How old are taxes? Older than you think
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For thousands of years, human civilizations have been collecting taxes, in one form or another. From grain to beards to rubber balls, governments always found new ways to collect their due.
Every April in the United States, predictable signs of spring appear: budding flowers, chirping birds, and … taxes. They may be as certain as death, but taxes aren’t a recent phenomenon; they date back thousands of years.
Over the centuries, different governments all over the world have levied taxes on everything from urine to facial hair—and officials accepted payments of beers, beds, and even broomsticks. These payments went to fund government projects and services—from the pyramids of Giza to the legions of Rome.
FIRST TAXES
Taxation has existed for so long, it even predates coin money. Taxes could be applied to almost everything and might be paid with almost anything. In ancient Mesopotamia, this flexibility led to some rather bizarre ways to pay. For instance, the tax on burying a body in a grave was “seven kegs of beer, 420 loaves, two bushels of barley, a wool cloak, a goat, and a bed, presumably for the corpse,” according to Oklahoma State historian Tonia Sharlach. “Circa 2000-1800 B.C., there is a record of a guy who paid with 18,880 brooms and six logs,” Sharlach adds.
Creative accounting of in-kind payments helped some cheat the tax man as well. “In another case, a man claimed he had no possessions whatsoever except extremely heavy millstones. So he made the tax man carry them off as his tax payment.”
PHARAOHS' TAX PREPARATION
Ancient Egypt was one of the first civilizations to have an organized tax system. It was developed around 3000 B.C., soon after Lower Egypt and Upper Egypt were unified by Narmer, Egypt’s first pharaoh.
Egypt’s early rulers took a very personal interest in taxes. They would travel around the country with an entourage to assess their subjects’ possessions—oil, beer, ceramics, cattle, and crops—and then collect the taxes on them. The annual event became known as the Shemsu Hor, or Following of Horus. During the Old Kingdom, taxes raised enough revenue to build grand civic projects, like the pyramids at Giza.
Ancient Egypt’s taxation system evolved over its 3,000-year history, becoming more sophisticated with time. In the New Kingdom (1539-1075 B.C.), government officials figured out a way to tax people on what they had earned before they’d even earned it, thanks to an invention called the nilometer. This device was used to calculate the water level of the Nile during its annual flood. Taxes would be less if the water level was too low, foretelling a drought and dying crops. Healthy water levels meant a healthy harvest, which meant higher taxes.
TAX AMNESTY IN ANCIENT INDIA
In India's Mauryan Empire (ca 321-185 B.C.) an annual competition of ideas was held—with the winner receiving tax amnesty. “The government solicited ideas from citizens on how to solve government problems,” Sharlach explains. “If your solution was chosen and implemented, you received a tax exemption for the rest of your life.” The Greek traveler and writer Megasthenes (ca 350-290 B.C.) gave an astonished account of the practice in his book Indica.
Like most tax reform efforts, the system was far from perfect, Sharlach notes. “The problem is that nobody would have any incentive to ever solve more than one problem.”
RENDER URINE UNTO CAESAR
The Roman emperor Vespasian (r. A.D. 69-79) may not be a household name like Augustus or Marcus Aurelius, but he brought stability to the empire during a turbulent time—partly through an innovative tax on people’s pee.
Ammonia was a valuable commodity in ancient Rome. It could clean dirt and grease from clothing. Tanners used it to make leather. Farmers used it as fertilizer. And people even used it to whiten their teeth. All this ammonia was derived from human urine, much of it gathered from Rome’s public restrooms. And like all valuable products, the government figured out how to tax it.
Some wealthy Romans, including Vespasian’s own son Titus, objected to the urine tax. According to historian Suetonius (writing around A.D. 120), Titus told his father he found the tax revolting, to which Vespasian replied, “Pecunia non olet,” or “Money does not stink.”
ITEMIZATIONS FOR AZTECS
At its height in the 15th and 16th centuries, the Aztec Empire was wealthy and powerful, thanks to taxation. Historian Michael E. Smith has studied its tax collection system and found it to be remarkably complex, with different kinds of items collected at different levels of government.
