The Rise of Modern Tax State in the 20th Century. An Introduction to Financial History - Detailseite

The course focuses on the rise and expansion of the modern tax state in Europe and in the US after 1914. By modern tax state, we mean a state whose revenue depends primarily on “modern” broad-based taxes such as personal income tax, corporate income tax, social security contributions, general sales tax or value added tax. The concept has also a quantitative dimension: until WWI, virtually no state was collecting revenue for more than 10 per cent of its national income, and some states (mostly in lower-income countries) still today oscillate around that level. In 2020 across OECD countries, instead, tax revenue averaged 33.5 per cent, with a peak above 45 per cent in the case of Denmark and France.  How can we explain such a sharp increase? Why some countries have moved towards higher levels of state intervention while others have not? What were the consequences of such a change with respect to the role the state plays within society (social spending, welfare, economic growth)?

To answer these questions, the course will start by analysing the main conceptual frameworks developed in the social sciences. Economists, sociologists, and political scientists have developed several models to explain the rise of modern states. In the first part of the course, we will go through these different models discussing their different methodologies (narrative analysis, descriptive statistics, econometrics). In the second part of the course, we will test these models by looking at historical evidence from a few representative case studies (US/UK, Continental Europe, Scandinavia) by relying on students’ presentations. By the end of the course, our goal will be to devise a historical interpretative framework based on the specificities of our case studies.

Brownlee, W. Elliot, Federal Taxation in America: A History, 3rd edn (Cambridge: Cambridge University Press, 2016)

Daunton, Martin, Trusting Leviathan: The politics of taxation in Britain, 1799-1914 (Cambridge: Cambridge University Press, 2001)

Martin, Isaac W., Ajay K. Mehrotra, and Monica Prasad, The New Fiscal Sociology: Taxation in Comparative and Historical Perspective (Cambridge: Cambridge University Press, 2009)

Mehrotra, Ajay K., Making the Modern American Fiscal State: Law, Politics, and the Rise of Progressive Taxation, 1877–1929 (Cambridge: Cambridge University Press, 2013)

Piketty, Thomas, Capital and ideology (Cambridge Massachusetts: Harvard University Press, 2020)

Scheve, Kenneth, and David Stasavage, Taxing the Rich: A History of Fiscal Fairness in the United States and Europe (Princeton: Princeton University Press, 2016)

Steinmo, Sven, Taxation and Democracy: Swedish, British, and American Approaches to Financing the Modern State (New Haven: Yale University Press, 1993)

Tilly, Charles, Coercion Capital and European States, AD 990-1990 (Cambridge, MA: Basil Blackwell, 1990)

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