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It's Friday night and for some absurd reason, I'm going over 1099s and getting my taxes ready so I'm not rushing them to the accountant on the last day and I'm saying, "I bet Harry Potter doesn't pay taxes!"

Or does he? Then I got to think about how big the Ministry of Magic is and how many people are employed there. And the aren't going to be working there if they aren't making money.

So how does the Ministry of Magic raise their funding? Does the government in the magical world have taxes? Or is there some magical way they have of getting money for the government that doesn't create havoc in the economy?

  • 16
    From the Malfoys of course. – Dason Feb 4 '12 at 6:55
  • I don't have time to write an answer, but we know there are ministry regulations on domestic and international trade (f.e. cauldrons, flying carpets) patents and so on. It implies a functioning buerocracy which probably collects fees, taxes & fines from business. – user68762 Nov 21 '17 at 18:30
  • @Morrigan: "Probably." That's where the whole thing falls apart. That's an assumption that the Muggle world is the pattern for the magical world and that's not always the case. – Tango Nov 21 '17 at 20:00
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There is never any mention of how they come by the money. Neither in books nor in any JKR interviews. I searched for "money", "funding", "tax/taxes/taxed", "ministry" and "government". Zero relevant hits.

The ONLY exception is a note in OotP that Malfoy has great access and pull with the ministry since he funds a lot of causes:

'What private business have they got together, anyway?'
'Gold, I expect,' said Mr Weasley angrily. 'Malfoy's been giving generously to all sorts of things for years . . . gets him in with the right people . . . then he can ask favours . . . delay laws he doesn't want passed . . . oh, he's very well-connected, Lucius Malfoy.'

Somewhat ironically, once JKR got all billionairish herself, headlines such as this could be easily found:

LONDON (Reuters) - Harry Potter author J. K. Rowling has donated 1 million pounds ($1.83 million) to Britain's ruling Labor Party to provide a much-needed boost to Prime Minister Gordon Brown as he fights for political survival. (src: Reuters feed, 2008)

... and she spoke openly about wanting to prevent Tories from passing laws she doesn't like, and using her celebrity status to sway people to vote Labour.


WARNING: Controversial political analysis:

Based on JKR's non-HP political writing (especially her essay on why she will never vote Tory), she belongs to a political/philosophical school of "money grows on trees, not comes from other people who are taxed". This was especially true when she was writing her first books (and she planned out all 7 books then) and didn't have much money.

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So for her, the question of what it takes to make a normal economy function (and especially, how government funding is obtained) is utterly unimportant and un-interesting. She sees government (in the real world) as a benevolent entity helping people, NOT an entity which takes money from some people by force and gives that money (after siphoning off some for itself) to others. Not too surprising considering that her life idol (after whom her daughter is named) was an avowed Communist.

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It's curious to note that in Harry Potter world, everyone with much money is evil/dark (ranging from rich Death Eaters to experimenting-bad-jinxes-on-first-years morally ambiguous Weasley twins), with the lone exception of Harry himself - the latter having been explained by Rowling herself as a Mary Sue moment "I did it because I never had enough money". She basically seems to firmly believe a standard Soviet doctrine of "You can't make money with honest work" - Weasleys vs. Malfoys being the prime example of that attitude, in many places in the books.


To plagiarize my own separate answer - to misquote an apocryphal Tolkien-derived work "The last Ring-Bearer": "It is rather hard to analyze the reign of the first Princes of Ithilien, Faramir and Éowyn, in political or economical terms – it appears that they had neither politics nor economics over there, but only a never-ending romantic ballad".

In other words, Potterverse has no economic system we can coherently and logically deduce or find, because Rowling didn't put one in.

