In today's social climate of acknowledged and growing inequality, why are there not greater efforts to tax the rich? In this wide-ranging and provocative book, Kenneth Scheve and David Stasavage ask when and why countries tax their wealthiest citizens—and their answers may surprise you.
Taxing the Rich draws on unparalleled evidence from twenty countries over the last two centuries to provide the broadest and most in-depth history of progressive taxation available. Scheve and Stasavage explore the intellectual and political debates surrounding the taxation of the wealthy while also providing the most detailed examination to date of when taxes have been levied against the rich and when they haven't. Fairness in debates about taxing the rich has depended on different views of what it means to treat people as equals and whether taxing the rich advances or undermines this norm. Scheve and Stasavage argue that governments don't tax the rich just because inequality is high or rising—they do it when people believe that such taxes compensate for the state unfairly privileging the wealthy. Progressive taxation saw its heyday in the twentieth century, when compensatory arguments for taxing the rich focused on unequal sacrifice in mass warfare. Today, as technology gives rise to wars of more limited mobilization, such arguments are no longer persuasive.
Taxing the Rich shows how the future of tax reform will depend on whether political and economic conditions allow for new compensatory arguments to be made.
Kenneth Scheve is professor of political science and senior fellow at the Freeman Spogli Institute for International Studies at Stanford University. He is the coauthor of Globalization and the Perceptions of American Workers. David Stasavage is Julius Silver Professor in the Wilf Family Department of Politics at New York University. He is the author of States of Credit: Size, Power, and the Development of European Polities (Princeton).
"In its big picture argument the book is convincing: on both the correlation and nature of causality between wars that required the mass of working people to sacrifice not just their labour but also their lives; and on the imposition of higher tax rates on the rich in the 20th century."--Torsten Bell, Prospect
"A sweeping look at the history of levies on the wealthy."--Hugo Greenhalgh, Financial Times
"[Scheve and Stasavage] flesh out their big picture with a mass of compelling evidence. Overall, an outstanding book."--Bryan Caplan, EconLog
"What is surprising about this book is how robustly the authors discount other widely held explanations for the gradual reduction in tax paid by the richest 1% since 1980. The influence of political lobbying, liberalised capital flows and the breakdown of the postwar consensus are, in their view, inadequate answers. What has changed is the focus of ‘equality of sacrifice,’ which has returned to a debate about fairness."--Zac Tate, Capx
"Apart from anything else, the historical data on top tax rates is fascinating."--Diane Coyle, Enlightened Economist
"[A] fine and stimulating book."--Financial Post
"More than any other book I've read in the past few years, their arguments have prompted me to review what they wrote and look for other research that supports or counters their points."--David Cay Johnston, Tax Notes
"The authors make the force of the compensatory view clear. Judging by the apparent success of the rhetoric during the 2016 U.S. presidential primaries that speaks of a system rigged to favor the rich, the compensatory theory has not gone unnoticed by political strategists."--Michael Keen, Finance & Development Magazine
Table of Contents:
Figures and Tables xi
PART ONE –DEBATING TAXATION
1. Why Might Governments Tax the Rich? 3
2. Treating Citizens as Equals 24
PART TWO –WHEN HAVE GOVERNMENTS TAXED THE RICH?
3. The Income Tax over Two Centuries 53
4. Taxing Inheritance 93
5. Taxes on the Rich in Context 114
PART THREE –WHY HAVE GOVERNMENTS TAXED THE RICH?
6. The Conscription of Wealth 135
7. The Role of War Technology 170
8. Why Taxes on the Rich Declined 185
9. What Future for Taxing the Rich? 206
Another Princeton book authored or coauthored by David Stasavage:
Copublished with the Russell Sage Foundation