Did you pay the hat tax? It's Tax Day and your taxes are due. To liven up the spirit, we've decided to be optimistic and celebrate the fact our hats aren't taxed. You heard that right, as sometimes history is stranger than fiction. In 1784 the British dutifully taxed their citizens on every hat purchase. Bonkers, I know, but true.
The hat tax aimed to levy each person in accordance with their wealth. If you're rich, you're going to buy a lot of hats. If you're not rich, maybe you'll own one ratty hat, maybe none. The tax won't affect you - poor people rejoiced.
Today a tax on hats seems bizarre. But being such a commonly consumed good in historic England, it was part of the mainstream economy. Think of the gas tax we have today. No one even thinks about paying it, every time you fill-up. Want to go to work? Tax. Want to go anywhere on the weekend? Tax. The government is clever like that, and they get us coming and going, every time.
In Britain, retail stores offering hats for sale needed a license. The words “Dealer in Hats by Retail" was sanctioned as an authorized hat shop. Anyone else was illegal. Every man's hat sold needed to be stamped on the interior liner, stating the tax had been paid.
Like today, the tax varied depending on the price. For less expensive flat hats, a 6% tax was paid. More luxurious top hats the rate went as high as 14%. Anyone who failed to pay the tax was hit with heavy fines, which is expected. Anyone caught forging the stamps was sentenced to death.
We continue to absorb these taxes today, in different ways, without batting an eye. There are sales taxes on new car purchases. Though this varies by state, there are varying fees in regards to the license, registration, renewal, and the like. If you're wealthy, you're more likely to see higher fees with multiple cars and more expensive models. If you're broke, you're in luck, because you're taking the bus and don't have to pay any car taxes. Lucky you.
Whether it's a hat or a car, the government is keen on taking our funds, all while making it as painless as possible.
How do you celebrate tax day?
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