One of the characteristics of the ancient state was its extensive control over the persons and property of its citizens. In respect to finance this authority was strikingly manifested in the burdens imposed on wealthy citizens by the requirements of the “liturgies” (λειτουργίαι), which consisted in the provision of a chorus for theatrical performances, or defraying the expenses of the public games, or, finally, the equipment of a ship, “the trierarchy,” which was economically and politically the most important. Athenian statesmanship in the time of Demosthenes was gravely exercised to make this form of contribution more effective. The grouping into classes and the privilege of exchanging property, granted to the contributor against any one whom he believed entitled to take his place, are marks of the defective economic and financial organization of the age.
Amongst taxes strictly so called were the market dues or tolls, which in some cases approximated to excise duties, though in their actual mode of levy they were closely similar to the octrois of modern times. Of greater importance were the customs duties on imports and exports. These at the great period of Athenian history were only 2%. The prohibition of export of corn was an economic rather than a financial provision. In the treatment of her subject allies Athens was more rigorous, general import and export duties of 5% being imposed on their trade. The high cost of carriage, and the need of encouraging commerce in a community relying on external sources for its food supply, help to explain the comparatively low rates adopted. Neither as financial nor as protective expedients were the custom duties of classical societies of much importance.
Direct taxation received much greater expansion. A special levy on the class of resident aliens (μετοίκιον), probably paralleled by a duty on slaves, was in force. A far more important source of revenue was the general tax on property (εἰσφορά), which according to one view existed as early as the time of Solon, who made it a part of his constitutional system. Modern inquiry, however, tends towards the conclusion that it was under the stress of the Peloponnesian War that this impost was introduced (428 B.C.). At first it was only levied at irregular intervals; afterwards, in 378 B.C., it became a permanent tax based on elaborate valuation under which the richer members paid on a larger quota of their capital; in the case of the wealthiest class the taxable quota was taken as one-fifth, smaller fractions being adopted for those belonging to the other divisions. The assessment (τίμημα) included all the property of the contributor, whose accuracy in making full returns was safeguarded by the right given to other citizens to proceed against him for fraudulent under-valuation. A further support was provided in the reform of 378 B.C. by the establishment of the symmories, or groups of tax-paying citizens; the wealthier members of each group being responsible for the tax payments of all the members.
The scanty and obscure references to finance, and to economic matters generally, in classical literature do not elucidate all the details of the system; but the analogies of other countries, e.g. the mode of levying the taille in 18th century France and the “tenth and fifteenth” in medieval England, make it tolerably plain that in the 4th century B.C. the Athenian state had developed a mode of taxation on property which raised those questions of just distribution and effective valuation that present themselves in the latest tax systems of the modern world. Taken together with the liturgies, the “eisphora” placed a very heavy burden on the wealthier citizens, and this financial pressure accounts in great part for the hostility of the rich towards the democratic constitution that facilitated the imposition of graduated taxation and super-taxes—to use modern terms—on the larger incomes. The normal yield of the property tax is reported as 60 talents (£14,400); but on special occasions it reached 200 talents (£48,000), or about one-sixth of the total receipts.
On the administrative side also remarkable advances were made by the entrusting of military expenditure to the “generals,” and in the 4th century B.C. by the appointment of an administrator whose duty it was to distribute the revenue of the state under the directions of the assembly. The absence of settled public law and the influence of direct democracy made a complete ministry of finance impossible.
The Athenian “hegemony” in its earlier and later phases had an important financial side. The confederacy of Delos made provision for the collection of a revenue (φόρος) from the members of the league, which was employed at first for defence against Persian aggression, but afterwards was at the disposal of Athens as the ruling state. The annual collection of 460 talents (£110,400) shows sufficiently the magnitude of the league.
Too little is known of the financial methods of the other Greek states and of the Macedonian kingdoms to allow of any definite account of their position. In the latter, particularly in Egypt, the methods of the earlier rulers probably survived. Their finance, like their social life generally, exhibited a blending of Hellenic and barbarian elements. The older land-taxes were probably accompanied by import dues and taxes on property.
In the infancy of the Roman republic its revenues were of the kind usual in such communities. The public land yielded receipts which may indifferently be regarded as rents or taxes; the citizens contributed their services or Roman. commodities, and dues were raised on certain articles coming to market. With the progress of the Roman dominion the financial organization grew in extent. In order to meet the cost of the early wars a special contribution from property (tributum ex censu) was levied at times of emergency, though it was in some cases regarded as an advance to be repaid when the occasion of expense was over. Owing to the great military successes, and the consequent increase of the other sources of revenue, it became feasible to suspend the tributum in 167 B.C., and it was not again levied till after the death of Julius Caesar. From this date the expenses of the Roman state “were undisguisedly supported by the taxation of the provinces.” Neither the state monopolies nor the public land in Italy afforded any appreciable revenue. The other charges that affected Italy were the 5% duty on manumissions, and customs dues on seaborne imports. But with the acquisition of the important provinces of Sicily, Spain and Africa, the formation of a tax system based on the tributes of the dependencies became possible. To a great extent the pre-existing forms of revenue were retained, but were gradually systematized. In legal theory the land of conquered communities passed into the ownership of the Roman state; in practice a revenue was obtained through land taxes in the form of either tithes (decumae) or money payments (stipendia). To the latter were adjoined capitation and trade taxes (the tributum capitis). For pasture land a special rent was paid. In some provinces (e.g. Sicily) payment in produce was preferred, as affording the supply needed for the free distribution of corn at Rome.
The great form of indirect taxation consisted in the customs dues (portoria), which were collected at the provincial boundaries and varied in amount, though the maximum did not exceed 5%. Under the same head were included the town dues (or octrois). Further, the local administration was charged on the district concerned, and requisitions for the public service were frequently made on the provincial communities. Supplies of grain, ships and timber for military use were often demanded.
The methods of levy may be regarded as an additional tax. “Vexation,” as Adam Smith remarks, “though not strictly speaking expense, is certainly equivalent to the expense at which every man would be willing to redeem himself from it”; and the Roman system was extraordinarily vexatious. From an early date the collection of the taxes had been farmed out to companies of contractors (societates vectigales), who became a by-word for rapacity. Being bound to pay a stated sum to the public authorities these publicani naturally aimed at extracting the largest possible amount from the unfortunate provincials, and, as they belonged to the Roman capitalist class, they were able to influence the provincial governors. Undue claims on the part of the tax collectors were aggravated by the extortion of the public officials. The defects of the financial organization were a serious influence in the complex of causes that brought about the fall of the Republic.