Ideology and Redistribution: Left-Wing Governments and Tax Policy 1870-1945

• In Event: Historical Taxation and Representation: Actors and Institutions

Abstract

This paper is concerned with democracy and taxation in the late 19th and early 20th century. Traditional political economy models expect left-wing parties to rely less on taxes falling heavily on the poor – such as consumption taxes – and rely more on taxes falling heavily on the rich, such as income taxes. Surprisingly, left-wing governments often rely more on the former than on the latter, but there is no consensus on why. Using a novel dataset on government tax revenue covering 31 countries in Western Europe, both Americas, and Australasia between 1870 and 1945, I find that left-wing governments tax income heavier than consumption in majoritarian systems, while they tax consumption heavier than income in proportional representation systems. I argue that these patterns can be explained by the left being weaker in majoritarian systems and stronger in proportional systems.

Author

• Per Fredrik Andersson, Stockholm University