INTERFACES

Margaret Lamb
UNIVERSITY OF WARWICK

QUESTIONS OF TAXATION FRAMED AS ACCOUNTING HISTORICAL RESEARCH: A SUGGESTED APPROACH

Abstract: This review essay suggests considerations to be addressed in research design if research on a taxation subject is to succeed as rigor-ous accounting research, well grounded in relevant historical scholar-ship. Tax research must focus on substantive subjects that are recogniz-able as “accounting”; the methods, approach, and exposition must be “historical” to an acceptable standard; and the research must engage with relevant portions of the existing body of accounting historical scholarship. Further, scholarly engagement with the best researchers and liveliest debates that the disciplines of accounting and history have to offer will enrich the treatment of tax in accounting history.

INTRODUCTION

Taxation is a rich research field for accounting historians to explore. There are many problems of tax measurement, reporting, and analysis that are central to the concerns of accounting historians who wish to understand the interrelationships between taxation and accounting institutions and practice. Taxation is, however, a field in which the wider context of public policy, law, and public administration presses insistently on the development of measurement and reporting principles and techniques, and their application and interpretation in practice. This review essay suggests considerations that must be addressed in
Acknowledgments: I am grateful to colleagues who have engaged in ongoing discussion of the nature of accounting research, and in particular taxation research done in an accounting context: Judith Freedman; Keith Hoskin, Simon James; Andrew Lymer; and the late Tony Steele. Responsibility for errors in or omissions from the paper remains, of course, with me. I acknowledge a Warwick Business School research grant that contributed support to this research.

research design if the resulting research on a taxation subject is to succeed as rigorous accounting research, well grounded in relevant historical scholarship. To use an analogy, this is an essay about where in general and how to aim the research “camera”; it does not suggest how to shoot the photo, develop, analyze, or present it to the discerning public.

I will argue that the accounting historian who wishes to tackle a taxation subject has two primary obligations when framing the particular research questions to be explored. First, the contribution to accounting history must be clear. Taxation is a broad and complex subject. It may be approached in many ways, from the political philosophy of its application to its economic and social effects. These are important frames of reference for examining tax issues, but as accounting historians we wish to know what is it about the research that extends our historical understanding of accounting theory, practices, or institutions? Second, the links to a more general, but relevant, history of taxation must be clear. How does the research draw from and/or contribute to a wider tax history? Tax research done in an accounting history context, just as much as accounting history more generally defined, represents a specialist angle of analysis within wider fields of historical scholarship. The accounting historian, just as much as any historian, has an obligation to engage with the rigorous and rich analysis of leading historians in the wider fields. This is an important part of tracing the gap in the historical literature that the specific research will fill or begin to address.

In this essay, I will consider how influential monographs of 19th and 20th century taxation history written by Anglo/American historians might assist accounting historians to frame relevant tax research questions. Three influential works of US economic, legal, and political history will be considered (Elliot Brownlee’s Federal Taxation in America [1996]; Robert Stanley’s Dimensions of Law in the Service of Order [1993]; and Julian E. Zelizer’s Taxing America [1998]). Two important works on British taxation history by the Cambridge economic and social historian Martin Daunton will be reviewed: Trusting Leviathan [2001] and Just Taxes [2002]. In each case, the essay will outline the major research questions and debates that these important works address in their general historical fields. Then, it will consider the ways in which accounting historians might use these works to assist in the exercise of framing their own research questions.

OBLIGATION 1: CONTRIBUTION TO ACCOUNTING HISTORY

A tax researcher writing in an accounting history context faces a high threshold to acceptance that a piece of work makes a contribution to accounting history. Success is associated with making the fundamentals of one’s working assumptions and approach to research clear. First, there is a need to make clear what the “accounting” is that the research explores. Next, there is an obligation to adopt an “historical” method of research and exposition. Finally, there is a requirement to ensure that “accounting” plus “history” contributes to “accounting history”. When a new piece of research extends or complements, as well as critically interacts with, the existing body of related accounting historical research, then we can say that the tripartite threshold of acceptance to accounting history has been met.

