Rodríguez-Franco, Diana. “Internal Wars, Taxation, and State Building.” American Sociological Review (2016), Vol.81 (1): 190-213.
I found a fantastic case study of internal wars resulting in state-building in Colombia. The author claims that a patriotic desire and fear for their security because of the danger of FARC rebels make the elites willing to support higher taxes (wealth tax) on them by the state, so it can finance the military to fight FARC. President Alvaro Uribe’s (2002-2010) fight against the FARC apparently worked, as the security fears of the elites diminished. Some troubling aspects, however, deserve remarking on:
(1) the patriotic motives of elites were entirely self-reported and I doubt that many elites would be that patriotic if they could survive on their own private security.
(2) the abatement of non-state violence would reduce elite commitment to the state and would imply their desire to reduce taxation. In the Colombian case, rising tax obligations were associated with rising welfare expenditures, but state taxation has also increased on all levels, not just wealth taxes but also the broader income tax.
(3) What follows is also the premise that it requires elite willingness and permission for the state to raise wealth taxes, suggesting that it is hard to keep up wealth taxes if they oppose it. Austria’s post WW II settlement, for instance, retained the wealth tax until the 1990s, which coincided with a period of austerity and budget consolidation on social programs. The US estate tax is slated for abolition under billionaire president Trump and his billionaire cabinet, while Trump has also surrendered any pretense to maintain Social Security and other welfare programs post-election. Short of a new civil war, there won’t be any elite commitment to wealth taxes, and any mass mobilization tends to obscure the link between wealth taxes and welfare state spending. In the words of our commander-in-chief: Sad!!!