Lately I have taken to reading Theodor Mommsen's History of Rome under the Emperors, and I have to say I am absolutely enthralled. I love Roman History, but in particular I like to look at how complex governing systems worked. Rome was a very complex system from it's Republic to even under the Emperor, and continues to surprise me with every new look.
Lately I have been reading the history under Vespasian to Caraculla, which is the Second Semester in the book. Here Mommsen talks about the Imperial income, and how the government made money. Now I realize that I will be talking in generalities, so please forgive my lack of specifics. This was just an idea I had from a night reading over a couple of nights. I do not have exact numbers, and so I remain vague. If you would like to provide specifics, feel free to do so in the comments.
Now, current governments make money through taxation. For the American people, this means taxation at the Federal, State, and even municipal level through income taxes, excise taxes, property taxes, and sales tax. Income is then generated, and distributed for the good of those governed. That's the theory, at any rate. Whether or not it's to the benefit of those governed is a completely different discussion that I want to avoid for this post.
What's interesting in Antiquity is the method of income: It's not taxation, though taxes did exist, but rather through government monopolies and land usage fees (rents). The State controlled all mines, and the wares sold were 100% profit for the State. Lands were, once a region was made a Province, automatically owned by the State, and any that wished to "buy" it back could do so through annual payments, and even pay it off completely within a short amount of time. Those wishing only to use land for pasture, planting, etc, could then pay a usage fee based on the type of usage.
Because of these sources of income, the Roman State had roughly a 4% tax it levied on it's citizens, and even less on provincials. I found this almost incredulous, but yet it was enough to build massive roads and works all across the Empire, not the least of which were in Rome itself.
So why isn't this same method of State income still in use today? A lot has to do with the history between Rome and now. Let's look at property first. The Feudal period in Europe caused a huge backlash against the idea of a central government taking ownership of land. Partly because of small feudal families wanting to keep their lands, partly because of the concerns of religious land ownership, it all came down to the right to own property that is protected by the US constitution.
With State-run monopolies, they were generally discouraged (with a few exceptions) with various experiments in various other countries failing. That, and the fear of Communism becoming the new world economic model starting in the early 1900's.
Still, it's interesting to see how different Governments have chosen to make their capital, and what they choose to do with it.