Accounting: As a generalization, we can say that accounting involves processes of calculating, reporting, and evaluating financial transactions, performance, and events. Accounting processes involve techniques, apply principles, and attract theories of improvement and explanation. Accounting research focuses on these processes, their outputs, and the institutions created around them. Yet, it is my experience that the seemingly simple question – “What is accounting?” – elicits two sequential responses. The first is a moment of hesitation and the second is a definition tailored to a particular context. The hesitation seems to me to reflect awareness of the many ways of defining accounting, contingent on context, and the process of personal choice. The range of definitions reflects the broad and changing nature of the field. It also emphasizes the ontological and episte-mological complexity that characterizes the accounting academic field.1
Accounting historians in general and those who write about taxation in particular make choices about how they define “accounting”. Sometimes those choices are implicit and taken for granted. I argue that the accounting historical scholarship will tend to be richer when the definition in a particular piece of
1 Much has been written on the ontological problem of accounting research [see Chua, 1986 for a start] and the epistemological issues [Oldroyd, 1999 in this journal represents a good place to begin]. Some of my own previous writing [Lamb, 1999; Lamb and Lymer, 1999] has presented an analysis of the challenges of diversity of possible approaches with reference to tax research in the accounting context.

work is explicit. Clarity of approach will support – through the researcher’s self-awareness and the reader’s sense-making pro-cesses – the critical interaction between new research and existing research.

History: In many ways, we approach the challenge of being historical in much the same way as we approach the challenge of researching accounting. We generally accept that history in-volves researching and writing about things of the past, so that is what we do. However, the concept and practice of “history” involves ontological and epistemological complexity too. To ignore this complexity altogether cannot be an acceptable approach to historical research. The researcher must make choices. If these are explicitly understood, the research can make constructive connections to appropriate advice and models for conducting historical research that already exist in the body of historical scholarship.2 If these are explicitly communicated, then once again the reader’s ability to absorb, position, and respond to the new work will be enhanced.

Accounting History: Given the ambiguities that exist around the definition and scope of accounting and the diversity of the historical discipline, it is not rocket science to deduce that the specialist field of accounting history will be characterized by a considerable degree of eclecticism. One comprehensive collection of accounting historical writings [Parker and Yamey, 1994] refers to “the great variety of accounting history literature” which encompasses “the ancient world; before double entry; double entry; corporate accounting; local government accounting; cost and management accounting; accounting theory; accounting in context” [p. 7]. This journal describes its scope as “address[ing] the development of accounting thought and practice” and “embrac[ing] all subject matter related to accounting history” [Statement of Policy]. Another specialist journal,

2 While there are numerous excellent pieces published in accounting historical journals on historical theories and methods [e.g. Carnegie and Napier, 1996; Miller and Napier, 1993; Oldroyd, 1999; Previts, 1984; Previts et al., 1990a, 1990b], I would encourage researchers to read works within the wider historical field. Debate over theory and methods will be more vigorous where many historical specialist fields interact, rather than in one specialist field itself. The work of Carr [1990] often serves as a starting place to address questions of historical approach in general, but more contemporary debates and concerns are addressed by Appleby et al. [1994], Evans [1997], Hunt [1989], and Jordanova [2000].

Accounting History, publishes work concerned with “exploring the advent and development of accounting bodies, conventions, ideas, practices and rules”.3 In the latter case, it is explicitly stated that authors should “attempt to identify the individuals and also the local, time-specific environmental factors which affected accounting, and should endeavour to assess accounting’s impact on organisational and social functioning”.

The obligation on the researcher who wishes to contribute to this eclectic specialist field is to make clear both the nature of the accounting that is explored, as well as the approach to historical scholarship adopted. It is in this way that links are made to the relevant parts of the existing body of literature and the nature of the research contribution can be critically and constructively understood.

Tax Research in Published Accounting History: Tax research studies have contributed to the body of published accounting history in a variety of ways. For example, several papers pub-lished in this journal have treated taxation as a distinct policy and practice area. Broden and Loeb [1983] adopted an historical approach to consider CPAs’ professional ethics in a tax practice context. Cataldo [1995] explained the historical development of the earned income tax credit. In the latter, general historical sources are used to contextualize and aid interpretation of the particular research study. Further papers seek to identify the antecedents of modern US taxation [Crum, 1982; Kozub, 1983; Samson, 1985; Wells and Flesher, 1999]. As well as constructing an historical account by reference to primary sources (often legislation and legislative records), some evidence is derived from political, economic, and general histories of 19th century America. The approach adopted is, in general, descriptive with little critical reflection on the existing body of historical literature. In the case of Wells and Flesher [1999], the research objective is to derive lessons relevant to modern tax policymakers.

