Here’s what happened when they raised taxes 2,000+ years ago

by Simon Black, Sovereign Man:

In 353 BC, as violent class warfare broke out across ancient Greece, one wealthy Athenian lamented in his journal,

When I was a boy, wealth was regarded as a thing so…admirable that almost everyone affected to own more property than he actually possessed. Now a man has to be ready to defend himself against being rich as if it were the worst of crimes.

Ancient Greece had become deeply divided at that point.

The opportunities from new ‘technology’ and new trade routes created a lot of wealth for many people. Others were left behind.

Plato called it “the two cities” of Athens — “one the city of the poor, the other of the rich, the one at war with the other.”

Eventually the poorer citizens were able to take over ancient Greece’s prized democracy. And, putting themselves firmly in control of government institutions, the new politicians came up with the most creative ways of raising taxes, seizing property, and redistributing wealth.

They doubled taxes. Import duties and export fees were increased. Real estate transfer taxes soared.

And even though the city-states were in a time of relative peace, the government continued collecting a special ‘war tax’ to fill its coffers.

Naturally they targeted the wealthiest citizens first.

But their methods weren’t working. The poor remained poor.

So the government raised taxes even more and ‘broadened the base’ to also include most of the middle class.

It still didn’t work. They failed to realize that stealing people’s money doesn’t create long-term prosperity.

Meanwhile, commerce and economic growth ground to a halt. Anyone with any wealth, savings, or assets focused almost exclusively on protecting themselves against government confiscation.

In 355 BC the government established a new, special police force to seize assets and imprison well-to-do citizens.

Violent outbreaks became commonplace. Class warfare erupted. In the 4th century BC, the lower classes in Argos and Mytilene banded together and massacred over 1,200 wealthy citizens.

The ancient Greeks were so busy fighting each other over their own money that when Philip II of Macedon (Alexander the Great’s father) invaded Greece, he was practically welcomed as a liberator.

This is one of the themes from ancient history that keeps surfacing again and again: whenever there is a productive class, there are others who aim to steal from them.

We’re still seeing it 2000+ years later.

I was recently speaking to a friend of mine from South Africa who co-founded a successful software company there.

He works his ass off and has done well for himself.

But he explained to me that his profits, in addition to the normal tax rate, are subject to penalties because the company shareholders don’t meet a specific, racial quota.

I find this totally idiotic.

Productive people… whether they start a business, design software, build a house, write a song, or work on an assembly line, create value. They create prosperity.

In some cases, they even create jobs.

This is exactly the sort of behavior that should be encouraged, not penalized.

Yet this trend persists all over the world, as it has for thousands of years.

Fortunately, there’s a multitude of options to do something about it– to take completely legal steps that dramatically and legitimately reduce the amount that you owe.

In my friend’s case, we talked through ways to use Double Tax Treaties (DTAs) to his advantage.

A DTA is an international agreement in which two countries agree on reduced levels of taxation in the event that their jurisdiction overlaps.

As an example, South Africa has a DTA signed with Hong Kong.

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