Taxation in the Early Progressive Era : From Revenue to Social Policy

This paper examines the views of three prominent Wisconsin progressives – Richard T. Ely, Tomas Sewall Adams, and John R. Commons – on taxes as social policy. Wisconsin emerged as a national progressive leader in the 1890s – a ‘laboratory of democracy’ that produced the nation’s first minimum wage, first unemployment insurance plan, the first civil service law, and the first state-level income tax. Yet, despite often bordering on the radical, Wisconsin economists were cautious about demands for income and wealth redistribution through the tax mechanism. Instead, they conceived of taxation as an instrument of social policy via three intersecting paths: (1) that the provision of government services could serve as a vehicle by which to achieve desirable socioeconomic outcomes, (2) that properly designed tax policy could improve morality, itself a worthy end, and (3) that inequality and distributional concerns be reconceived as issues of power rather than of wealth