Other tax research papers published in the Accounting Historians Journal emphasize the ways in which the policies and practices of taxation interact and overlap with those we readily

3 Its website commentary makes clear Accounting History’s willingness to accept diverse approaches. It cites “biography, prosopography, business history
through accounting records, institutional theory, public sector accounting history, comparative international accounting history and oral history”, as well as case study “based on an individual, a firm or a book”; see http://www.deakin.edu.au/fac buslaw/sch accfin /publications/abstracts.htm.

4 Referenced at footnote 3 supra.

recognize as accounting. Jose and Moore [1998] published a study of taxation in the Biblical Age in which clear aspects of accounting (counting, measurement, and computation) are considered. However, studies by Ezzamel [2002] of ancient Egyptian tax assessment and collection and Oldroyd [1995] of Roman governmental accounting are better examples of how historical work by specialist historians of the period may be used to critically ground the accounting historical study. Richard Macve’s [1994] essay on Roman and Greek accounting and taxation is another example of critical engagement with the work of a specialist historian of the period, in his case with the work of Geoffrey de Ste. Croix the eminent Oxford historian of the Classical Age. Kern’s [2000] study of interactions between US tax and accounting depreciation rules and conventions illuminates important features of 20th century accounting history, as does Edwards’ [1976] study for similar issues in 19th century Britain. My own research extends Edwards’ work [Lamb, 2002] and makes use of British economic and legal historical work to un-derpin an analysis of the accounting content of tax legal cases. Schultz and Johnson’s [1998] study of deferred taxation theory and practice is well integrated in US financial reporting history; research by Arnold and Webb [1989] covers some of the same ground for the UK.

Some tax historical research published elsewhere in an academic accounting context satisfies the threshold demands of accounting history with a more theoretical and critical engagement with existing literature. Work published in Accounting, Organizations and Society falls under this heading. Peter Miller’s study [1990] of interrelations between accounting and the state in 17th century France gives a high profile to taxation policies and practices. It is a highly theorized study that engages with both accounting theorizing and general historical research. Eden et al.’s [2001] research on the diffusion of the arm’s length principle for tax purposes in North America represents a more contemporary accounting history, well-positioned in an interdisciplinary theoretical literature. My own research [Lamb, 2001] on how control of accounting calculation (of expenses, income, and profit) was used to reinforce tax authorities’ powers to enforce taxpayer compliance extends prior accounting theoriza-tion and addresses a gap in the general historical literature. Tax research studies with an accounting historical approach in Critical Perspectives on Accounting also achieved a critical engagement with relevant accounting and historical literature. Boden’s [1999] research on the financial reporting expected from the self-employed explores the tax accounting impositions in a broad social and historical context. Boden et al.’s [1995] study of tax, women, and citizenship is similarly rich in its historical approach and critical engagement with existing literature.

OBLIGATION 2: MAPPING CONNECTIONS TO THE WIDER SCHOLARSHIP ON TAXATION

I have argued so far that the tax researcher wishing to publish in the accounting history domain has a tripartite threshold to achieve: the research must focus on substantive subjects that are recognizable as “accounting”; the methods, approach, and exposition must be “historical” to an acceptable standard; and the research must engage with relevant portions of the existing body of accounting historical scholarship. However, my argument does not stop there. If accounting history is to thrive as a specialist field of both accounting and history, its researchers must engage with the best researchers and liveliest debates that the broader disciplines have to offer. The majority of researchers who publish accounting history teach accounting in accounting departments and business schools. Many research contemporary, as well as historical, accounting subjects. Published authors of this journal also publish in mainstream accounting academic journals. All of these are reasons to suggest that accounting historians have reasonable access to and familiarity with seminal research and academic debates in the wider accounting field. Fewer reasons exist to support a presumption that accounting historians have similar institutionalized access to and familiarity with the work and debates that are the shared knowledge and current talk of university history departments. Keeping up with and engaging with history, therefore, takes even more conscious effort than does keeping up and engaging with accounting scholarship.

My second argument, then, follows: To be of the highest quality, tax research in accounting history must engage with leading scholarship in the related fields of history. The rest of this essay will consider some of that leading scholarship and address the question of how the researcher draws from and/or contribute to a wider tax history.

Taxation as a Central Focus of Historical Research: To a great extent, taxation has been a subject notable for its near absence in many fields of modern American and British history [e.g. Davie, 1997; Lowe, 2003]. Five relatively recently published monographs have done a great deal to redress this imbalance and demonstrate convincingly that taxation as a historical focus can serve as the analytical basis to unpick and then knit together more general histories of a period, a country, or a set of institutions.

