Tax farming is a system where the state, usually a ruler or oligarchy, grants the right to collect taxes to a private person or group of individuals. In theory, this agent collects the taxes and hands them to the state, keeping a percentage for his fee. The tax farmer is eager to make sure the taxes are collected so he does a really good job collecting those taxes. Since the tax farmers are usually closer to the people being taxed, they are going to be better at unearthing the various tax dodges cooked up by the people, thus avoiding the problem of tax avoidance.
This was common in the Bronze Age and flourished from time to time in various places into the late Middle Ages. The Italians still maintain a form of it in their banking system, where the small local banks operate as a taxing authority for certain transactions. The remains of this practice are still with us in the form of business and sales taxes. The retailer is basically a tax collector. The difference is the business collecting sales and employment tax is not getting a commission. They are forced to do it by the state as a condition of doing business.
Like all solutions, it came with trade-offs. The king may have lacked the communications systems and granular knowledge of the local economy to efficiently collect his own taxes, but he gave away some degree of his authority when he resorted to tax farming. He also gave away some portion of his tax revenue to the tax farmer. Since the power to tax is the power to rule, the king was also ceding some of his own power to others, who could one day use those powers against him. In other words, the king was trading power for money, which is always a risky trade-off.
Tax farming is something to keep in mind when reading stories like this one from Hollywood. Of the eight people in the story, three run cable empires. Two run empires that piggyback on the cable monopolies. That means five of the eight most powerful media men in America base their power on state-granted cable monopolies, that are really just updated forms of the old tax farm concept. Instead of the state taxing you through your cable and internet, they grant that right to these companies, who kick a portion of it back to the government in the form of bribes and taxes.
It’s tempting to resist this comparison because the cable company is not banging on your door, demanding that you give them half your crops. It does not feel like a tax, but income taxes don’t feel like a tax either. You never see them. They just happen behind the scenes. Most people are completely unaware of the taxes on their wages. They see what’s on their stub, maybe, but they don’t see the laundry list of taxes paid by their employer. Those of you who sign the front of paychecks know the stuff on the pay stub is just the tip of the iceberg.
Similarly, as a consumer of pop culture you want to watch TV and go on-line so you get cable. In most areas of the US, there is one cable company. They don’t just sell you the content you want, they sell you a package that you have to buy whether you watch it or not. You pay for ESPN, for example, even if you never watch sports. You pay for the parade of freaks on the news channels, even if you are a sensible person who gets his news on-line. That’s a tax, no matter what they call it. You are required to pay for these channels even though you don’t want them.
Here’s a little math. The average cable TV bill in America is now over $100 per month. There are roughly 100 million cable homes in America, which means $10 billion per month flows into the cable companies via subscriber fees. Then you have the internet access portion which is about half that number. When you have the right to tax $150 billion from the public, you have a very powerful tool at your disposal. It’s no wonder that five of the eight most powerful media moguls are in the cable rackets. They have been granted the power to tax.
This would be just another scam the Billionaire Boys Club is running on the American people, except that most people still get their news and culture through the television. All of those moguls are raging left wingers, who use their billions to finance their favorite politicians and pump into your home their ideas about how you should live. It’s not an accident that most of what turns up on television looks like it was dreamed up by the sophomores in the women’s studies department. The modern tax farmer does not just have the right to tax the people in his domain. He gets the right to tell them how to think.