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Forging Fiscal Reform: Constitutional Change, Public Policy, and the Creation of Administrative Capacity in Wisconsin, 1880–1920

Published online by Cambridge University Press:  27 April 2009

Ajay K. Mehrotra
Ajay K. Mehrotra
Affiliation:
Indiana University, Bloomington
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Extract

At the turn of the twentieth century, Wisconsin, like many northern industrial states, faced a profound fiscal challenge. As one concerned citizen succinctly explained, “The two great administrative problems before our people at this time are, first, the control of corporate wealth, and, second, the establishment of a rational system of taxation.” The large-scale structural pressures created by the rise of corporate capitalism and the decline of an obsolete tax system forced all levels of government to reexamine the substance and administration of their fiscal policies. At the state and local level, many governments addressed the mismatch between the increasing demand for state services and the declining supply of revenue by turning to new levies and innovative forms of administration.

Type
Articles
Information
Journal of Policy History , Volume 20 , Issue 1 , January 2008 , pp. 94 - 112
Copyright
Copyright © The Pennsylvania State University, University Park, PA. 2008

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References

Notes

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13. Estimates suggest that by 1902 property taxes accounted for 57 percent of all state government revenues, and roughly 73 percent of all local revenues. Wallis, “American government Finance,” 70.

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38. H. S. Wilson to Haugen, 24 July 1910, Box 56, Haugen Papers, SHSW.

39. Haugen to Wilson, 26 July 1910, Box 56, Haugen Papers, SHSW; “Income Tax in Place of Personal Property Tax,” Milwaukee Free Press, 26 May 1910.

40. Haugen to Wilson, 26 July 1910, SHSW; Haugen, Pioneer and Political Reminiscences, 158–59. On the transatlantic roots of American economic ideas during this period, see Rodgers, Daniel T., Atlantic Crossings: Social Politics in a Progressive Age (Cambridge, Mass., 1998), chap. 3Google Scholar.

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43. Brownlee, Progressivism and Economic Growth, chap. 3; Buenker, History of Wisconsin, 551–54; Stark, “Establishment of Wisconsin's Income Tax.”

44. Ibid. Adams to Haugen, 24 December 1910; Adams to Haugen, 1 April 1910, Box 56, Haugen Papers, SHSW; “Genesis of Wisconsin's Income Tax: An Interview with D. O. Kinsman,” Wisconsin Magazine of History, September 1937, 4.

45. Wisconsin Session Laws (1911), Section 1087m-8(1) and (2), Chapter 658; Kennan, , “The Wisconsin Income Tax,” Quarterly Journal of Economics (1911)Google Scholar; Seligman, The Income Tax, 421; Stamp, J. C., “The Tax Experiment in Wisconsin,” Economic Journal 23, no. 89 (03 1913): 142–146Google Scholar.

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47. Brownlee, Progressivism and Economic Growth, 49–50; Buenker, The History of Wisconsin, 554; Conant, James K., Wisconsin Politics and Government: America's Laboratory of Democracy (Lincoln, Neb., 2006), 298Google Scholar; Penniman, Clara, State Income Taxation (Baltimore, 1980), table I, 2–3Google Scholar;

48. State ex rel. Bolens v. Frear; Winding v. Frear. The Court consolidated these two cases as the Income Tax Cases, 148 Wis. 456 (1911). “Believes Income Tax Law Invalid,” Milwaukee Sentinel, 16 November 1911; “Income Tax Law Is Argued” Milwaukee Free Press, 21 November 1911.

49. Income Tax Cases, 504.

50. In signing the bill, Governor McGovern attached a lengthy memo that stated in part that “the plan of adjusting public burdens according to ability has been in successful operation for many years in Switzerland, Austria, France, England, Norway, Sweden, Denmark, Holland, and the German states.” “Governor Calls Income Tax Just,” Milwaukee Sentinel, 14 July 1911.

51. Income Tax Cases, 505.

52. Ibid., 511.

53. “Income Tax Law Valid, Says Court” Milwaukee Sentinel, 10 January 1912; “Hold's State's Taxation Plan Revolutionized,” Milwaukee Free Press, 10 January 1912.