When the Privileged Don’t Pay their Fair Share in Taxes, it Can Spark Revolution
The news of President Trump’s secretly obtained tax returns that broke Sunday — detailing that he paid $750 in taxes in 2015 and 2016, and no taxes at all in 10 of the past 15 years — reveals that tax systems are often astonishingly irrational, shielding the wealthy from their civic fiscal responsibilities.
The scale of Trump’s tax avoidance reflects a contradiction in a democratic government that is supposed to be based on equality. And anger over the unfairness of the tax system can result in dramatic political upheavals as a study of French history reveals.
The basis of French society under the Old Regime — that is, before the Revolution of 1789 — was privilege. The most privileged social group was the nobility: Those of noble title enjoyed legal, fiscal and social advantages that others could only dream about.
The tax system made this clear. Early modern French aristocrats were exempted from most forms of taxation. A relic of the late Middle Ages and the idea that they served the crown as warriors, this exemption from the taille (a direct royal tax on people and land) had been fixed in law as a definition of nobility since the 15th century.
When times of war or economic crisis hit, however, French kings and their ministers recognized the foolishness of a system in which the richest people in the realm did not pay. The monarchy would often try to levy “extraordinary” taxes to tap the resources of the privileged. However, efforts to tax the revenue of the nobility and other privileged groups (such as the clergy) were generally met with stiff resistance, and any progressive features were usually curtailed or eliminated. In addition, many members of the elite evaded paying their share of even these extraordinary taxes by making use of their connections to influential government officials.
The result was a system in which aristocrats paid significantly less for public services and the costs of running the French state than did individuals unprotected by privilege. Who provided the state’s tax revenue? The peasantry, who were mired in poverty and unprotected by any form of privilege, contributed the majority of royal taxes as well as myriad other indirect taxes and feudal dues. In fact, a steep increase in royal taxation of the peasantry in the 17th century to pay for constant wars had triggered a series of popular revolts, making the government reluctant to raise rural taxes when the Seven Years’ War (1756-1763) and assistance to the American Revolution (1775-1783) created new and alarming fiscal pressures in the 18th century.