Modern tax structure, whether direct or indirect taxes, is the product of centuries of variations in taxes levied by governments. The most important objective of tax collection is to fill the government’s coffers but it also serves the purpose of redistribution of income and wealth. Common-sense suggests that a person with lower income will pay a lower tax while with higher income will pay a higher tax. Also, the government must treat people in the same income group equally. In economics terms, the former phenomenon is referred to as vertical equity while the latter is called horizontal equity. However, an English law which remained for more than a century deviated from these basic principles. King William III introduced a ‘window tax’ in 1696 after the burden of the French war. The tax was levied based on the number of windows in a house. While it had severe adverse effects on people’s health, the tax was revolutionary, as it changed the architecture in England and laid foundations for progressive taxation.
The Model
The window tax, incidentally, had an antecedent: the hearth tax. It comprised a levy of 2 shillings for every fire-hearth and stove in houses in England and Wales. It was introduced by Charles II in 1662. The chimney-men (or the assessors) had to count the hearths and stoves by entering into each house. Such a process made it unpopular and drove huge resentment. Contrastingly, the window tax made the tax collection easier as it had to only count the number of windows from the outside of the house without any intrusion. Window tax of 2 shillings was levied upon each house. Houses with between 10 and 20 windows had to pay 6 shillings while those with more than 20 windows had to pay 10 shillings. The Act underwent several rate revisions at various points in time. In 1797, Pitt’s Triple Assessment Act tripled the window tax rates to help pay for the Napoleonic Wars. There were some reductions in the window tax after 1820. However, a tax which was implemented for a temporary period in 1696, was finally repealed only in 1851.
An important feature of window tax was that the occupant and not the owner had to pay the tax. Controversial and regressive definition of ‘window’ made lives miserable. Even a trapdoor or a hole created after falling of brick was construed as a window. People began covering their windows and holes, restricting the flow of air and light inside. Homes got redesigned to lower the burden of taxes but increased the risk of adverse impacts on people’s health.
Tax Evasion
All industrial or retail buildings were exempted. Businesses such as dairies, pantries, etc. were also exempted from the tax. People who ran smaller businesses from their houses were, however, not exempted from the tax. Homeowners began building out-houses for work, workshops and warehouses, wholly separate and disjoined from the dwelling. They thought such a mechanism will help in exploiting an ambiguity in the law. Many people managed to show some business activity being carried out from their homes and outhouses. People hung labels or signs outside windows so that surveyors do not include them in their assessment. (In West Yorkshire, a few signs like ‘Dairy’ have been still retained by the people). They also disguised their houses by rearranging furniture or storing a few sacks of grain in a room and exempt themselves by bribing the officers. Tax evasion and corruption became rampant.
In 1747, the Parliament amended the Act that specifically declared such places as the same dwelling house. There was also a change in rate schedule: a tax of 6 pence on every window in a house with 10 to 14 windows, of 9 pence per window in houses with 15 to 19 windows, and of 1 shilling for every window in houses with more than 20 windows. Thus, ended the ambiguity and increased the tax burden.
9 Windows Dearer Than 10
Following such amendment in 1747, we can expect a greater number of houses with 9, rather than 10 windows due to such slabs or notches (mentioned above). The below figure presents a histogram showing the number of windows on X-Axis and per cent of houses on Y-Axis. Sharp jumps in the number of homes can be observed at all three notches (i.e. 9, 14 and 19). Even during the further tax revisions, similar spikes were observed at different notches prevailing at that time. Thus, such notches in tax rates distorted the behaviour of people largely, which can be observed even today, where our incomes are taxed at different rates for different income groups.
Architectural Transformation
By the late 19th century, various health issues due to inadequate ventilation and light became grave. ‘The Metropolitan Association for Improving the Dwellings of the Industrious Classes’ was amongst many institutes that came ahead to mitigate the effects of adverse living conditions. It brought on the well-respected architect Henry Roberts to improve the public housing systems through innovative ways. His first innovation was the use of a central staircase arrangement in larger tenements. He placed stairs centrally within the building and lit them by gas lamps. He was able to save at least one window on every floor. His other scheme was to use galleries in large tenements. The gallery separated each house and acted as an extended landing on each floor, which by law, was considered as a side street. People could access their apartments from the outdoors due to this. Family dwellings at Streatham Street are the example of the gallery model.
The rich too invited architects on board, but for other purposes. They desired gratuitous use of windows to distinguish themselves from other upper and upper-middle-class homeowners. Including as many windows as possible was there urge. Across England, many houses, especially in and around Lancashire were built with two to four storeys having tiers of windows on the outside. The English upper-crust was willing to take the monetary hit to assert their privileged status. The poor and the rich had different architectural demands. The former aiming at good hygiene with lesser windows while the latter demanding affluent designs to impress the world with more windows.
Repeal
In 1846, medical officers petitioned in Parliament for the abolition of the window tax, pronouncing it to be “most injurious to the health, welfare, property, and industry of the poor, and of the community at large”. A motion to repeal the tax failed by just three votes in 1850. A national campaign started pressurising the government and the Act was finally repealed in 1851. A more general house tax was introduced instead of a window tax later. Both, the rich and the poor started increasing the number and size of windows. Cult of sunshine, open air and an outdoor mood was set everywhere. French windows were installed that allowed people to step into garden or porch directly from their rooms.
These 150 years of tax tyranny saw volatility right from the behaviour and health of people to wear and tear and changes in designs of buildings across Britain. Both types of designs viz. gallery design for the poor and affluent fenestration for the rich, could be observed in various parts of England and Wales, even today. Window tax is a classic example of how public policy (irrespective of good or bad, regressive or progressive and socialist or capitalist) can change different dimensions of society.
More wisdom and strength to policymakers!
– Swapnil Karkare
Further Reading and References:
- Glantz, Andrew E. (2008) “A Tax on Light and Air: Impact of the Window Duty on Tax Administration and Architecture, 1696-1851,” Penn History Review: Vol. 15 : Iss. 2 , Article 3.
- Oates, Wallace E., and Robert M. Schwab. 2015. “The Window Tax: A Case Study in Excess Burden.” Journal of Economic Perspectives, 29 (1): 163-80.