All taxes made their way to the Aztec central governing body, the Triple Alliance. There they kept meticulous records of who had sent what. Many of these records survive today. The most famous are found in the Matrícula de Tributos, a colorful illustrated registry filled with pictographs showing exactly how many jaguar skins, precious stones, corn, cocoa, rubber balls, gold bars, honey, salt, and textiles the government collected each tax season.
RUSSIA’S FASHION TAX
Widespread use of coins and currency had a leveling effect on taxation systems, but rulers were not above applying some taxation muscle to achieve their ends. In 1698, Russian reformer Peter the Great sought to make Russia resemble “modern” nations in western Europe whose clean, close shaves Peter equated with modernization. After he returned to Russia, the tsar instituted a beard tax on his citizens, who favored beards.
Any Russian man who wished to grow a beard had to pay a tax—peasants paid a small fee while nobles and merchants could pay as much as a hundred rubles. Men who had paid the tax were also required to carry beard tokens wherever they went to prove that they'd paid their taxes for the privilege. Peter the Great’s beard tax did not last. Catherine the Great repealed it in 1772.
Source: National Geographic
By: Editors of National Geographic
When a “Good Year” Still Feels Tight You finally have a year where sales are up and the books show a profit—yet your bank account feels like it missed the memo. You’re working harder than ever, but cash seems to disappear the moment it hits your account. If that sounds familiar, you’re not doing anything wrong—you’re just bumping into one of the most common challenges in business: confusing profit with cash flow. Profit tells you how your business looks on paper.
Cash flow shows how your business feels in real life. And while both matter, only one pays the bills. The Real-World Disconnect Here’s where the confusion usually starts: You invoice a client for $20,000 in December. On your profit and loss statement, that sale boosts your year-end numbers. But if the client doesn’t pay until February, that profit doesn’t do much to help you cover January’s rent, payroll, or taxes. Or imagine a landscaping company that buys $15,000 of equipment in spring to prepare for summer jobs. On paper, the expense is spread out over time—but in reality, that cash leaves your account today. The result? You’re profitable on paper but short on cash in practice. Why This Happens to So Many Business Owners Cash flow issues aren’t a sign of failure—they’re often a natural part of growth. When your business scales, so do your expenses, payment cycles, and timing gaps between money in and money out. The biggest triggers include: Delayed payments: Clients pay on their schedule, not yours.
Seasonal swings: Slow months still have fixed costs.
Inventory or supply purchases: You pay upfront, earn later.
Tax surprises: Profit may be taxable long before the cash arrives.
Without planning for those timing gaps, even healthy businesses can feel like they’re running on empty. Turning Chaos Into Control This is where working with a trusted financial professional can make all the difference. They can help you: Forecast cash flow so you see slowdowns before they happen.
Smooth out seasonality by building cash reserves during strong months.
Review expenses strategically to make sure growth doesn’t outpace available cash.
Even simple steps—like syncing invoicing and bill-paying schedules or setting aside a percentage of each payment for future expenses—can dramatically reduce stress and improve stability. Bottom Line Profit is your scoreboard. Cash flow is your oxygen.
You need both to survive—and thrive. If your business feels profitable on paper but tight in the bank, you’re not alone. Contact our firm today for guidance on building a cash flow plan that keeps your business strong through every season.
