Yesterday was tax day in the US, the day when federal, and I believe most state, income tax forms must be filed.  For many years I used to do my taxes by myself, and this day was certainly a worry for me.  A couple of years ago, however, due to income from my writing which came to define me, in the eyes of the tax authorities, as an independent business (and my wife, due to her various forms of community involvement became an independent contractor), I turned to an accountant.  Paying someone else to figure out what I must pay the government does take some of the pain out of it….

    In any event, I realized yesterday that I should do a post on Mencuis and taxes.  He has much to say on the topic.  But the idea popped into my head as I was cleaning the dishes after dinner and my text was not there with me.  But it is here with me now, so let’s jump right in.

    Mencius is a low tax man.  I suspect that he calls for limited taxes because, in his time, a serious source of injustice and inequality was rapacious abuse of state power to extract revenue from society.  Notice in this passage how he focuses on rents as opposed to taxes or tariffs or tribute:

Collect rent in the markets but no tax, or enforce laws but collect no rent – then every merchant throughout all beneath Heaven will rejoice and long to trade in your markets.  Conduct inspections at the border but collect no tax – then every traveler throughout all beneath Heaven will rejoice and long to travel your roads.    Have farmers help with public fields but collect no tax – then every farmer in all beneath Heaven will rejoice and long to work your land.  Don’t demand tributes in cloth from families and villages – then people throughout all beneath Heaven will rejoice and long to become your subjects.  (3.5)

    He understands the state’s need for revenue, but "rent" here suggests limited and fixed annual (or some period of time, monthly…) levy.  While a percentage of the value of production or commerce might yield higher receipts for the government, it would also impose greater burdens on society.

      We should not take from the passage above the idea that Mencius was anti-tax.  No.  He was interested in limiting taxation.  The famous well field system that he advocated, which reserved one farm plot out of nine for communal work and aristocratic requisition, could be understood as a form of taxation.  Thus, Mencius says:

In the countryside, tax people one ninth of their produce, according to the well-field system.  In the capital, tax people one tenth of their income.  (5.3)

    Notice that city dwellers, which would include businessmen and other professionals, must also pay an income tax.  It is a flat tax.  Although the overall system is mildly regressive (10% tax rate for "rich" city dwellers, and an 11% rate for poorer farmers), there is a minimum welfare that he would guarantee to all people – access to land and livelihood.

       (Notice, too, in the same passage 5.3 Mencius seems to support the infamous PRC hukou system when he says: "People should never leave their village – not when they move their houses and not when they die.")

     He also warns about not taxing enough, something that uncivilized governments do.  Indeed, "barbarians" tax at very low rates precisely because they do not have the finer institutions and practices of higher civilization to maintain   Here’s how  Mencius replies when asked if a tax rate of one part in twenty (5%) is sufficient as it is for the "Northern barbarians":

    Northern barbarians don’t grow the five grains, only millet.  They have no city walls or buildings, no ancestral temples, no sacrificial rituals.  The have no august lords, no diplomatic hospitality or gifts.  And they don’t have the hundred government offices and officials.  That why one part in twenty is enough tax for them.  but here in the Middle Kingdom(s), how can we do without noble-minded leaders and the bond of human community? (12.10)

     Makes me think of Oliver Wendell Holmes’ famous line: "taxes are what we pay for living in a civilized society."