Taxation in US Historical Research: The economic historian Elliot Brownlee’s Federal Taxation in America: A Short History [1996] is the current starting place for a consideration of US taxation. In this sense, it displaces earlier studies by Blakey and Blakey [1940], Paul [1954], Ratner [1942], Seligman [1914], Stein [1969], Taussig [1931], and Witte [1985]. The book considers the period 1789 to 1996. The author’s objective is to explain how and why the federal government has crafted new tax re-gimes in each of five great national emergencies: the Civil War, World War I, the Great Depression, the New Deal, and World War II. He argues that:

. . . [T]he introduction of new tax regimes has never stood alone. Every new regime has always been an integral part of a larger transformation of government that, in turn, was bound up in the resolution of a national emergency. As such, each of the new regimes had a reciprocal relationship with the larger transformation of government. On the one hand, the tax regimes enhanced trust in the larger transformation of government. . . . On the other hand, the new tax regimes received support and legitimacy as a consequence of the larger institutional transformation [p. 150].

Brownlee also reflects on the 1980s attempts at comprehensive tax reform. It is his assessment that the 1980s tax reforms did not amount to a break with the past as had been true of earlier changes. Further, he holds out little prospect at the time of his writing (during the 1996 presidential campaign) that advocates of radical reform of US federal taxation (e.g. the introduction of a national sales tax or a flat tax) would get very far. In the 1980s and the 1990s it was the absence of a great national emergency that was a significant element of his explanation in each case.5 One aspect of his extended argument is that during the earlier US national emergencies, there had been an increase

5 It is an interesting and topical question, perhaps, if the wars of the early 21st century (against terrorism, in Afghanistan, and in Iraq) will prove another “great national emergency” that engenders the necessary elements of a plan of radical tax reform, strong presidential leadership of that reform, and enough

in public trust and, thereby, an enhancement of the incumbent president’s ability to lead radical tax reform:

. .. [A]ll earlier, transforming episodes of fiscal reform have taken place in the context of public trust of the federal government and augmented that trust. . . . Until [public] trust returns and tax policy contributes to building that trust, special-interest politics will con-tinue to have great force in the shaping of taxation [pp. 150-151].

Brownlee’s book represents an excellent resource for historians of every stripe with an interest in the history of US federal taxation.6 Although short (190 pages), it distils a vast amount of the US historical scholarship that provides context and connection to, as well as episodes in, the long history of tax. It also documents well the detail of that bibliographic review in its copious footnotes.

Brownlee’s work is complemented by two other recent monographs on US tax history. The first is Robert Stanley’s Dimensions of Law in the Service of Order [1993]. It is described by Brownlee [1996: 26 fn] as “the most informative scholarship detailing the development of the income tax legislation between the Civil War and World War I”. Its central consideration is “whether the early history of federal income taxation might illuminate the developing structure of wealth and opportunity, and so our polity, as successfully as the law of race or gender, crime or labor” [p. vii]. Stanley demonstrates in his book that taxation does indeed provide such a powerful lens. His study proceeds chronologically. He starts with study of the first federal income tax laws (1861-1872). He argues that an understanding of the tax, even its first imposition, has to go beyond the circumstances of its birth as a “war tax”. The choice of an income tax, rather than something else, reflects that “the function of the nation’s first federal income tax laws was the deflation of class-tinged dissent from the centrist program, through the determined and skillful use of the powerful rhetorical and sym-

public trust in government to accept the changes. To date, it is possible to interpret President George W. Bush’s large federal tax cuts in one of two ways: business as usual in the special interest politics of US federal taxation, or the first play in a radical reduction in the level of federal taxation and thereby the size of the federal state.

6 One omission (noted by Davie [1997: 370]), however, is a complementary statistical history of US federal taxation. One would need to piece together this chronology from other sources, some of which are suggested by Davie.

bolic appeal of the law itself” [p. 17]. Then he considers the period that he refers to as “The Income Tax, Incorporated” (1873-1881). This was, he argues, a period in which the usefulness of the income tax to politicians and special interest groups on the right was developed in pragmatic and intellectual terms; in contrast, it was a time of relative neglect of income tax by elements on the left. Subsequent chapters of his book consider the ways in which the income tax came to be associated with a discourse of social and political reform (1881-1894); the attempts to implement income tax in the 1890s and the constitutional challenges that culminated in the Pollock decision (1894-1900); and the route to the eventual “restoration” of the income tax and agreement of the sixteenth amendment to the Constitution (1895-1913).

