The Fiscal Origins of American Power: Federal Tax Policy and US Territorial Expansion in the Nineteenth Century

Abstract

In this working paper, I argue that United States (US) territory quadrupled within the first three generations since 1789 because, in the nineteenth century, the US developed a fiscal-military state capable of mobilizing considerable resources without provoking any major tax rebellion. Relying on indirect taxes—customs duties and excises—meant that the federal government could draw on a stable and uncontentious stream of revenue. This fiscal capacity allowed the US government to finance different methods of its territorial expansion, including warfare and purchase.

Keywords: US federal tax policy; indirect taxation; customs duties; excises; fiscalization; fiscal-military state; US territorial expansion; financial history.