The One Thing, Historically, That’s Prompted Countries to Raise Taxes on the Rich
“The key events we see in driving that inverted U-shape are mass mobilization for war,” Scheve explains. When countries (especially democratic ones) mobilized for war, questions about fairness came to a head, because—even during nationwide drafts—it was most often the lower and middle classes that were on the front lines. “The actual rhetoric of the times was, if you’re going to conscript labor, you need to conscript capital,” Scheve says.
.. Scheve and Stasavage explain the story of taxation in the past two centuries with what they call the compensatory theory of taxation—the (fairly intuitive) idea that higher tax rates will be accepted as fair only if there’s a consensus, across all earners, that the rich are getting more benefits from the state than they’re contributing in tax revenues.