Stanley’s work is significant in large part because of the way in which he enriches his study with theory and broadens his approach by drawing on an interdisciplinary literature. He is also unusually explicit in describing the adjustment of his approach during the process of research:
I began my historical research by focusing on statutes and court decisions relating to income taxation, intending to look for factors which determined their form and timing. … I expected to find the traditional panoply of interest groups, party alignments, and ideologies, the tax fitting congenially within these categories that our society finds familiar.

Preliminary research led instead to a far murkier view. … I began to realize that my difficulty lay less in the data itself than in the attitude with which I was inter-preting the data. The pluralism of our traditional historiography and political theory was hindering, rather than helping my effort. . . . [T]he meaning of the early tax remained hidden from view . . . because of the spectacles I had learned to use. . . .

[T]he lenses which finally revealed the meaning of early income taxation – composed of assumptions about society, the state, law, and history which depart from the dominant progressive and pluralist view – generated [an] untraditional interpretation of the meaning of law in society … [p. viii].
The essence of Stanley’s argument is that the features and early introductions and withdrawals of federal income tax were directly related to the distribution and characteristics of wealth and opportunity of the age. When levied at low rates on a very small tax base, the early income tax strengthened the status quo and preserved existing imbalances of wealth and opportunity. In this sense, it was a bulwark against pressure for social and political change. Income taxation did not emerge from a grassroots movement, but from within the state itself. It was, he argues, more a product of “centrism”, meaning “political officials acting as relatively autonomous trustees on behalf of the most powerful segments of society through the use of multiple dimensions of law” [p. ix]. He concludes that income tax was supported by the state “because of its historically stabilizing rhetorical role” [p. 230]:

To the centrist lawmakers whose creation it was, in-come taxation represented not an expression of real economic democracy through a reduced burden on the poor and middle classes, but a rejection of the far more fundamental institutional change advocated by intellectuals and street dissidents of both left and right [pp. 230-231].

Stanley’s argument about the early US federal income tax challenges more conventional interpretations. In part, it is be-cause it draws its strength from and is located in a wider political, social, and legal history. It is for this reason especially that it deserves careful study by accounting historians.
The second complement to Brownlee’s short history of US federal taxation is political historian Julian Zelizer’s monograph Taxing America: Wilbur D. Mills, Congress, and the State, 1945-1975 [1998]. This work is concerned with the way in which a community of experts – legislators, tax policy analysts, tax professionals – influenced how the modern US state “increased in size and scope on an unprecedented scale in American life” [p. 3]. Zelizer’s research question is: “How did the American state achieve what it did between 1945 and 1975, despite the nation’s anti-statist culture and despite its fragmented political institutions?” [p. 6]. He uses a focus on Wilbur Mills, Democratic senator from Arkansas (1938-1976) and Chairman of the House Ways and Means Committee (1958-1974), to provide an historical narrative in which he answers his question.

There are four elements to Zelizer’s argument about the development of the post-World War II, US state. First, the way in which Congress wielded its taxing powers was an important part of the explanation of achievement. “Taxation was central to state-building” and Congress clung to its constitutional jurisdiction to tax, even in times of crisis [p. 7]. Thus, understanding the interplay between congressional history and the development of tax policy is crucial to a history of US state-building. In Mills, the powerful chairman of the congressional tax-writing committee, these threads of history come together. Second, the formation of community of tax experts, in which Mills and congressional leaders were prominent and authoritative, facilitated the tax policy and tax setting roles Congress wished to protect. The tax policy community “offered an arena where congressional leaders would interact with other members of the state on a regular basis”, thus helping to “facilitate policymaking despite the fragmented nature of the state” [p. 8]. It was in this context that a “culture of tax policy” emerged with “a distinct discourse with its own vocabulary and conceptions of the political economy, certain types of social interactions between members of government, and established ways of learning the political process” [p. 10]. Third, taxation policy was understood and used as much more than revenue raising. “Through taxation, Mills and the community were able to sell various economic and social programs [including Social Security and Medicare] within the national anti-statist culture” [pp. 11-12]. Further, in economic policy “Mills discerned that the manipulation of tax rates and the creation of tax breaks enabled the government to help manage the economy indirectly without infringing on the pre-rogatives of economic institutions” [p. 14]. Fourth, some fiscal conservatives – Mills among them – “entered into a fragile alli-ance” with the state and liberal state-builders [p. 16]. For their part, the fiscal conservatives imposed their views about “strict adherence to balanced budgets” [ibid.]. They shaped tax policy and the terms of fiscal discourse by expressing “ongoing concern about the detrimental effect of deficits on consumer prices, national savings, and the international stability of the dollar”; thus they “tended to define policy debates in terms of budgetary cost, tax burdens, and potential effect on the deficit” [p. 17].

