This column is to appear in the Augusta Business Chronicle (June 2000).  Taxing Anecdotes The story is told, and it might as well be true, that centuries ago the Duke of Tuscany levied a tax on salt. This caused local bakers to stop using salt in bread, giving us Tuscan Bread today – for a medium loaf use 1 1/8 cups water, 2 tablespoons olive oil, 1 tablespoon sugar, 3 cups bread flour, and 1 1/2 teaspoons active dry yeast. Use French bread and dark crust settings. Try it, you'll like it, writes my colleague, Prof. Robert Rycroft of Mary Washington College. That taxes should bring us something as good as Tuscan bread surely is a fluke. Consider some less tasty follies of taxation. Almost all of the old houses in Amsterdam are narrow and tall. According to a tour guide, property taxes were once based on the width of the home. So, to avoid taxes, citizens built upward. Amsterdam may look charming but those houses are hardly a comfortable place to live. And in South Carolina, doors were once taxed. So, to avoid taxes,  windows leading to porches were made large enough to enter and exit.  Staying with architectural examples, the invention of mansard roofs apparently can be traced back to a tax levied on homes' second floors. In response, people build mansard roofs because for tax purposes those were treated as attics and non-taxed. In the southern US, it was not uncommon to tax closets as rooms; therefore, many early houses lack closets. And back to the European continent: a large number of windows in the finer homes of England were boarded up when the windows were used to estimate property taxes.  Speaking of windows, a house with no windows looks unpleasant, and indeed, people who lived in these houses were more likely to get diseases and die due to the lack of light and ventilation. So why did anyone live in such houses, thousands of them, in many locations in western and central Europe? Because someone decided to impose a tax on windows! One can still find some window-tax houses standing today, silently testifying to the tax folly of some people. In antiquity, the Roman Senate levied a manumission (freedom) tax on owners who let their slaves go, ranging between 2 and 5 percent of each slave's value. Abolition of slavery became rather costly under those circumstances. And one Pasha Mehemet Ali decreed a tax on all date trees. With the tax, the trees were more worth dead than alive and were therefore sacrificed to the ax! Hoping to raise extra revenue, the city council of Washington, DC, once levied an extra tax on gasoline bought in the city. The result was that people filled up their gas tanks outside city boundaries and instead of generating more revenue, the city generated less. The US Congress, a few years ago, imposed a luxury tax on private yachts. The result was that rich people bought themselves other, non-taxed, toys, and the yacht-building industry collapsed. Poor Joe-Sixpack down by the boat dock became unemployed. (Congress eventually repealed this tax.) The lesson that economics and these examples teach us is that people react to prices. If there were a tax imposed on azaleas and dogwood trees, surely Augusta wouldn't be known as the Garden city. A tax is a price, although it is not always clear what it is a price of. It is a welcome trend that, increasingly, tax authorities employ so-called user fees and special-purpose taxation. A user fee is a tax that pays for the provision of a specific service, like water and sewage services. This is an improvement over general taxation because it permits people to see what they get for their money – and to complain if the price seems too high relative to what they get (Augusta's water situation being a good example of that). As a general rule, whenever possible, user fees should be levied in exchange for lower general purpose taxes. Dr. J. Brauer is Professor of Economics at Augusta State University's College of Business Administration. He can best be reached via his web site (http://www.aug.edu/~sbajmb).