Does that sound like a bad idea?

Maybe it shouldn't.

Perhaps you should be the one spitting your breakfast across the table as you read this, not mild-mannered 19^th century readers 140 years ago this week.

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You might be worse off under the state's council rates system, which is based on a somewhat arcane idea, when you think about it.

After all, it was invented for 16th century Englishmen back when land equaled wealth.

These days, councils routinely patch the system to ease pressure on land rich and cash poor farmers, and bump up charges on city centre business with small shops and big incomes.

And the state government has its own fixes too, including an annual cap on rate rises that doesn't necessarily stop huge spikes in people's bills, even if it at least puts a limit on average rises across municipalities.

It all begs a question: why the hell didn't councils switch to something else a long time ago?

This story starts with a swanky banquet 140 years ago this week in Bendigo.

The drinks were flowing and the mood was jovial among 60 guests including some of the city's leading politicians and business leaders.

That's when Bendigo's ex mayor John Woodward was called up to say some words.

Woodward did not miss a chance to voice some thoughts on an issue he had noticed bubbling away.

"If local bodies possessed those powers [like taxation] they would be able to discharge their duties more efficiently and economically than they were at present," the Bendigo Advertiser paraphrased in an account of Woodward's speech the next day.

Victoria's councils often needed more money than they could raise on their own in the 1880s.

Bendigo's two major councils (Sandhurst and Eaglehawk) probably needed them more than some others in Victoria.

The population had surged and dropped dramatically in the decades to 1881, changing as news of gold discoveries inspired people to drop what they were doing and try to strike it rich.

And even when the population swelled many miners were not paying rates, La Trobe University honorary associate Charles Fahey said this week.

"The government didn't want to alienate any land that might possibly have been gold-bearing," he said.

Governments welcomed miners onto crown land with policies allowing them to live and work without paying councils rates. That had an effect across the housing industry, Dr Fahey said.

"What you find in places like Bendigo at the time is that valuations on most properties are very low because there was so much crown land," he said.

Woodward was not the only person talking about money.

The town had gone from sheep runs and bushland to Victoria's second city in a little under 30 years, Eaglehawk's then-mayor James Mouat told the gathering.

It might have been highly pleasing but had "made the drag on councils very heavy, as they had such great improvements and works to carry out".

Councils did their best, Mouat added.

He then raised his glass, proposed another toast and the mood lightened.

You could not be worried for long because things were great in Bendigo, as far as most 19^th century councillors were probably concerned.

Mines kept belching out gold, the agriculture sector and industry was developing and councils' finances were good enough.

Plus, everyone at the banquet was probably well off financially.

Even the councillors would have had to have a bit of coin in order to have the spare time to carry out their duties.

It was a fantastic time to be rich in Victoria, according to Dr Fahey.

"There was no income tax," he said.

Colonial government simply had not needed it.

They had leaned on taxes applied when land was sold in the rapidly growing colony, as well as charges on tea, coffee and other goods shipped in from around the world.

The good times did not last, in part because settlers were close to filling out land.

A depression hit in the 1890s and tax revenue from imports collapsed, Dr Fahey said.

"That's when they turned to income tax," he said.

Councils did not necessarily benefit directly from all that lovely new tax money that was flushing through the system, though the cash probably bolstered grants for big projects.

Like this story? Here are some more from our regular series WHAT HAPPENED?

But income tax did pave the way for Victoria's modern tax system, which councils do benefit from today.

Dr Fahey was unsure whether mayors who dreamed wistfully in 1881 about taxing your income would be happy with arrangements councils currently face.

It was such a different time, long before local governments were expected spend so much on social welfare measures. It was also a time before many working class people, women and others could expect a constant seat at council tables.

But at least 19th century councillors would know their work was still making things better today.

"It was the councils that saved Bendigo from being an absolute desert," Dr Fahey said. "It was the councils that went to so much effort to plant street trees, and built all the fabulous gardens like Rosalind Park.

"The civic amenity we have today is to a large extent due to people like those councillors."

This story is the latest in the Bendigo Weekly's regular local history series WHAT HAPPENED?