The avoidance of taxes is the only intellectual pursuit that still carries any reward.
In 2011, officials in Karachi began employing transgendered people to collect tax. The thought was that in such a conservative Muslim society, tax avoiders would be embarrassed into paying up, hence the weapons used by the collectors: flamboyancy, surprise and more than a little lipstick. 'Their appearance causes great embarrassment amongst the people,' said Sajid Hussein Bhatti, a tax superintendent. When CNN followed the tax collectors to an electrical appliance shop, the owner refused to pay so the collectors threatened to come back 24 hours later, half a dozen strong - and dance in the shop.
This tactic is definitely necessary – only 1.9 million people in a country of 170 million filed tax returns at all in 2010. The Prime Minister of Pakistan through most of the 1990s (until he deposed by a military coup in 1999) was Nawaz Sharif. He had a personal fortune of £2 billion, but over a period of several years paid a total of just £7 in tax.
The use of embarrassment to collect tax is not new. In 2005 officials in Rajahmundry, a major city in Andhra Pradesh, India, said that they recouped 200,000 rupees ($4,600) on their first day of using tax inspectors armed with loud drums: 'Harried residents emerged from their homes to be told by accompanying tax collectors to pay up or continue facing the music.' In a much more restrained and British way, in 2010 the UK's HM Revenue and Customs gained the powers to name and shame tax dodgers.
From 1696-1851, taxes were levied on the basis of how many windows you had. As is well-known, this did lead to people blocking up their windows to reduce their tax liability. However, many of the 'blocked' windows which are pointed out today as examples of the tax were actually architectural features installed so as to create a symmetrical look, and were never intended to function as windows.
Window Tax was levied on houses with more than six windows. It was popular with the Revenue because it was easy to assess (they could see from the street how much tax was due). Campaigners against it characterised it as a tax on light and fresh air, and hence health. The more windows you had, the higher the rate you had to pay per window. In 1747, you'd be taxed sixpence per window for a house with 10-14 windows, ninepence for one with 14-20, and a shilling per window for a house with more than 20. The predecessor of the Window Tax was the Hearth or Chimney Tax, a levy on each fireplace.
By 1718, it was noted that the tax wasn't raising as much money as hoped because people were blocking up their windows, and new houses were being built with fewer windows. From 1810 to 1851 glass production remained at the same level despite the large increase in population and buildings, so it appears that a genuine problem was being caused by the tax amongst the poorer classes. Conversely, it is sometimes asserted that houses were gratuitously built with more windows than they needed, as an ostentatious display of wealth.
In Scotland the window tax didn’t exist until introduced by Pitt in 1784, so that blocked-out windows there became known as 'Pitt’s Pictures'. Some of the best-known examples of blind windows are in Charlotte Square in Edinburgh.
Tax policy also affected architecture in the Netherlands. 17th-century houses in Amsterdam are extremely tall and thin because property taxes were based on the width of their frontage.
In some countries, being a criminal doesn't exclude you from having to pay tax. Drug dealers, for instance, perform a trade, and so must pay tax on any money they make. The same is true of those who fence stolen goods. The US has even more explicit rules: ‘Income from illegal activities, such as money from dealing illegal drugs, must be included in your income on Form 1040, line 21’ Under ‘Kickbacks' it says: 'You must include kickbacks, side commissions, push money, or similar payments you receive in your income.’ And, for the diligent burglar: ‘If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner.’
Of course, if you have to pay tax on an illegal action, you can theoretically claim expenses against it. In 2005, a bank robber in the southern Dutch town of Chaam was able to subtract the cost of his gun from his fine. The judge accordingly reduced the fine from $8,750, the amount stolen from the bank, to $6,500. You can't pull off the same trick in Britain, unfortunately: according to British tax law a deduction can’t be claimed for payments that are criminal in themselves. For example, this would include a bribe made to secure a contract or made in response to a blackmail threat.
In 1973, John Paul Getty III was kidnapped. His father agreed to pay a ransom, although he would only pay $2.2 million because that was the maximum amount that was tax deductible.
The income tax has made liars out of more Americans than golf.
The US tax code is four times as long as the complete works of Shakespeare.
In 2005, Americans spent 6 billion hours filling in tax forms,
at an estimated cost of $265 billion.