Taxes in Ancient China. 1,300 BCE—280 CE

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“Taxes in Ancient China” is the next chapter from the upcoming book “Taxes: History and Modern Times.” The period covered extends from roughly 1300 BCE to 280 CE.

BASIC CONCEPTS OF TAXATION IN ANCIENT CHINA

Land cadaster, tax policy, tax fairness, well-field system, sustenance system.

FIRST DYNASTIES

The development of civilization in China began in the Yellow River basin over 5,000 years ago. Legends and myths contain references to the reign of three rulers and five emperors. After them, China was ruled by the Xia dynasty (2070–1600 BCE). That dynasty was replaced by the Shang dynasty (1600–1046 BCE), and the kingdom became known as Shang-Yin.

Ancient China’s economy was based on farming. Along with soldiering, this occupation was considered the most honorable. All the land in the country belonged to the ruler. Peasants had to pay a tax for using it. During the Xia dynasty, the amount of payment was calculated according to the gong system, based on the average harvest for several years. Regardless of the actual harvest, a fixed part of it was taken. In lean years, this led farmers to ruin and starvation.

In the kingdom of Shang-Yin, the lands allocated to communities were divided into state and family allotments. Community members cultivated the state allotments jointly and provided the resulting harvest to the treasury as a tax. This taxation system was called zhu.

TAXES IN THE ZHOU KINGDOM

The Zhou kingdom that emerged after the Shang-Yin (1046–221 BCE) existed for more than eight centuries.

At that time, a sustenance system was widespread: local officials were maintained at the expense of the community. On the one hand, this system kept officials interested in increasing yields but, on the other hand, it often led to abuse.

Patronymy, that is, the unification of families of the same clan, replaced the communal structure. Families received and cultivated land plots for three years. Then the land plots were forcibly swapped. This was justified by different yields between lands. It was considered unfair that some people might always have low-yielding plots, while others worked high-yielding ones. However, the process of transferring land from one family to another occasionally caused discontent and unrest among residents.

Plots were exchanged based on records about lands and their productivity, which laid the foundation for the land cadaster.

POWER AND TAXES

The kingdom was headed by the ruler—wang (“Son of Heaven”), an intermediary between the people and the supreme deity before whom the ruler was accountable for the welfare of his subjects. The ruler was considered the most generous, gifted, and enlightened person. Heaven had endowed him with the divine supernatural power of de, allowing him to control the world, the seasons, the weather, and thereby ensure the prosperity of his subjects. In return, the subjects had to pay taxes and perform various obligations as part of civil conscription.

Some thoughts about the perfect system of government are set out in the Book of Documents (Shujing or Book of History). The events and ideas in this book pertain to ancient Chinese history. Its editing is attributed to Confucius (ca. 551–479 BCE).

The book contains rules for decent behavior, speeches, views, perceptions, and thoughts for people and the ruler. According to these rules, the ruler had to perform eight management tasks: control food availability, trade, sacrifices, public works, education, prisoners, the army, and foreign guests. These instructions were to be the basis for dealing with state matters important for the general ordering of the world, including the administrative structure, the appointment of officials, and the introduction of taxes and civil conscription.

CONFUCIAN IDEAS

The first theoretical foundations of the country’s tax system were proposed by the Chinese philosopher Confucius. Confucius blamed unreasonable rulers who levied huge taxes on farmers even in lean years, causing famine and ruin. Apparently, the abuses he witnessed prompted him to take up the issue of taxation.

Confucius was one of the first to formulate ideas about tax fairness and tax policy regulations limiting tyrannical rulers. According to the philosopher, ideal government and taxation rules should exist, and as emperors, as “Sons of Heaven,” should follow them. What’s more, the people had the right to remove an emperor who did not adhere to these standards.

In Confucius’s opinion, taxes should be limited to ten percent of a person’s income.

SHANG YANG’ REFORM

In the 4th century BCE, Shang Yang (Gongsun Yang, 390–338 BCE), the ruler of the Shang region, implemented reforms to strengthen the state. He focused on the development of agriculture, introduced private ownership of land, and legalized its unrestricted purchase and sale. To develop conquered lands, he exempted colonists from taxes for ten years. Large families who jointly farmed the land were forcibly separated: families of parents and children paid the tax individually.

For each farm, a fixed in-kind tax was established as a share of the harvest.

A population census was conducted to keep records of households. Historical documents mention thirteen types of censuses, including separate counting of rich residents, adult men and women, military leaders, and officials, the elderly and infirm, etc. Livestock and fodder were also counted.

Switching to a fixed tax made it possible to abandon the sustenance system. Funds for the maintenance of officials began to be allocated from the state treasury.

Frankpledge was introduced to ensure compliance with the law. The population was divided into groups of five or ten families. They had to keep an eye on their neighbors and report on crimes, including tax violations. Non-reporting was punishable by death, but denunciation was encouraged.

