The Crisis of the American Tax State
The United States is now a full-blown “tax state” where lawmakers can raise taxes with minimal effort without meaningful legal resistance.
In 1918, Austrian political scientist Joseph Schumpeter delivered a lecture titled “The Crisis of the Tax State.” He addressed whether the First World War would bring about a destructive fiscal crisis for European states.
Would the burdens of post-war debt and taxation threaten to destroy these states?
Many believed it would be difficult or impossible to fiscally recover from the enormous debts and tax liabilities incurred by states during the war. Schumpeter concluded that European states would easily survive whatever fiscal strains might be caused by the war, as they were well-developed “tax states” by the early twentieth century.
Author's summary: Tax states face fiscal crisis risks.