Tang Dynasty (618-907): Double Tax System

Sources

Financial Policy. Although the Tang court survived the An Lushan Rebellion (755)—a revolt led by a Mongol general who captured the capital and installed himself as the new emperor, but who was assassinated in 757—it was greatly weakened politically as well as economically. The government was divided into quarreling factions. The eunuchs rose in power and competed with the bureaucrats for the control of, and influence on, court politics. The rebellion also interrupted the regular collection of the land tax. The loss of revenue resulted in financial difficulties for the government, which had expanded during Xuangzong’s reign in both size and expenditures. To make up for this reduction in revenues, the court initiated a policy in 758 to enforce the traditional government monopoly on the sale of salt. A commissioner of salt and iron was appointed to oversee the implementation of this policy. Regional offices were established to make sure that only licensed producers could sell salt; they then resold the salt, now highly taxed, to the merchants. The higher cost was passed on to consumers. The policy worked well and provided a significant supplement to the land tax; a few years after the establishment of the monopoly, salt taxes provided more than 50 percent of the total cash revenue for the government.

Double Tax System. In 780, Dezong (Brilliant Ancestor) came to the throne. A vigorous ruler, who served until 805, Dezong was determined to reorganize the government in order to stop the decline of the dynasty. He installed capable men, who were loyal to him, as his chief ministers. Yang Yen, a well-known financial officer, was the most prominent individual among the men Dezong put into office. Under Yang Yen’s leadership the Tang government abandoned the “equal field” system and adopted the Hang shui fa (“Double Tax” system), which levied taxes twice a year on the amount of land held by the peasant households. To be specific, the Double Tax system replaced the old head tax and introduced a more equitable system, which was based on the assessment of land cultivated by the farming families. Meanwhile, the reform also curtailed the power of the eunuchs, who had controlled palace revenues. This policy assured that state revenues would be received by the government treasury. The Double Tax reform proved to be a success. The tax income collected in 780 alone surpassed the total revenue from all sources in the previous year.

Significance. This reform signified a far-reaching transition in imperial tax policy. Thereafter, agricultural taxation was assessed according to the amount of land one owned, rather than on the number of people in the house-hold. This change lifted government concern about the development of private holdings, as they no longer reduced revenues to the state. On the contrary, these individual properties now helped increase the tax income.

Sources

Woodbridge Bingham, The Founding of the T’ang Dynasty: The Fall ofSui and Rise of T’ang, a Preliminary Survey (Baltimore: Waverly, 1941).

John K. Fairbank and others, East Asia: Tradition and Transformation (Boston: Houghton Mifflin, 1973).

Herbert Franke and Denis Twitchett, eds., The Cambridge History of China, volume 6, Alien Regimes and Border States, 907-1368 (Cambridge 6c New York: Cambridge University Press, 1994).

Witold Rodzinski, A History of China, 2 volumes (Oxford & New York: Pergamon, 1979-1983).

Arthur F. Wright and Twitchett, eds., Perspectives on the Tang (New Haven: Yale University Press, 1973).