Selling Scientific Taxation: The Treasury Department's Campaign for Tax Reform in the 1920s
M. Susan Murnane,
M. Susan Murnane
M. Susan Murnane is a Ph.D. candidate in American history at Case Western Reserve University, Cleveland, Ohio. She gratefully acknowledges the assistance of the College of Arts and Sciences Dissertation Seminar, which provided financial assistance and firm deadlines contributing to the completion of this paper. She is also grateful for the comments and kindly criticism from panel and audience at the American Society for Legal History annual meeting in November 2001, where this paper was read. She offers special thanks to the members of her dissertation committee, especially Erik Jensen and her chair, Ken Ledford, for their support and encouragement.
Search for more papers by this authorM. Susan Murnane,
M. Susan Murnane
M. Susan Murnane is a Ph.D. candidate in American history at Case Western Reserve University, Cleveland, Ohio. She gratefully acknowledges the assistance of the College of Arts and Sciences Dissertation Seminar, which provided financial assistance and firm deadlines contributing to the completion of this paper. She is also grateful for the comments and kindly criticism from panel and audience at the American Society for Legal History annual meeting in November 2001, where this paper was read. She offers special thanks to the members of her dissertation committee, especially Erik Jensen and her chair, Ken Ledford, for their support and encouragement.
Search for more papers by this authorAbstract
The received interpretation of the Mellon tax reforms in the 1920s describes a reactionary roll-back of the first, progressive, permanent income tax system in United States history. This essay revises that interpretation in important ways.
The Treasury Department of Secretary Andrew W. Mellon proposed and passed tax reform legislation in the 1920s that radically reduced marginal tax rates on wealthy individuals from World War 1 highs. The Mellon plan was developed by attorneys from the previous Democratic administration. Working with the foremost tax professionals of the day and deeply committed to the principles of progressive income taxation, they intended the establishment of a permanent peacetime tax system for a modern industrial society. They called their taxplan scientific taxation. The Treasury Department policymakers anticipated determined opposition to their program and consciously embarked on an extensive public relations campaign to convince the general public that reducing taxes on wealthy people was good for them because it made the whole society richer and more dynamic.
This essay tells the story of how the Mellon plan took shape, and of the public relations campaign waged to secure its enactment. This essay also suggests that the Treasury Department's campaign to sell scientific tax reform to the general public generated a dialogue that facilitated popular acceptance of modern industrial capitalism.
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