Shang Yang supported a state monopoly on salt and mines. Viewing mine owners as lazy people who did not like farming and received double profits, he imposed extra taxes on them.

Shang Yang considered trade to be a harmful activity and proposed to impose a tax on the sale of meat and wine, ten times higher than their initial price. He believed that drinking and gluttony distracted officials from their service, and farmers from cultivating the land.

MENCIUS’S IDEAS

Mencius (372–289 BCE), a follower of Confucius, gave a lot of thought to taxation. According to him, fair taxes had already existed in the old days, during the Wei kingdom (around the 5th–4th centuries BCE) under the rule of Wen of Wei.

“If, in his [a ruler’s] markets, where there are taxes on stall inventories there is no tax on goods sold, and where there is a tax upon the land that stalls occupy stall inventory is not taxed, then the merchants of the world will appreciate him and wish to store their goods at his markets.

If he taxes ploughmen with corvée work on his lands and does not tax their crops, then the farmers of the world will appreciate him and seek to plough the untilled lands in his realm.”

Mencius.^[4]

According to Mencius, old people, orphans, widows, and widowers were exempt from taxes at that time. Farmers paid one-ninth of their income to the government, with no additional taxes, such as merchant fees for entering the market. We can assume that such fees existed at the time of Mencius. He opposed such payments and argued that a tax ought to be taken after a person has already made a profit, and not when he is going to sell something.

Mencius was against customs duties and taxation of farmhands. He believed that the abolishment of excessive payments could ensure peace inside the country and the absence of external enemies.

Mencius also mentioned the well-field system for the taxation of farmers. He recommended dividing the territory into nine parts. Eight plots were to belong to eight families, while the ninth, the central one, was to be cultivated jointly. This plot was supposed to be cultivated first, since the harvest it produced went to the government.

Historians tend to believe that this system never really existed. It was probably a utopian idealization of a system with public and personal fields that had existed in earlier times.

According to Mencius, city dwellers were supposed to give 1/10 of their income to the treasury. Countering opponents who proposed to reduce taxes, he said that small tax revenues would be enough for a barbaric society, but not for a civilized one which needed to build temples and maintain rulers. Mencius considered a tithe as a kind of golden mean: tax cuts lead to barbarism, tax increases to tyranny.

FIRST EMPIRE

China’s first emperor was Qin Shi Huang (258–210 BCE). He divided the country into 36 regions headed by governors. Confucian ideas were declared harmful, and their supporters were executed.

During the First Empire (221–206 BCE), a major part of the Great Wall of China was built. As this large-scale construction required significant funds, tax rates were increased from 10 to 50%. In addition, many farmers worked at the construction site as part of civil conscription.

HAN EMPIRE

The new empire (206 BC–220 CE), which arose after the fall of the First Empire and the subsequent civil war, was created by Gaozu (born Liu Bang, ca. 256–195 BCE).

To develop agriculture, Gaozu returned rights to farmers, who had sold themselves into slavery under the threat of starvation. He also reduced taxes to 1/15 of the harvest. He increased taxes on trade to keep the merchant class under control.

His son Xiaowendi (202–157 BCE) continued this work by reducing government spending and abolishing corporal punishment and taxes on farmers.

Under the emperor Jingdi (188–141 BCE), the tax on farmers was 1/30 of their harvest, which led not to a decrease, but rather a significant increase in treasury revenues and the accumulation of grain in state granaries.

EMPEROR WUDI’S REFORMS

The next emperor, Wudi (156–87 BCE), was a spendthrift (significant funds were spent to maintain palaces and his hundreds of wives and concubines) but still initiated large-scale construction projects, expanded the territory of the country, and introduced various reforms. Under his rule, Confucianism was revived.

During the reign of Wudi, officials began to be trained at special educational institutions, where any free person could enroll, pass the exam, and become a civil servant. Local officials were obliged to look for bright young men and send them to study.

The farming tax rate returned to 1/15 of the harvest. This tax was paid in kind.

A poll tax was introduced. It was paid with money and amounted to 120 wuzhus for adult men and women from 15 to 56 years old and 20 wuzhus for children from 7 to 14 years old. The population had reached 60 million people, so this brought large revenues to the treasury.

The need to pay taxes using money stimulated trade.

Wudi raised taxes for merchants by five times, and for artisans by 2.5 times. He introduced a duty on market trade and other taxes, such as taxes on real estate and transport (cattle, carts, boats).

In addition to taxes, there were civil and military conscriptions. Every man aged 15 to 56 years had to serve in the army for one month a year. It was possible to opt out of this service by paying a special tax.

Wudi realized Shang Yang’s idea, establishing a monopoly on the production of iron and salt. Mines and equipment were provided for the use of private individuals who were obliged to pay taxes to the imperial treasury.

