IDEAS home Printed from https://ideas.repec.org/a/bla/ecopol/v33y2021i2p315-342.html
   My bibliography  Save this article

War, inequality, and taxation

Author

Listed:
  • Dalton C. Dorr
  • Adrian J. Shin

Abstract

Existing studies highlight the importance of the compensatory demand among the conscripted poor to explain why wars lead to income and inheritance tax hikes for the rich. We propose a more nuanced argument that war mobilization leads to a class conflict in which the poor want the rich to pay more taxes in exchange for conscription while the rich seek lower taxes because they expect war‐related losses of their wealth. Mass warfare imposes higher tax burdens on the rich only when elites lack economic resources to prevent such policies. Using a panel analysis of up to 18 countries from the late nineteenth century to the 2010s as well as a subnational analysis of Senate roll call votes on tax bills introduced between 1913 and 2008, we corroborate our argument that elites' share of national income conditions how war mobilization shapes the trajectories of tax regimes.

Suggested Citation

  • Dalton C. Dorr & Adrian J. Shin, 2021. "War, inequality, and taxation," Economics and Politics, Wiley Blackwell, vol. 33(2), pages 315-342, July.
  • Handle: RePEc:bla:ecopol:v:33:y:2021:i:2:p:315-342
    DOI: 10.1111/ecpo.12168
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ecpo.12168
    Download Restriction: no

