With support from the University of Richmond

History News Network

History News Network puts current events into historical perspective. Subscribe to our newsletter for new perspectives on the ways history continues to resonate in the present. Explore our archive of thousands of original op-eds and curated stories from around the web. Join us to learn more about the past, now.

The Lesson of Venice's 17th Century Plague? Tax the Rich

As part of his effort to brace the American economy convulsed by the coronavirus, President Biden has proposed $3.5 trillion in government spending over 10 years to expand public services. In addition, a $550 billion infrastructure bill seeks to repair and improve the country’s transportation and utility network. To pay for this endeavor, the administration put forward an increase in the top marginal individual income tax rate from 37 to 39.6 percent. And it proposed additional tax hikes for corporations and capital investments.

Skeptics of these tax hikes worry that the increased burden on high-income earners could reduce much-needed new investments in the economy from the cohort with the most dispensable resources. But historically, redistributive taxation has been an important component of a society’s recovery from a crisis. Shifting the tax burden from working people to the wealthy amplifies the impact of any government assistance extended during the public emergency and mobilizes more resources for reconstruction.

The experience of Venice after the 1630-31 bubonic plague, by contrast, is a cautionary case study of what happens when a society fails to follow this route.

Brought to Northern Italy in 1629 by invading armies from France and Spain, the plague severely impacted the merchant republic. According to census records, its population was around 140,000 in 1624. By 1633, that number had fallen to 102,000. More than 43,000 deaths were recorded over just three years, with nearly half of them taking place between September and December of 1630.

While the human toll was cataclysmic, the republic mitigated the full impact of the public health crisis. As it had done in earlier outbreaks of infectious diseases, the Venetian Senate responded to this latest plague by implementing lockdown measures. It also delegated public trustees to purchase food for those who were quarantined and to disburse money to the poorest members of society so they did not become vectors of contagion in their search for alms.

In addition, the government created public works programs to provide wages to people who had lost their jobs because of the health crisis. Most recognizabe to modern-day visitors to the city, the Baroque-style church of Santa Maria della Salute at the entrance of the Grand Canal was commissioned and paid for by public financing in 1630.

These policies helped minimize the displacement of tradespeople, helping the city retain skills and knowledge. Authorities also directed the minting and distribution of new coins to silk and wool traders so they would be able to pay their short-term bank loans. The Venetian Senate looked to preserve businesses in these highly valued industries through what it knew to be a transitory recession. And the city drew on emergency wealth taxes for the fiscal resources it immediately required.

But this relief was only temporary. When the crisis was over, the Venetian state decided to recoup the cost of the rescue by increasing taxes on the general public — the very people whose income-earning capacity and economic productivity it had sought to protect.

Read entire article at Made By History at the Washington Post