The wisdom of tax reform rests on two simple principles: Lower rates, and broaden the base.
That way, almost everyone benefits from the reduced rates, while income from newly-closed loopholes helps pay for the ensuing revenue losses. In the United States, former New Jersey Senator Bill Bradley often gets credit for recognizing the relationship, but the Byzantine emperor Anastasius may have been the first world leader to put these twin principles into action.
“Anastasius was the ultimate insider,” historian Patrick Wyman tells me. Wyman, who hosts an insightful podcast about the fall of Rome, argues that Emperor Anastasius I’s 27-year reign was unique from his predecessors because the emperor possessed a rich understanding of the sweeping bureaucracy that powered the Eastern empire.
Before his accession in 491 A.D., Anastasius was a silentiary (a government official) in Constantinople. He was skilled in finance, and he had a passion for theology. Emperor Zeno’s wife, Ariadne, shrewdly chose Anastasius as Zeno’s successor, marrying the bureaucrat shortly after her husband’s death so as to lend him legitimacy. As emperor, Anastasius set out to cut taxes, minimize corruption, and reform the tax collection process. And in the end, the emperor’s reign would be remembered for the stability it provided in a time of turmoil.
To examine Anastasius’ reforms, it’s important first to note how Byzantine—yswidt?— the empire’s tax system was. “It was inefficient and irregular,” Wyman says, “combining taxes in kind (grain, oil, etc.) with cash payments in both gold and silver.” And the timing of tax collection varied widely, with some duties being taken up annually, others on a fixed schedule every few years, and still others being collected arbitrarily, at the whim of a given tax collector.
First, Anastasius focused on cutting waste and corruption. For instance, he pushed for accurate property value assessments (which landowners of the day often tried to block). And he reorganized tax collection with an eye for efficiency. For instance, in some areas of the empire, too much was collected “in kind” — in grain and other goods — meaning the perishable goods could go to waste before they could be of use to the army; whereas other areas closer to the troops (who would welcome taxes paid in food) were left hungry because too much was collected in gold or silver instead. “Anastasius reassessed all those needs and rationalized collections in each region,” says Wyman.
The emperor also appointed new officials to supervise the collection process, which was plagued by corruption, and reformed the empire’s monetary system by introducing new copper coinage.
One of the emperor’s most popular moves was abolishing the widely-scorned “chrysargyron,” a tax levied in gold every four years. Because the chrysargyron, also known as the collatio lustralis, was collected in cash, it caused problems for middle- and lower-class citizens who probably didn’t have easy access to hard coinage. The tax primarily affected merchants, fishermen, artisans, and, notably, prostitutes. The Church’s disdain for the duty may have contributed to Anastasius’s decision—in his Ecclesiastical History, the Syrian scholar Evagrius wrote that the “miserable tax” was “hateful to God and unworthy of even barbarians, let alone indeed of the most Christian Roman Empire”—but the positive effects of its demise were enjoyed by the entire economy.
The citizens of Edessa (in present-day Turkey), who previously had to pay 140 pounds of gold every four years in accordance with the chrysargyron, held a week-long festival and established an annual holiday to celebrate the removal of the tax.
“The whole city rejoiced, and they all put on white garments, both small and great, and carried lighted tapers and censers full of burning incense, and went forth with psalms and hymns, giving thanks to God and praising the emperor…” a contemporary historian observed.
But getting rid of the chrysargyron was a matter of contention among the Roman elites and bureaucrats who benefitted from it. Evagrius details how Anastasius had to trick his own officials to make sure the tax was truly dead: The emperor had the records pertaining to the chrysargyron burned; Fiona Nicks notes in her 1998 Oxford doctorate thesis that Anastasius played on popular opinion with the burning, conducting it in the hippodrome.
Afterward, Anastasius feigned a change of heart, telling staffers that he regretted burning the records and abolishing the tax in the first place. Evagrius writes, perhaps with embellishment, that Anastasius urged his officials to search high and low for any surviving copies of the records in order to reinstate the tax. The bureaucrats — being bureaucrats — were in complete agreement with the emperor’s “reversal”, and they enthusiastically brought him the only remaining documents. Which Anastasius promptly burned, too.
Author William Rosen writes in Justinian’s Flea that abolishing the tax, among others, constituted “almost certainly the first documented exercise of what would come to be called trickle-down economics.”
To make his accomplishments even more impressive, consider that while the most recent Republican tax cuts are estimated to add $1.5 trillion to the deficit (over a decade) Anastasius left the Roman treasury 320,000 pounds of gold richer than it was when he started.
“The upshot of all this was that the state brought in vastly more revenue without unduly burdening people lower down the social scale,” Wyman says. “On the whole, the Empire probably wasn’t paying any more in taxes than it had been, but it was much more efficiently assessed, collected, and distributed to where it needed to go.”
