Tributes, Tariffs, Taxes and Trade: The Changing Sources of Government Revenue

Abstract

Government action presupposes extraction. Historically, four different sources of public revenue may be distinguished. Tributes, which are common in peimitive and belligerent states, are variable levies exacted at irregular intervals. Tariffs raised on the basis of the physical control of strategic passageways are important sources of income for mercantile states in the early stage of their development. Taxes play some role in semi modern economies but evolve more fully as the financial mainstay of government in advanced industrial societies. In addition, many states draw large receipts from the profits of trade. The planned economies in the socialist bloc are trading states rather than tax states. The different logistic properties of these revenue sources affect the prospects for government growth at various stages of economic development. The expansion of the tax state is strongly linked to the proliferation of monetary flows in modern society. At the same time, some non tax receipts such as user charges and other incomes from trade retain their importance, and the present ‘crisis of the tax state’ might possibly lead to a more composite structure of government revenue.