Zelizer’s book helps explain the paradox of the growth of the liberal state in post-World War II USA at the same time as political institutions remain fragmented, the executive wing of US government becomes more powerful, anti-statist sentiment grows, and the tenets of fiscal conservatism are developed. This knitting together of political, legislative, and economic analysis is an important resource for accounting historians who wish to understand the context in which particular tax policy, legislation, and practices emerged. The prominence of discourse and technical policy communities in the story may well suggest to accounting historians some of the ways in which this general history might lead to the more particular histories of tax ac-counting, measuring, reporting, and analysis.

Taxation in British Historical Research: In a British historical context, the economic and social historian Martin Daunton’s two monographs – Trusting Leviathan: The Politics of Taxation in Britain, 1799-1914 [2001] and Just Taxes [2002] – have refashioned the history of British income tax. What Daunton has done that his predecessors have not is to use taxation as the focus for a critical study of the power, practices, and structures of the state and the economic and social forces with which it interacted. Earlier comprehensive histories of British income tax -notably Dowell [1965] and Sabine [1966] – adopted a comparatively uncritical approach to taxation as part of political history and the administrative history of the state. One of the earlier, most influential histories of taxation policy and practice – Kay and King [1990] – was written by economists and focused in detail on the post-World War II period. There is other research by historians that is detailed and rich in its treatment of taxation, but none extends the treatment to the 20th century: Braddick [1996] examines financing the state in the 17th century; Brewer [1989] looks at creation of the “fiscal-military state” in the 18th century; and O’Brien [1988] focuses on 19th century tax policy and fiscal economics. Daunton’s two books combine to form a unique study of British income tax over two centuries.
Trusting Leviathan is a study of taxation in the “long” 19th century, from Pitt’s introduction of income taxation in 1799 during the Napoleonic Wars to the outbreak of World War I. It is, in broad terms, a study of the creation of the Gladstonian fiscal state. Daunton refers to this as “a story of fiscal containment” because taxation was reduced from 20% of national income during the early 19th century wars with France to approximately 10% in 1914 [p. x]. In a first statement which hints at the rich comparative analysis7 that runs through the whole of the two

7 Any comparative history of taxation would need to consider Webber and Wildavsky’s [1986] comprehensive history of taxation and expenditure. This work focuses on the western world, but does not exclude excursions to the taxation history of parts of the rest of the world. A narrower, but influential, comparison is addressed in Steinmo [1996]. Picciotto’s [1992] legal history of business taxation is a fine comparative study of the US and UK, with attention paid as well to France and Germany. To the extent that a comparative history considers theories and influential ideas and models of taxation, Groves [1974] remains an excellent starting point.

books, Daunton notes that in Britain “the level of taxation was reduced and held down to a greater extent and for a longer period of time than in most other European countries” [ibid.]. The story that the author tells is also a history of trust in that during this same period “the fiscal system widely came to be seen as ‘fair’ and equitable between interests, so helping to cre-ate the high level of legitimacy which characterized the British state in the second half of the nineteenth century and into the twentieth century” [ibid.]. His research question is “what factors affected the changing willingness of taxpayers to trust each other and to trust the state, and for the state to trust taxpayers?” [p. 12].

Daunton argues that the answer to his question about trust can be articulated by reference to shifting balances between four distinct variables. The first is the institutional and administrative processes for revenue collection. His work (especially Chapter 7 “The minimum of irritation’: fiscal administration and civil society, 1842-1914”) offers a brilliant analysis of how seemingly technical administrative matters derived from the higher drama of matters of state “had much wider significance in exacerbating or mitigating social and political tensions” [p. 12]. It is here that he has much to say directly to accounting historians about matters of tax calculation, reporting, and collection.8 The second variable in Daunton’s analysis is the relationship between revenue and economic change. He refers to this as the way that “handles” were attached by the tax system to particular elements of the tax base:

Any tax system attaches a “handle” to different forms of income or types of economic activity, such as rent from agricultural land, profits from trade or the consumption of goods and services which provide some external indication of wealth. The way “handles” were attached to the tax base affected the buoyancy of revenue, and so influenced the ease with which government expenditure could be increased [p. 13].

