| This study asks: "To what degree does progressive philosophy and the reform activity of its economic theorists explain the adoption of a permanent income tax in America," and "what characteristics of the income taxation system reflect the progressive view?" It examines progressive philosophy, traces the intellectual and institutional origins of the "new economics," and uncovers the intellectual and instrumental influence of tax theorists, particularly Edwin Seligman and T. S. Adams. The university is shown as the incubator for the new economics, a relatively safe haven from which to broaden the field of inquiry to real-world problems and launch progressive reforms, including those related to public finance. The new social focus of progressive economic inquiry is demonstrated by theorists' concerns for equity in the distribution of tax burdens and arguments for an ability to pay doctrine of taxation. The study finds a correlation between progressive theories of taxation, state and municipal fiscal reforms, and the achievement of federal income taxation. Tax legislation that progressives helped draft locally and nationally reflected concerns for equity among groups of taxpayers and administrative efficiency, both considerations that are now institutionalized. Progressive economists helped legitimate and promulgate the idea of income taxation based on ability theory through an education effort that exploited new popular and scholarly publications. They also supported, on social economic grounds, legislative provisions for graduated rates, minimum exemptions, and personal and business deductions. But the legacy of progressive tax scholarship is shown to be broader. It delivered the modern understanding that methods of public finance have great impacts on the distribution of wealth in society and on consumption and production. Progressive initiatives that were pragmatic and conservative when compared to populist or socialist solutions succeeded in revolutionizing public finance. Taxation of the twentieth century has since displayed the irreversible shift in state responsibility for its economic policy and an explicit recognition of what Edwin Seligman called a "social fiscal science.". |
