How Employers and Conservatives Shaped the Modern Tax State

  • Alexander Hertel-Fernandez
  • Cathie Jo Martin
Part of the Palgrave Studies in the History of Finance book series (PSHF)


Coordinated nations with large welfare states rely on comparatively regressive “mass tax” systems, whereas liberal countries with limited welfare states historically embraced more progressive “class tax” systems. This chapter explores the origins of these paradoxical strategies. It suggests that “mass” and “class” tax strategies come from different models of revenue policymaking, organized around the logic of state-building versus crisis mobilization. A state-building model, which produces the mass tax, transpires in countries with strong political institutions for consensual policymaking, and includes support by business and the right, whereas a crisis-mobilization model, which produces the class tax, occurs in countries with few institutions for consensual policymaking. This argument is supported with quantitative data from 1900 to 2000 and case studies of the United States and Denmark.


State-building model Crisis-mobilization model Multipartism Two-party system American revenue system Danish revenue system 


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Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Alexander Hertel-Fernandez
    • 1
  • Cathie Jo Martin
    • 2
  1. 1.Columbia UniversityNew YorkUSA
  2. 2.Boston UniversityBostonUSA

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