8 In my research [Lamb, 2002] about how the administrative power of the 19th century Inland Revenue was enhanced through judicial support for calcula-tive principles and techniques devised by tax administrators, I have considered some of the ways in which Daunton’s work supports an analysis of taxation practice approached from another direction. I have also considered some of the ways in which his top-down perspective glosses over some aspects of practice that were significant for particular accounting and tax practice purposes.

Just as Brownlee [1996] argues, the nature of “handles” that were available or feasible was linked to levels and patterns of economic development. Daunton’s third variable is the manner in which new taxes were developed and fiscal reform under-taken [p. 15]. He contrasts a “usual ‘churning’ of taxes” with the “radical or ‘constitutional’ reform” of taxation that is “extremely rare” [p. 16]. A factor behind this feature of British tax politics was “the ability of permanent officials to shape the tax system by limiting the room for manoeuvre of politicians” [p. 17]. Daunton’s fourth major variable in his shifting pattern of the politics of taxation was the nature and manner of state spending:

Whether the tax system was considered to be equitable or inequitable depended on whether the various interests and groups providing the revenue felt that the state was spending ‘their’ money in a reasonable and appropriate way. … A high degree of trust in public or collective action therefore depended upon the creation of a widely shared belief that the tax system was balanced between interests, both in the way revenue was raised and how it was spent [pp. 18-19].
In Just Taxes the stories of fiscal containment and trust shift direction. We move from a story of an effective tax system in which “balance and fairness” operated to one in which they do not. From 1914, levels of taxation rose, reaching some 40% of national income in World War II. Daunton argues that both public trust in and the administrative competence of the state both took a nosedive in the same period. Among the factors explored to explain these changes is a substitution of “pragmatic equality” for “principled equality”. Long evident needs for fundamental reform of aspects of the tax system were ignored in the second half of the 20th century due to politicians’ lack of courage in risking short-term political reaction for longer-term economic and political gains. The result wa s a fiscal system that was no longer a stable base for the state. Instead, taxation became a focus of political and social tension.
Given that Daunton’s focus in his two monographs is the politics of taxation, much scope exists for other historians, in-cluding accounting historians, to build on his work to study other aspects of taxation. His is a top-down view and the roles and activities of taxpayers and practitioners remain to be con-sidered in detail.

Alternative Approaches and Interpretations: The four historians whose work has been introduced in the preceding sections to-gether represent a fresh approach to the study of taxation as central to a broader history and the range of considerations -political, social, economic, legal, and technical – that must be brought to bear in researching tax policy and practice. Part of their careful scholarship is to distinguish their work from that of previous and contemporary scholars of taxation. Brownlee’s [1996] study is especially useful to accounting historians for its appendix on historiography and bibliography. It analyzes and categorizes all the substantial and significant histories of US taxation then available. His analysis extends to the relatively small historical literature that is internationally comparative in focus.

Brownlee recognizes five approaches adopted by tax historians. The “progressives” present the long history of US federal income taxation as a triumph of social justice and democratic forces. Blakey and Blakey [1940], Paul [1954], Ratner [1942], Seligman [1914], and Taussig [1931] represent this approach. “That view regarded the reform movements that culminated in the New Deal as an expression of social democracy and as a stream of victories for working people – farmers and factory laborers” [p. 160]. There are three types of “post-progressive” historians according to Brownlee, all of whom focus on the prominent role of special interests and social power relations in explanations of how tax policy has developed. “Neocon-servatives” tell a story of “democracy . . . subverted by narrowly selfish tax-eaters” and “agents of the state who gain control of the instruments of national communication, manipulate federal power to discourage or suppress grassroots challenges to the state, and cultivate a class of experts capable of designing taxes whose effects are difficult to detect” [pp. 168-169]. “Capitalist-state theorists” see democratic institutions as “captured by capitalists or their agents” [p. 168] and regard tax policy to advance rationally the interests of capitalists. Brownlee places Stanley [1993] in this category.9 “Pluralists” emphasize how “the multiplicity of contending groups shap[es] tax policy, and … detail the ways in which the American political system encourages

9 Stanley, too, distinguishes his approach from the “progressives” and “plu-ralists” and offers a careful study of earlier studies. This involves review of underlying evidence and scrutiny of the assumptions and interpretations of earlier scholars. The resulting analysis is theoretically very rich.

fragmentation of the polity into local and special interests” [p. 165-166]. Witte [1985] is representative of this approach.

