A New Take on Taxes
Interdisciplinary conference provides a new agenda for research

Winter, 2008, Volume 30, Number 1

IPR Faculty Fellow Leslie McCall, associate professor of sociology, chats with MIT’s Andrea Campbell before the session on sources of tax policy.

Of the two things that are certain in life, death and taxes, sociologists have rarely studied the latter. “Yet it touches nearly every issue which concerns sociologists—from the legitimacy of the state to the inequalities of race and gender,” said IPR Faculty Fellow Monica Prasad.

Turn-of-the-century economist Joseph Schumpeter observed that public finance is key to understanding many important things about comparative history, she continued, “and historical sociology has its role to play in this.”

Prasad, assistant professor of sociology, organized an interdisciplinary conference on the subject with Ajay Mehrotra of Indiana University’s School of Law in Bloomington and Isaac Martin of the University of California, San Diego. “The Thunder of History: Taxation in Comparative and Historical Perspective” took place from May 4 to 5 at Northwestern University. IPR was a co-sponsor.

Scholars in sociology, history, economics, law, and political science from around the country converged to discuss issues from the historical origins of the tax code to the social consequences of taxation, historical lessons, and fiscal sociology.

In the keynote address, sociologist Charles Tilly of Columbia University argued that France’s Louis XIV and Russia’s Vladimir Putin created—or are creating—long-term changes leading to democratization. They accomplished this in large part, he said, by strengthening and centralizing their respective “state capacity,” or the ability of a state to accumulate sustainable resources through taxation, labor power, and military might.

In continuing the examination of the fiscal-military model, other scholars challenged the model. Analysis by economist Joel Slemrod of the University of Michigan, Ann Arbor, found very small effects of warfare on taxpayer compliance, and historian W. Elliot Brownlee of the University of California, Santa Barbara, showed that military conquest failed to remake the Japanese tax structure after World War II.

Other scholars also investigated state formation through the lens of fiscal sociology, examining the welfare state, New Deal tax policy, social and political cleavages, and the sources and social consequences of tax policies.

Historian Robin Einhorn of the University of California, Berkeley, challenged the mainstream historical argument that it was Southern slaveholders such as Thomas Jefferson who pioneered American democracy. Instead, her research uncovers historical differences in taxation between the North and South showing that although the North was less democratic in its rhetoric, it was more democratic in its practices.

Andrea Campbell, a political scientist at the Massachusetts Institute of Technology (MIT), assembled public opinion data from 1947 to 2005 on American views on taxation. “People don’t like to pay taxes, but they often very much like what those
taxes buy,” she noted.

Northwestern law school professor Nancy Staudt explained how U.S. courts and legislatures defined post-WWII tax policy.

Christopher Howard, a political scientist at William and Mary, revealed that the (private) welfare state is financed by sizeable tax exemptions.

Joseph Thorndike of the University of Virginia surmised that the United States created a small (public) welfare state because it adopted “soak-the-rich” taxation early in the century instead of taxation to raise revenue that would help the poor.

Prasad explained how globalization has not forced a “race to the bottom” in welfare protection because European welfare states tax items that are not subject to global competition such as labor and consumption instead of items that are such as capital.

“The workshop showcased an exciting range of intellectual output and will hopefully lead to the creation of an extensive research agenda for this little-researched area,” Prasad said.

The presented papers will be published in a forthcoming volume, tentatively titled “The Thunder of History: Taxation in Comparative and Historical Perspective.”

For more information about the conference, please see: www.tgs.northwestern.edu/facultyandstaffinfo/facultyconferences/thunder.