Taxation is best understood as a form of payment for protection. Greco-Roman taxation developed and expanded with the rise of monarchies and empires. Formerly independent city-states were made to pay a tribute to their imperial masters. In return, imperial government guarded the peace and prevented rivals to make similar claims on their subject communities.
Initially, the world of the Classical city-states was one of low taxation. Per capita, tax demands were minimal and mostly met from indirect taxes. As long as the citizenry, dominated by landowners, could avoid direct taxation of their property or the produce of their lands, the main source of their income, they did, praying to the gods, as Dio Chrysostomus later remarked, that it would never come to the point “that each man would have to contribute in proportion out of his own wealth” (Dio Chrys. Or. 31.46, author’s translation). Much of the expenses for what ancient states did, public building, religious festivals, cult ceremonies, could normally be met from other sources, such as customs and harbour dues, natural resources, state-owned properties, or if need be, temporary contributions. In that respect the experience of the Classical city-state corresponds quite closely to that of other pre-industrial societies. The only factor that seriously could break the pattern of no or little direct taxation was warfare. Military activity generated by far the highest expenses regularly undertaken by premodern states. Historically it is the need to finance armies that has driven the expansion of taxation and the introduction of permanent land-taxes.