In 2001, President George W. Bush signed the biggest tax-cut legislation in two decades. The law delivered the largest share of its benefits to the rich, with dramatic cuts in the top income tax rate and in inheritance taxes. Two years later, Bush and congressional Republicans cut the dividends and capital gains taxes, another boon to the wealthy. All told, taxpayers with incomes over $1 million received the equivalent of a 7.3 percent average annual raise, far more than any other income group. During the 2001 and 2003 debates, opponents criticized the tax bills as grossly unfair. House Democrat Rosa DeLauro predicted the 2001 legislation would “make it impossible to meet the needs of Social Security and Medicare or to invest in education . . . . The tax cut we consider today is totally skewed to the wealthiest at the expense of everyone else.”

After the cuts were enacted, political analysts offered many explanations for why legislation so “totally skewed” had nonetheless passed. Some—like my coauthor Paul Pierson and I (Perspectives on Politics [2005])—pointed to the ability of its proponents to craft rhetoric and policy to obscure just how much the cuts departed from the spending and tax priorities of the majority of Americans. Others, such as the political scientist Larry Bartels in his 2008 book Unequal Democracy, argued that the public did want the tax cuts but were systematically confused about the legislation's content and effects.

Kenneth Scheve and David Stasavage suggest a different answer: the tax cuts were following the path of least political resistance. Amassing an enormous amount of evidence from over a century of tax policies in twenty rich democracies, they argue in Taxing the Rich that only under special circumstances do democracies impose high taxes on the rich. Absent those circumstances, taxing the wealthy just doesn't have much momentum. The puzzle, they suggest, is not why a democratic government would grant such concentrated benefits to such a tiny fraction of the population. It is why tax rates on the rich got so high in the first place.

The one-word answer to that question, say Scheve and Stasavage, is war—or rather, a distinctive kind of war: “mass mobilization” war. World wars I and II involved the conscription of huge portions of the male population. They also involved huge increases in taxes on the rich. The connection, according to the authors, is that military sacrifices were not borne equally. The wealthy and owners of capital benefited from wartime demand, even though they were much less likely to put their lives on the line. During and after the two world wars, advocates for greater equality used these uneven sacrifices to justify taxing the rich at higher rates.

Scheve and Stasavage call this logic “compensatory,” contrasting it with the more familiar claim that rich people can afford to pay a higher share of their income to the state. Though now unfamiliar, compensatory arguments were made frequently by political leaders amid the first and second world wars. Through a clever comparison of democracies that did and did not fight in World War I, Scheve and Stasavage show that top tax rates shot upward in countries where mass mobilization occurred but not in those where it didn't. Moreover, using their historical and cross-country evidence, they cast doubt on other common explanations for high taxes on the rich, including the extension of suffrage and high or rising levels of inequality.

Scheve and Stasavage are hardly the first to identify war as the most powerful impetus for modern progressive taxation, but their analysis does more than any before it to establish just how big that impetus was. They also make clear the inadequacy of standard models used by economists and political scientists that imply that rising inequality or expanded voting power for the working class automatically produces more progressive taxation. And they break new ground in drawing attention to the persuasive power of compensatory arguments.

Still, Taxing the Rich is never entirely clear about who exactly is being persuaded. Scheve and Stasavage assume that progressive taxation is rooted in popular demands, but most of their focus is on the rhetoric of political elites, with surprisingly little attention to the ways in which elite and mass views are linked. The result is a strangely barren picture of the political landscape—a world in which there are governing elites and ordinary voters and not much else: not specific political organizations, not distinctive representative institutions, not even particular patterns of national policy. They say virtually nothing, for example, about the role of unions or other organized groups, such as business associations. Nor is there any sustained discussion of political power, except to dismiss the view that the disproportionate influence of economic elites could be an important source of post–World War II declines in top tax rates in rich democracies.

Perhaps this is why their discussion of recent trends is the least satisfying portion of the book. To Scheve and Stasavage, the decline of top tax rates is the inverse of their rise: “Ultimately, after mass mobilization wars ended, [compensatory] arguments faded from view. . . . In this environment it was inevitable that taxes on the rich would eventually come down” (p. 21). Tax codes have become less progressive, in other words, because—in the absence of compelling arguments to the contrary—that is what most people want.

Yet this conclusion is not only too facile about the link between opinion and policy; it also highlights the limits of focusing solely on the tax code, without consideration of its relationship to other policies. As Congresswoman DeLauro's argument suggests, fights about taxes are also fights about the spending those taxes finance. And while most countries have come to rely less on steep taxation of the rich and more on (less-progressive) sales or value-added taxes and payroll taxes, the spending that these revenues make possible is highly effective at reducing inequality. Apparently, compensatory arguments are not necessary to maintain and even expand social programs that deliver much greater benefits to the middle class and poor than to the affluent.

Which may help explain what happened after 2003: President Barack Obama let the Bush tax cuts for the richest Americans expire while creating a new health insurance program that delivered most of its benefits to those with modest incomes. In 2017, Donald Trump may turn the tide once again by repealing major parts of the health law and cutting taxes on the rich again. All of which is to say that the turn away from redistributive policy is hardly an automatic or inevitable process: Rich countries may never go back to the high tax rates of midcentury, but how to use the power of government to address rising inequality remains very much a live political issue.