges households while a per-head system charges adults, so large poor households faced enormous increases. It is difficult to reduce by changing behaviour, unlike a tax on spending. And enforcement requires pursuing individuals who genuinely cannot pay, which produces visible hardship and makes the collector rather than the policy the immediate target.

A fixed charge per person is simple to calculate, nearly impossible to avoid and takes a far larger share of a small income than of a large one. English levies provoked the rising of 1381, American states used payment as a voting condition to disenfranchise poor voters until the 1960s, and the British community charge helped end a premiership. The visibility of the demand and its fall on people who previously paid nothing explain the reaction.