Trusting Leviathan: The Politics of Taxation in Britain, 1799-1914 (review)

Martin Daunton has written both a comprehensive survey and a magisterial analysis of the evolution of the British fiscal state in the long nineteenth century. Offering a detailed exposition of changing tax regimes from the French Revolution to the First World War, Daunton's book is, more broadly, concerned with the creation of public trust in the British state. The emergence of widespread confidence that the state's fiscal demands upon the population were equitable and proportional, Daunton argues, distinguished Britain from other European polities and contributed decisively to the state's ability to survive the costly conflicts of World War I.

Daunton's chronological point of origin is the fiscal-military state that reached its apogee in Britain during the French Revolution and Napoleonic era. Compelled to create an efficient system of revenue collection in order to secure the loans that supported its vast military operations, the government radically increased its demands upon the tax structure. Total government expenditure, which had averaged eight to ten percent of gross national product throughout the eighteenth century, reached a peak of nearly twenty-five percent of national income in 1810. Increases in excise duties, which had made the principal contribution to the state's rising revenues throughout the eighteenth century, proved inadequate to the task of waging wars against the French military machine, forcing William Pitt to introduce an income tax in 1799. As the level of government expenditure rose to unprecedented heights, public confidence in the legitimacy of the state's demands weakened and antagonism to the taxes that fed Old Corruption grew ever more strident. The return of peace in 1815 and the ensuing lapse of the income tax failed to resolve these tensions, for servicing the national debt alone had come to absorb over half of all British tax revenue by the war's end. Relegitimizing the state's revenue system by rebuilding public consent to taxation, Daunton argues, was both the key challenge and the chief fiscal achievement of the Victorian era.

Trusting Leviathan is capacious in purview, enriched throughout by astute comparisons with financial developments in continental Europe and the United States. Thematic chapters explore the economic and philosophical theories that shaped politicians' approach to fiscal policy, anatomize the bureaucratic and administrative mechanisms that brought new revenues into the government's coffers, assess the impact of electoral reform upon the revenue system, and trace the gradual evolution of public trust in the tax-state as a legitimate agent of social and economic development. Initiated by Sir Robert Peel and brought to fruition by William Gladstone, measures that reduced the protection of the landed interest and the disproportionate taxes paid by the lesser and middling sort worked to create "a viable rhetoric of legitimacy and trust in the state" (61) in the early- and mid-Victorian decades.

Written with great lucidity, Daunton's book offers a particularly authoritative account of the emergence of the income tax as a permanent component of government finance in Britain. Reintroduced by Peel in 1842, the income tax initially threatened to exacerbate public antagonism to the revenue system, for it renewed fears that the state would be capable of pursuing extravagant military expansion. Criticized from the left by radicals and free traders and attacked from the right by Tory protectionists, the income tax remained a flash point for political debate until the mid-Victorian period. Gladstone's budget of 1853, in Daunton's analysis, marked an essential turning point in this protracted dispute, making opposition to differentiation both a central plank of fiscal policy and an essential tool for legitimating the income tax until the 1890s. By defending a flat-rate tax, Gladstone succeeded in establishing the principle "that the state should be integrative as well as minimal" (99), and thereby laid the foundations upon which Britain's fiscal structure would rest...