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Woodrow Wilson Center Press
Federal Taxation in America: A Short History
Extending from the ratification of the Constitution to the present day. W. Elliott Brownlee describes the five principal stages of federal taxation in relation to the crises that led to their adoption--the formation of the republic, the Civil War, World War I, the Great Depression, and World War II. Now in a new edition, Brownlee expands his coverage to the present, with a new chapter focusing on the current tax policies of the Bush administration. This discussion is set within a larger analysis of contemporary tax and fiscal issues, including war finance, Social Security, and Medicare. First Edition Hb (1996): 0-521-56265-1 First Edition Pb (1996): 0-521-56586-3
304 pages, Paperback
First published March 30, 1983
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Displaying 1 - 3 of 3 reviews
June 20, 2011
A solid, professional history of how the federal government funded itself from 1789 to the George W. Bush years.
Somewhat surprising considering the subject matter and the contemporary state of the profession, the author is a real historian and not an economist or political scientist. He in fact takes some time in the historiography at the back of the book to lament historian's neglect of taxes as a subject of study. He renews the plea of the 1920s Austrian sociologist Rudolf Goldsheid for the study of government budgets as "the skeleton of the state stripped of all misleading ideologies." Or as economist Joseph Schumpeter, whom he also quotes, said, "the spirit of a people..is written in its fiscal history, stripped of all phrases. He who knows how to listen to its message here discerns the thunder of world history more clearly than anywhere else." Stirring stuff for a book on tariff rates and tax brackets, but Brownlee helps divine the meaning behind such esoterica, even if it is buried deep.
One is that "sin taxes" used to be a huge part of the federal budget. In the late 19th century anywhere from one-third to half of all federal expenditures came from taxes on alcohol and tobacco. The Spanish American War was funded just by doubling these taxes (and a temporary estate tax). This was on one level an attempt to limit the consumption of things that were considered immoral, but these taxes were also favored by the liquor industry, which thought they gave it legitimacy and assured that the prohibitionists couldn't outlaw it (it wasn't until the passage of the income tax that the 18th amendment was seriously debated).
Brownlee also shows that taxes were never simply a way to fund the government, they were also always a way to reorganize society. The tariffs passed in the wake of the Civil War (40 to 50% on the price of goods) were so high that they lost revenue over the old lower rates, but discouraged competition with domestic industries. During World War I, President Wilson and Secretary of the Treasury William McAdoo placed "excess profit" taxes on munition companies which funded up to 2/3s of the entire war, and they placed marginal rates on the rich up to 73% in a bid to equalize society.
I wish Brownlee spent more on the 18th and 19th century and less on the 20th (especially the last thirty years), since the content of recent tax debates is probably more familiar to most of his readers. Still, this is an important look at a crucial but understudied topic.
Somewhat surprising considering the subject matter and the contemporary state of the profession, the author is a real historian and not an economist or political scientist. He in fact takes some time in the historiography at the back of the book to lament historian's neglect of taxes as a subject of study. He renews the plea of the 1920s Austrian sociologist Rudolf Goldsheid for the study of government budgets as "the skeleton of the state stripped of all misleading ideologies." Or as economist Joseph Schumpeter, whom he also quotes, said, "the spirit of a people..is written in its fiscal history, stripped of all phrases. He who knows how to listen to its message here discerns the thunder of world history more clearly than anywhere else." Stirring stuff for a book on tariff rates and tax brackets, but Brownlee helps divine the meaning behind such esoterica, even if it is buried deep.
One is that "sin taxes" used to be a huge part of the federal budget. In the late 19th century anywhere from one-third to half of all federal expenditures came from taxes on alcohol and tobacco. The Spanish American War was funded just by doubling these taxes (and a temporary estate tax). This was on one level an attempt to limit the consumption of things that were considered immoral, but these taxes were also favored by the liquor industry, which thought they gave it legitimacy and assured that the prohibitionists couldn't outlaw it (it wasn't until the passage of the income tax that the 18th amendment was seriously debated).
Brownlee also shows that taxes were never simply a way to fund the government, they were also always a way to reorganize society. The tariffs passed in the wake of the Civil War (40 to 50% on the price of goods) were so high that they lost revenue over the old lower rates, but discouraged competition with domestic industries. During World War I, President Wilson and Secretary of the Treasury William McAdoo placed "excess profit" taxes on munition companies which funded up to 2/3s of the entire war, and they placed marginal rates on the rich up to 73% in a bid to equalize society.
I wish Brownlee spent more on the 18th and 19th century and less on the 20th (especially the last thirty years), since the content of recent tax debates is probably more familiar to most of his readers. Still, this is an important look at a crucial but understudied topic.
April 6, 2018
I was going to skip the dull-sounding "Historiography and Bibliography" chapter at the end, but luckily I didn't. It's interesting to see how different political and sociological schools have interpreted the same fiscal phenomenon. You'll also discover that one of the standard works on the income tax prior to WW I is in the public domain (The Income Tax by EDWIN R. A. SELIGMAN).
My main complaint about the book is that even when the author is simply recounting the ideological underpinning of some tax proposal, he should have at some point, even if only in a footnote, challenged the notion that consumption causes inflation.
My main complaint about the book is that even when the author is simply recounting the ideological underpinning of some tax proposal, he should have at some point, even if only in a footnote, challenged the notion that consumption causes inflation.
December 17, 2017
Fantastic overview of the history and politics of American federal tax policy. Told without advocate undertones or hidden agendas. Brownlee also simplifies the topic without sacrificing content. Great read for all.
Displaying 1 - 3 of 3 reviews