Edwin R.A. Seligman and the Beginnings of the U.S. Income Tax

Abstract:     
In the late nineteenth and early twentieth centuries, a group of political economists led the conceptual campaign for a fundamental transformation in the American system of public finance. Responding to the social and political conditions of their times, these public finance economists helped build a new fiscal state - one that was concerned not only about raising revenue, but also about the equitable distribution of fiscal obligations. One of the chief visionaries or architects of this new fiscal order was the Columbia University professor, Edwin R.A. Seligman.

This article focuses on how Seligman and his like-minded colleagues were able to apply their social and political theories to the development of American tax laws and policies. More specifically, this article contends that academics like Seligman played a pivotal role in supplanting the "benefits theory" of taxation with a more equitable principle of taxation based on one's "faculty" or "ability to pay." Using Seligman as a prism for understanding the spirit of the times, this article explores Seligman's personal background, his ideas, and his influence on the development of American tax laws and policies.

Number of Pages in PDF File: 19

Keywords: Tax policy, U.S. history, history of economic thought, history of legal thought

JEL Classification: B15, K34, N41

Accepted Paper Series