Current Editors bio photo

Current Editors

Cristina Bodea
Andrew Kerner
Shahryar Minhas
Ha Eun Choi

The Tax Introduction Database

Philipp Genschel and Laura Seelkopf

Dataset Link

Paper Link

What?

The Tax Introduction Dataset (TID) lists the year of the first permanent introduction at the national level of six major taxes of the modern state: the inheritance tax (INH), personal and corporate income taxes (PIT and CIT), social security contributions (SSC), general sales and value added tax (GST and VAT). It covers 220 countries, past and present, from 1750 until today (Seelkopf et al. 2021, Genschel and Seelkopf 2019). The dataset offers additional information on the mode of introduction, tax rates, subnational taxation as well as historical background. Data, codebook and first publications can be found here.

Why?

TID addresses three common biases in fiscal sociology and the political economy of taxation. First, Western-centrism: the historical literature often focuses on fiscal developments in a small sample of Western democracies. TID provides comparative tax data for countries world-wide. The data show that the move to modern taxation was global from the very beginning (figure 1). The data also show that modern taxation is a fiscal universal: with few exceptions (North Korea) all countries worldwide rely on the same tax instruments for most revenues.


Figure 1: Worldwide introduction of the first modern tax over time.

Second, a substantive bias towards personal income taxes and the VAT. TID brings other taxes that also matter for revenue (SSC, GST) and redistribution (INH, CIT) into the analysis. These other taxes were sometimes invented in unlikely places. They all have their own temporal profile of diffusion (Figure 2).


Figure 2: Introduction across time and tax type. First introducers in brackets.

Third, a sovereignty bias limiting tax policy analysis to sovereign states. Yet, modern taxes were often inherited from colonial rulers or foreign occupiers. In India, the PIT was introduced in 1886 to pay for the British Raj, and the CIT in 1916 to subsidize the British war effort (WWI). Both events laid the foundation of income taxation in present day India, Pakistan, Myanmar und Bangladesh.


Figure 3: Tax introductions by tax type and mode of introduction.

What can you do with it?

Tax introductions are key events because they provide the revenue basis for government expansion. They are worth studying in their own right (Genschel and Seelkopf 2022) or as part of more encompassing studies of state formation. They provide rough controls of state capacity for a global sample. They can also help elucidate the historical sources of contemporary fiscal performance. As figure 4 shows the dates of first introduction of a modern tax (of any type) is associated with capacity today. Is this purely spurious?


Figure 4: First tax introductions and current tax revenues. Data: TID and IMF (2014).

Limitations?

TID provides information on single historical events: tax introductions. It provides no information on the fiscal significance of the introductions or their long-term consequences. Yet, TID provides the necessary starting point for collecting data on these and related issues.

Bibliography

IMF. 2014. “Revenue Data for IMF Member Countries.” Washington, DC. Fiscal Affairs Department, Tax Policy Division, International Monetary Fund.

Genschel, Philipp, and Laura Seelkopf. 2019. “Tax Introduction Database (TID) —Codebook—.”

Genschel, Philipp, and Laura Seelkopf, eds. 2022. Global Taxation: How Modern Taxes Conquered the World. Oxford, New York: Oxford University Press.

Seelkopf, Laura, Moritz Bubek, Edgars Eihmanis, Joseph Ganderson, Julian Limberg, Youssef Mnaili, Paula Zuluaga, and Philipp Genschel. 2021. “The Rise of Modern Taxation: A New Comprehensive Dataset of Tax Introductions Worldwide.” The Review of International Organizations 16 (1): 239–63.