LAND REFORMS

In 9 CE, under Wang Mang, the Xin Empire began to abolish land transactions and private land ownership. He made all lands imperial, banned their sale and purchase, and restored communal land use. However, these reforms did not last long. In 23 CE, Wang Mang was overthrown, and all his decrees were rescinded.

TAXES IN THE THREE KINGDOMS PERIOD

From 220 to 280, the country was divided into three independent states: Wei, Wu, and Shu. The largest of them was the Wei kingdom. Its state lands were divided into arable, commercial, and estate plots and provided to the population.

Arable lands were allocated to a family, considering all its members and slaves. For women and slaves, the size of the plot was half of the allotment of a free adult man. Additionally, land was granted for grazing. The amount of land was based on the number of animals. When the number of family members decreased or increased, the size of the allotment changed accordingly. People had to pay a land tax on arable lands with the products grown on them.

Commercial land plots were granted to a family. Users of such land grew mulberry, the leaves of which were fed to silkworms; hemp, which was used for medical purposes; and tea, sugarcane, cotton, and other crops. The tax on commercial lands was paid with goods.

Estate land was used for housing and outbuildings, and its size depended on the number of family members. It wasn’t taxed.

In 280, in the Jin kingdom, the then-ruling emperor Sima Yan (236–290) introduced state land ownership and an allotment-based system of land use. Farmers received allotments and were obliged to pay an in-kind tax, the amount of which depended on the area of the plot. Additionally, a grain tax based on the number of employees was imposed. Some of the in-kind taxes later began to be paid with money.

A large staff of officials was required to manage the allotment system. They received official allotments cultivated by residents. Loss of position meant loss of land. Taxes on the allotments went to the official, not to the treasury.

Later, after the reunification of China in the 5th–6th centuries, the allotment system was spread throughout the whole country.

The imperial period lasted until 1912, when the Xinhai Revolution overthrew the Qing (Manchu) dynasty and created the Republic of China.

[1] Image by Anandajoti Bhikkhu from Sadao, Thailand (https://commons.wikimedia.org/wiki/File:022_Confuscius,_Close_Up_(25596184507).jpg), „022 Confuscius, Close Up (25596184507),“ https://creativecommons.org/licenses/by/2.0/legalcode

[2] Image by Fanghong (https://commons.wikimedia.org/wiki/File:Statue_of_Shang_Yang.jpg), „Statue of Shang Yang,“ https://creativecommons.org/licenses/by-sa/3.0/legalcode

[3] Image by National Palace Museum. Unknown author (https://commons.wikimedia.org/wiki/File:Half_Portraits_of_the_Great_Sage_and_Virtuous_Men_of_Old_-_Meng_Ke_(孟軻).jpg), „Half Portraits of the Great Sage and Virtuous Men of Old – Meng Ke (孟軻),“ marked as public domain, more details on Wikimedia Commons: https://commons.wikimedia.org/wiki/Template:PD-old

[4] Cited in “Mencius: A Teaching Translation.” Eno, Robert. 2016. URI: https://hdl.handle.net/2022/23421. Accessed: July 19, 2023.
The term “corvée” denotes a tax exacted in the form of compulsory labor.

[5] Image by Yug (https://commons.wikimedia.org/wiki/File:Well-field_system-en.svg), „Well-field system-en,“ marked as public domain, more details on Wikimedia Commons: https://commons.wikimedia.org/wiki/Template:PD-self

[6] Image by Meidosensei. Unknown author (https://commons.wikimedia.org/wiki/File:Qinshihuang.jpg), „Qinshihuang,“ marked as public domain, more details on Wikimedia Commons: https://commons.wikimedia.org/wiki/Template:PD-old

[7] Image by Adece033090. Unknown author (https://commons.wikimedia.org/wiki/File:Liu-bang.jpg), „Liu-bang,“ marked as public domain, more details on Wikimedia Commons: https://commons.wikimedia.org/wiki/Template:PD-old

[8] Image by Brücke-Osteuropa (https://commons.wikimedia.org/wiki/File:Han_Jingdi.jpg), „Han Jingdi,“ marked as public domain, more details on Wikimedia Commons: https://commons.wikimedia.org/wiki/Template:PD-self

[9] Image by Yan Li-pen (https://commons.wikimedia.org/wiki/File:Jin_Wu_Di.jpg), „Jin Wu Di,“ marked as public domain, more details on Wikimedia Commons: https://commons.wikimedia.org/wiki/Template:PD-old

[10] Image by Prof. Gary Lee Todd (https://commons.wikimedia.org/wiki/File:S-114_W_Han_wuzhu,_Han_Wudi,_140-87,_25_5mm.jpg), https://creativecommons.org/licenses/by-sa/4.0/legalcode

[11] Image by Jakub Hałun (https://commons.wikimedia.org/wiki/File:20090529_Great_Wall_8185.jpg), „20090529 Great Wall 8185,“ https://creativecommons.org/licenses/by-sa/3.0/legalcode