  • 3
    Excellent insight. Although Rowling is in fact known for paying her taxes locally rather than becoming an offshore resident. – JonathanReez Nov 21 '16 at 12:52
  • @JonathanReez - Considering that her main alternative (to move to) is France, she's better off where she is :) – DVK-on-Ahch-To Nov 21 '16 at 14:46
  • 1
    Her other choice is to become a 'non-domicile' resident: en.wikipedia.org/wiki/…. The more money you have the more tax you can avoid. – JonathanReez Nov 21 '16 at 14:50
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    @DVK-on-Ahch-To Never thought I'd be upvoting a HP answer based on politics. – TheAsh Nov 21 '17 at 15:48
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    It's curious to note that in Harry Potter world, everyone with much money is evil/dark - We dont have enough data to draw conclusions. Some of the old families are rich (malfoys, blacks) some are poor(weasleys, gaunts and presumably peverells) but the wizarding community supports upward mobility (inventors & merchants like fleamont potter, weasley twins, damocles do get rich and famous), there is no social net for orphans & the poor. Reminds me more of the capitalist system than anything else. It's a children's book thats the reason we dont have to suffer through taxation, banking and elect – user68762 Nov 21 '17 at 18:12
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Just because a system of taxes isn't mentioned it in the books doesn't mean one doesn't exist. There are two things which are certain in life, taxes and death (even for Voldemort).

There is some question as to whether or not Gringott's pays interest on accounts: Does Gringott's Wizarding Bank pay interest on deposits?. If they don't then Harry technically doesn't have income. He just has a large bank account which is he slowly depleting. If it does bear interest is it possible some trustee of his estate (such as Dumbledore) could have made arrangements to make sure that taxes were paid.

Given the basic lack of economy in the Harry Potter other than poor versus rich, it just isn't something that Rowling seems to care about mentioning in her books. Particularly since the original target audience was adolescents. They can understand poor and rich, but aren't going to care much about the economics of the magical community.

  • 2
    [citation needed] for Voldemort paying taxes :) – DVK-on-Ahch-To Nov 21 '17 at 15:52
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From taxes, presumably from Gringotts.

We know Gringotts mints the money:

"You see the numerals around the edge of the coins?" Hermione said, holding one up for examination at the end of their fourth meeting. The coin gleamed fat and yellow in the light from the torches. "On real Galleons that’s just a serial number referring to the goblin who cast the coin.

Order of the Phoenix Chapter 19: "The Lion and the Serpent"

And we know Galleons aren't universal throughout the wizarding world (Galleons are not hubcap sized.):

"You foreign?" said Mr. Roberts as Mr. Weasley returned with the correct notes. "Foreign?" repeated Mr. Weasley, puzzled.
"You're not the first one who's had trouble with money," said Mr. Roberts, scrutinizing Mr.
Weasley closely. "I had two try and pay me with great gold coins the size of hubcaps ten minutes ago."

Goblet of Fire Chapter 7: "Bagman and Crouch"

And its weird for a bank to produce its own currency without government involvement, so presumably the Ministry charges some sort of tax in exchange for backing the Gringotts currency.

  • 2
    You include sources about how the money is made, but from there you go off topic. (The issue about size, for example, is irrelevant.) You also don't provide any support that goes from how it's made to the assumption it's taxed. – Tango Nov 21 '17 at 17:46
  • I bring size information to show that the coins shown to Mr Roberts were not Galleons. The taxes is a logical jump. – TheAsh Nov 21 '17 at 20:53
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    No, there's no logical jump to taxes. What makes you think the magical world works just like the Muggle world? It's not a logical jump, it's an assumption with nothing to support it. – Tango Nov 21 '17 at 23:08
  • I think it's an interesting and plausible theory but I agree with @Tango that it does not seem to be solidly supported by canon (not contradicated by canon, either, for what it's worth). – DVK-on-Ahch-To Nov 21 '17 at 23:25
  • @DVK-on-Ahch-To makes a good point. If the point of the site were to generate discussion, that would be one thing, but the goal of SE is to generate authoritative answers, and without proof or support, this is nowhere near authoritative. – Tango Nov 23 '17 at 2:38

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