Democracy, war, and wealth

Lessons from two centuries of inheritance taxation

Kenneth Scheve, David Stasavage

Research output: Contribution to journalReview article

Abstract

In this article we use an original data set to provide the first empirical analysis of the political economy of inherited wealth taxation that covers a significant number of countries and a long time frame (1816-2000). Our goal is to understand why, if inheritance taxes are often very old taxes, the implementation of inheritance tax rates significant enough to affect wealth inequality is a much more recent phenomenon. We hypothesize alternatively that significant taxation of inherited wealth depended on (1) the extension of the suffrage and (2) political conditions created by mass mobilization for war. Using a difference-in-differences framework for identification, we find little evidence for the suffrage hypothesis but very strong evidence for the mass mobilization hypothesis. Our study has implications for understanding the evolution of wealth inequality and the political conditions under which countries are likely to implement policies that significantly redistribute wealth and income.

Original languageEnglish (US)
Pages (from-to)81-102
Number of pages22
JournalAmerican Political Science Review
Volume106
Issue number1
DOIs
StatePublished - Feb 2012

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suffrage
taxation
mobilization
taxes
democracy
evidence
political economy
income
time

ASJC Scopus subject areas

  • Sociology and Political Science

Cite this

Democracy, war, and wealth : Lessons from two centuries of inheritance taxation. / Scheve, Kenneth; Stasavage, David.

In: American Political Science Review, Vol. 106, No. 1, 02.2012, p. 81-102.

Research output: Contribution to journalReview article

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