Brownlee’s own approach is characterized as “democratic-institutionalist”.11 By “democratic” he means that he “recognizes the power of democratic forces outside the federal government [and] stresses the potency of ideas as independent creative forces” [p. 173]. In that, there is some link to the older “progressive” tradition. However, he makes clear that the “institutional” element of his approach marks a clear distinction from the progressives: governmental institutions are regarded as having influence in and of themselves in shaping taxation policy; historical contingency [e.g. great national emergencies] plays an important role in enabling and sometimes forcing change; and economic development has shaped the organizational options available to tax policymakers [pp. 173-175]. Zelizer [1998]12 and, in the British context, Daunton [2001, 2002] adopt approaches that place emphasis on the social and institutional elements of an historical explanation for the development of taxation.

Daunton’s work represents another important source on approaches to historical scholarship. The first and final chapters in Trusting Leviathan [2001] add to an understanding of the different approaches to theory and methodology adopted by influential historians. It complements Brownlee’s work by a thorough discussion of the influence of social theorists (e.g. the Virginia School, Gramsci, Foucault) and approaches to history. Like other historians discussed above (especially Stanley and Zelizer), Daunton develops an historical analysis in which the

10 King’s [1993] fine study of US investment tax subsidies is another example. Webber and Wildavsky’s [1986] comparative history of taxation and expenditure in the Western World also adopts a pluralist approach. Political scientist Steinmo’s [1993] study of the role of the state in Swedish, British, and US
tax policy is regarded by Brownlee [1996, p. 172] as one of the most influential developments of the pluralist approach.

11 Brownlee’s [2003] approach to the history of taxation is developed by him and his collaborators in an edited collection of historical work, first published in 1996, focused on the funding of the US state during and after World War II.

12 A new book of which Zelizer is an editor and contributing author [Novak et al., 2003] considers taxation among other topics as part of “new directions” in
American political history. This focuses on “the relationship of citizens to the government in a context where suspicion of a powerful state has been the over
riding theme of American political culture” and “addresses the continually evolving mechanisms of democratic participation” [Jacobs and Zelizer, 2003, p. 1].
The methodological concerns of “the new institutionalism” and “sociocultural political history” are explored by contributors to the volume.

political discourse of taxation becomes an important element of the story of change and stasis in taxation.

CONCLUSIONS

I have argued that for research on a taxation subject to succeed as rigorous accounting research, well grounded in rel-evant historical scholarship, research design must consciously address several matters in framing the research problem. Tax research must focus on substantive subjects that are recogniz-able as “accounting”; the methods, approach, and exposition must be “historical” to an acceptable standard; and the research must engage with relevant portions of the existing body of accounting historical scholarship. I have argued, further, that the treatment of tax in accounting history will be more influential inside and outside the specialist field of accounting history if there is scholarly engagement with the best researchers and liveliest debates that the disciplines of accounting and history have to offer will enrich.

This essay has drawn researchers’ attention to some works of historical scholarship in which taxation is the central focus and that is recognized by historians as being of the highest quality that their discipline produces. Accounting historians of taxation can use the insights of historians such as Brownlee, Stanley, Zelizer, and Daunton to frame their own concerns with the policies, problems, and institutions of tax measurement, reporting, and analysis. There is much for us to research from an accounting perspective that can help us tell historians, tax policymakers, and practitioners of tax and accounting about how taxation policy is implemented and works in practice; about the behavioral effects that stem from interactions between tax, accounting, and economic activity; and about how taxation can be understood not just at the levels of discourse, politics, or law, but in financial measures and the decisions of economic actors. What is important is for accounting historians to develop effective routines for staying abreast of how other historians are thinking about the historical problems, including taxation, in which we all have a common interest.13 Then, those accounting

13 It always helps to have practical means for doing quick surveys and keeping up to date. Among the means that I would suggest for taxation research follow. (1) Make regular reference to the US Tax History project supported by Tax Analysts; see http://www.taxhistory.org/default.htm. (2) Seek guides to tax history research prepared by law school libraries. The University of Connecticut Law Library has produced one such summary recently; see http://www.law.

historians will be in a position to supplement this historical work and engage with it amidst the rich narratives, arguments, and evidence that make up scholarship.

This review essay has sought to suggest how questions of taxation might be effectively framed as accounting historical research. To return to the analogy with which I started this piece, my hope is that this essay may encourage tax researchers to think anew about the technical specifications for the research “camera” that they should seek to apply as well as about how and where to aim the camera. It is now up to those individual researchers to choose their subject, shoot the photos, develop them, mount them, interpret them, and present them to an interested accounting history audience.

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