    File URL: https://libkey.io/10.1111/ecpo.12168?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Blumkin, Tomer & Ruffle, Bradley J. & Ganun, Yosef, 2012. "Are income and consumption taxes ever really equivalent? Evidence from a real-effort experiment with real goods," European Economic Review, Elsevier, vol. 56(6), pages 1200-1219.
    2. Roine, Jesper & Waldenström, Daniel, 2014. "Long-Run Trends in the Distribution of Income and Wealth," Working Paper Series 1021, Research Institute of Industrial Economics.
    3. Daron Acemoglu & James A. Robinson, 2008. "Persistence of Power, Elites, and Institutions," American Economic Review, American Economic Association, vol. 98(1), pages 267-293, March.
    4. Wright, Gavin, 1987. "The Economic Revolution in the American South," Journal of Economic Perspectives, American Economic Association, vol. 1(1), pages 161-178, Summer.
    5. Acemoglu,Daron & Robinson,James A., 2009. "Economic Origins of Dictatorship and Democracy," Cambridge Books, Cambridge University Press, number 9780521671422, June.
    6. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-1177, September.
    7. Collier, Paul & Hoeffler, Anke, 1998. "On Economic Causes of Civil War," Oxford Economic Papers, Oxford University Press, vol. 50(4), pages 563-573, October.
    8. Dincecco,Mark & Onorato,Massimiliano Gaetano, 2018. "From Warfare to Wealth," Cambridge Books, Cambridge University Press, number 9781107162358, June.
    9. Lupu, Noam & Pontusson, Jonas, 2011. "The Structure of Inequality and the Politics of Redistribution," American Political Science Review, Cambridge University Press, vol. 105(2), pages 316-336, May.
    10. Mark Dincecco & Mauricio Prado, 2012. "Warfare, fiscal capacity, and performance," Journal of Economic Growth, Springer, vol. 17(3), pages 171-203, September.
    11. Alesina, Alberto & La Ferrara, Eliana, 2002. "Who trusts others?," Journal of Public Economics, Elsevier, vol. 85(2), pages 207-234, August.
    12. Ohanian, Lee E, 1997. "The Macroeconomic Effects of War Finance in the United States: World War II and the Korean War," American Economic Review, American Economic Association, vol. 87(1), pages 23-40, March.
    13. Lukas Haffert, 2019. "War mobilization or war destruction? The unequal rise of progressive taxation revisited," The Review of International Organizations, Springer, vol. 14(1), pages 59-82, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2016. "Long-Term Persistence," Journal of the European Economic Association, European Economic Association, vol. 14(6), pages 1401-1436, December.
    2. Ernesto Dal Bó & Pedro Dal Bó & Jason Snyder, 2009. "Political Dynasties," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(1), pages 115-142.
    3. Agustín Goenaga & Oriol Sabaté & Jan Teorell, 2023. "The state does not live by warfare alone: War and revenue in the long nineteenth century," The Review of International Organizations, Springer, vol. 18(2), pages 393-418, April.
    4. Deckers Thomas & Falk Armin & Schildberg-Hörisch Hannah, 2016. "Nominal or Real? The Impact of Regional Price Levels on Satisfaction with Life," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 16(3), pages 1337-1358, September.
    5. Syed Mansoob Murshed & Muhammad Badiuzzaman & Mohammad Habibullah Pulok, 2017. "Fiscal capacity and social protection expenditure in developing nations," WIDER Working Paper Series wp-2017-60, World Institute for Development Economic Research (UNU-WIDER).
    6. repec:esx:essedp:751 is not listed on IDEAS
    7. Milan Zafirovski, 2022. "Some dilemmas of economic democracy: Indicators and empirical analysis," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(1), pages 252-302, February.
    8. Bautista, M. A. & González, F. & Martínez, L. R. & Muñoz, P. & Prem, M., 2020. "Chile’s Missing Students: Dictatorship, Higher Education and Social Mobility," Documentos de Trabajo 18163, Universidad del Rosario.
    9. Canepa, Alessandra, "undated". "Two Decades On: Assessing the Impact of the Copenhagen Criteria on Environmental Performance in the 2004 EU Accession Countries," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202501, University of Turin.
    10. Helios Herrera & César Martinelli, 2013. "Oligarchy, democracy, and state capacity," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(1), pages 165-186, January.
    11. Braunfels, Elias, 2016. "Further Unbundling Institutions," Discussion Paper Series in Economics 13/2016, Norwegian School of Economics, Department of Economics.
    12. Sarkar, Abhirup & Sinha, Abhinandan, 2022. "Clientelism and violence: The politics of informal economy," Economic Modelling, Elsevier, vol. 114(C).
    13. Lu, Kelin, 2022. "Overreaction to capital taxation in saving decisions," Journal of Economic Dynamics and Control, Elsevier, vol. 144(C).
    14. Daron Acemoglu & Davide Ticchi & Andrea Vindigni, 2011. "Emergence And Persistence Of Inefficient States," Journal of the European Economic Association, European Economic Association, vol. 9(2), pages 177-208, April.
    15. Daron Acemoglu & Nicolás Ajzenman & Cevat Giray Aksoy & Martin Fiszbein & Carlos Molina, 2025. "(Successful) Democracies Breed Their Own Support," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 92(2), pages 621-655.
    16. Matthias Weber & Arthur Schram, 2017. "The Non‐equivalence of Labour Market Taxes: A Real‐effort Experiment," Economic Journal, Royal Economic Society, vol. 127(604), pages 2187-2215, September.
    17. Dorsch, Michael & Maarek, Paul, 2012. "Inefficient predation, information, and contagious institutional change," MPRA Paper 38759, University Library of Munich, Germany.
    18. Bernardo Guimaraes & Kevin D. Sheedy, 2017. "Guarding the Guardians," Economic Journal, Royal Economic Society, vol. 127(606), pages 2441-2477, November.
    19. François Bourguignon & Thierry Verdier, 2010. "The Simple Analytics of Elite Behaviour Under Limited State Capacity," WIDER Working Paper Series wp-2010-104, World Institute for Development Economic Research (UNU-WIDER).
    20. Guido Tabellini, 2008. "The Scope of Cooperation: Values and Incentives," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(3), pages 905-950.
    21. Markus Brückner & Antonio Ciccone, 2011. "Rain and the Democratic Window of Opportunity," Econometrica, Econometric Society, vol. 79(3), pages 923-947, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:ecopol:v:33:y:2021:i:2:p:315-342. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0954-1985 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.