It is widely recognized that the 60,000-page U.S. tax code is an unwieldy mess. In January 2005, President George W. Bush appointed a bipartisan commission to make recommendations for tax reform and simplification. If this book is a guide, it is unlikely that any fundamental changes in the tax code will result, even though there are enormous federal budget deficits looming. According to W. Elliot Brownlee, such a change occurs only in response to a real crisis and as part of a broader transformation of government.

The first edition of Federal Taxation in America was published in 1996, along with a companion volume, Funding the Modern American State, 1941–1995: The Rise and Fall of Easy Finance, a series of essays edited by Brownlee that is still available from Cambridge University Press. In this second edition of Federal Taxation the story is brought up to the eve of the 2004 election. Brownlee's basic analysis and views have not changed in the interim. The introduction and conclusions have changed slightly to account for the shifts in contemporary tax policy and tax reform proposals, but the core of the argument remains that “tax regimes” shift only in response to a national crisis or emergency. According to Brownlee we are still operating under the tax regime, with its heavy reliance on the income tax, crafted in response to World War II. There have been reforms of the income tax, and setbacks to reform, but there has not been a crisis since the war serious enough to shake the system to its core. Crises in the past, including the original constitutional crisis, the Civil War, World War I, the great depression, and World War II, all resulted in creation of what Brownlee calls a fundamentally new tax regime with its “own characteristic tax base, rate structure, administrative apparatus, and social purpose” (p. 2). Thus, Brownlee sees five distinct tax regimes in American history, not all of which seem to me to be equally distinct. The historical arguments of the book are made in chapters that are only slightly altered from the first edition, with the contemporary material added. (See Mark H. Leff's review of the first edition in this Journal 58, no. 2 [1998]: 597–99.)

Brownlee takes what he calls a “democratic institutionalist” approach to the history of taxation. This means that he recognizes that democratic forces outside the institution of government itself helped to shape tax policy, especially the extent to which the tax system was explicitly redistributionist. On the other hand, basic government institutions—the President, Congress, courts, and the bureaucracy with its technical experts—clearly shaped and implemented tax policies. It is hard to argue with such an inclusive approach, although it lacks theoretical precision. This is basically a stages theory of the history of federal taxation, although there really is only one radical shift that I can detect, from the taxation of consumption, which lasted from the beginning of the nation until World War I, to income, which has lasted from World War I to the present. Although very important, economically meaningful changes in what articles of consumption have been taxed, exactly how expansively income has been defined, and how progressive income tax rates have been, these changes do not seem to me to be as fundamental as the issue of consumption versus income taxation, an important aspect of the contemporary discussion.

On the whole, this is a very useful book, although I think it has some flaws. I was quite disappointed that absolutely no data were presented. Some really good graphics, or thoughtful tables, would have helped place in context the relative importance of the various components of federal tax revenues over time. The rise and fall of the importance of excise taxes on alcohol and tobacco, for example, is a story demanding visual, quantitative illustration, especially in the period leading up to prohibition. Taxes are inherently quantitative and some basic measures should have been easy to provide. On the positive side, the descriptions of why particular taxes were proposed by people or presidents and then passed by Congress at different times are excellent, and especially helpful for crafting classroom lectures and discussions. I could easily see building an economic history seminar around this book, aided by the excellent historiography and bibliography at the end of the book. In terms of scholarship, as Brownlee shockingly notes, “much remains to be done” (p. 276).