The Paradoxes of State-Building: Transnational Expertise and the Income Tax Debates in the United States and Germany, c.1880‑1914

In 1906, the British author H. G. Wells observed that ‘first and chiefly, I have to convey what seems to me to be the most significant and pregnant thing of all… I think it is best indicated by saying that the typical American has “no sense of the state” ’.1 By contrast, the Germans had quite a different reputation at the time. In his 1887 study The Railroads, Charles Francis Adams, Jr stated: ‘The inclination of the German mind, especially the North German, is bureaucratic […] With us, in America, it is just the opposite […].’2 These contemporary assessments notwithstanding, the debates about the introduction of a federal income tax in the German Reich and the United States had strikingly similar features: in both countries, the introduction of the income tax was highly contested, and the perception that a federal income tax might lead to an all-powerful federal government defined the positions of critics in both countries. There is also a striking chronological parallel: both countries first introduced some kind of federal income tax in 1913. Both federal polities also faced the same dual challenge posed by the growth of expenditure for naval armaments and the growing demands for state intervention in order to create ‘welfare’ for all and solve the ‘social question’.