Considering bringing on a partner? While there are certainly benefits you want to make sure you consider all aspects of such a relationship and look to the long term. Here are five of the best reasons (Pro’s) to organize a business as a partnership, explained in practical, plainEnglish terms: THE PRO’S 1. Shared Capital and Resources A partnership allows multiple owners to pool money, assets, and resources, making it easier to start or grow a business than going alone. Partners can contribute cash, equipment, property, or intellectual property Reduces the financial burden and risk on any one individual Often improves credibility with lenders and suppliers 2. Complementary Skills and Expertise Partners can bring different strengths and experience to the business. One partner may excel at operations, another at sales or finance Better decisionmaking through multiple perspectives Division of labor increases efficiency and focus This is especially valuable in professional services, startups, and small businesses. 3. Simple and Flexible Structure Partnerships are generally easy to form and operate compared to corporations. Fewer formalities and lower startup costs Minimal ongoing compliance requirements Partnership agreements can be customized to fit the owners’ needs Assets can be moved in and out of the partnership with little or no tax implications. This flexibility allows partners to define roles, profit sharing, and management however they choose. 4. Pass Through Taxation Most partnerships benefit from passthrough taxation, meaning: The partnership itself does not pay federal income tax Profits and losses pass directly on to the partners’ personal tax returns Avoids the “double taxation” faced by many corporations This can simplify tax reporting and, in some cases, reduce the overall tax burden. 5. Shared Risk and Responsibility Running a business involves uncertainty, and partnerships help spread risk. Financial losses are shared according to the partnership agreement Emotional and operational pressure is divided among partners Partners can support each other during difficult periods For many entrepreneurs, not having to shoulder everything alone is a major advantage. THE CON’S Here are five of the strongest reasons not (Con’s) to organize a business as a partnership, especially when compared with an LLC or corporation: 1. Unlimited Personal Liability In a general partnership, each partner is personally liable for the business’s debts and obligations. Personal assets (home, savings, investments) can be seized to satisfy business debts Each partner can be held liable for the actions of other partners One partner’s mistake or lawsuit can financially harm everyone Organizing as a Limited Liability Company (LLC) partnership would limit or may eliminate this personal liability. This is often cited as the single biggest drawback of partnerships. 2. Joint and Several Liability for Partner Actions Each partner acts as an agent of the partnership. One partner can legally bind the business without the others’ consent Poor decisions, negligence, or misconduct by one partner affect all partners Disputes with vendors or customers can expose every partner to risk Even highly trusted partners can unintentionally create legal exposure. 3. Potential for Conflict and Management Disputes Partnerships often fail due to internal disagreements, not business performance. Differences in work ethic, vision, or priorities can cause tension Decisionmaking authority may be unclear or contested Resolving disputes can be costly and disruptive Without a strong partnership agreement, disagreements can quickly escalate. 4. Limited Continuity and Stability Most partnerships lack perpetual existence. The partnership may automatically dissolve if a partner leaves, retires, becomes disabled, or dies Ownership transfers are often restricted or complicated Investors and lenders may view partnerships as less stable This can make longterm planning and growth more difficult. 5. Harder to Raise Capital and Attract Investors Partnerships are often less attractive to outside investors. No easily transferable ownership interests like corporate stock Investors may avoid exposure to partnership liability Growth options are more limited compared to LLCs or corporations As a result, partnerships can struggle to scale beyond a certain size. The Agreement A key factor in any successful partnership is its operating/partnership agreement. A good agreement will lay out specific information, purpose, requirements, expectations, responsibilities, how much capital is to be raised and by whom, allocations of profits, losses and distributions, duties and obligations of the partners to the partnership and each other, possible compensation, how new partners are let in and how partners are allowed to withdrawal. You must also consider possible issues that may happen and have a contingency plan to address such things as; how partnership interests are handled, dissolution of the partnership, dispute amongst partners resolution and other items must be addressed in the agreement should a problem arise. Such an agreement can be a very complex document due to all the things that should be addressed so consulting an attorney knowledgeable in partnership law is crucial. Each state has its own requirements thus the attorney needs to make sure the agreement will comply. Also, the IRS itself has things which it wants to see in the agreement. Before any operating/partnership agreement is signed, it should be reviewed by an attorney, each of the partners and a tax professional to see that it is in compliance with all rules and regulations and the partners, themselves, agreed to be bound by it. Before you make the final decision on whether a partnership structure is right for you and your business associates, sit down with a tax professional and an attorney to discuss each of these good and bad reasons. Looking for a financial partnership that thrives on building strong relationships with their clients? Call Steven Brewer today at 812-883-6938 to schedule an appointment. Accountability and results in growing your business.
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