|Anthony Freda Illustration|
Sheila Rice, who sold her Maryland home to avoid foreclosure, was surprised to learn JPMorgan Chase was her property tax collector. But the bank can’t claim to be the first private company to play the role of tax man: It’s taken part in a more than 2,000-year-old tradition that, from its very start, has been tainted by abuse.
As the Huffington Post Investigative Fund reported this week, big banks and hedge funds in the U.S. have been quietly collecting taxes on hundreds of thousands of homes. The process, called “tax farming,” is simple: A company goes to a local government and reimburses it for taxes that citizens aren’t paying. In return, the company gets to act like an old-fashioned tax thug — the kind rabbis condemn in the Bible — charging up to 18 percent interest and thousands of dollars in legal fees, simply because it can. As the District of Columbia attorney general told the HuffPost Investigative Fund, there’s “no oversight at all.”
Like many great American traditions, the tax farming game was perfected by the ancient Romans. Provincial governors, and later Rome itself, sold tax-collection rights to private companies called publicani. As in modern America, this was a speculative bet — a company paid a local government’s tax debt, and then tried its own hand at recouping the loss. The Roman version was plainly brutal. In ours, the brutality is subtle. But in the estimation of one expert in ancient finance, it’s just as bad: In our own way, we’re sliding toward the conditions of ancient Rome, where private tax collectors employed soldiers to wring excessive amounts of cash from debtors.