Trusting Leviathan: The Politics of Taxation in Britain 1799-1914
Martin Daunton
Cambridge: Cambridge University Press, 2001.
£35.00, xiii-438 pages, ISBN: 0-521-80372-1 (hardback).

Alain Lauzanne
Université de Rouen

Trusting Leviathan, by Michael Daunton, is a remarkable history of taxation in the 'long nineteenth century,' from the introduction of the income tax in 1799, during the wars with revolutionary France to the outbreak of the First World War. The subject is original and the book fills a gap since few historians touch on this complex topic, perhaps because they find it off-putting or fear that few fellow historians or students would be tempted to read a book devoted to the topic. In fact, Trusting Leviathan is not easy reading, since the reader needs a sound knowledge of the period to understand Daunton's analysis fully. The difficulty comes partly from the fact that Daunton examines the complex links between politics and the economy as well as the relationship between the state and its citizens, a relationship based on legitimacy, trust and consent. To facilitate the reader's task, he has endeavoured to make his book as academic as possible. At the beginning of each chapter he generally gives the gist of the preceding chapter in a few sentences and presents the main points that revolve around the new theme. Each chapter ends on a fairly long conclusion that can be of great help as some points are more or less difficult to grasp, especially for the non-specialist in economic history. The biographies of men who have played a role in the history of taxation, some of whom are not necessarily well known, are particularly welcome. So is the twenty-page-long index.

Daunton's study begins at the time of the French revolution, which, he argues, was partly caused by the defective management of taxes: "In France, the fiscal system created greater tensions, with fewer opportunities for bargaining and resolution of conflicts […] The decision to call the Estates General to resolve the financial crisis of the ancien régime escalated into revolution. In Britain, constant negotiation of taxation through parliament meant a higher level of consent to taxation" (7). In 1799, as the war against France was becoming more and more expensive, Pitt decided to introduce an income tax, which was a war tax—it was abandoned during the short period of peace in the years 1802-1803. Daunton's analysis of the post-war years is particularly interesting as he delves into the economic philosophy of the time. The state still needed money, for the national debt had to be paid off, and some people considered that the income tax was the best means to raise a large sum of money without putting too much pressure on the poorer classes. At that juncture, the government had the choice between the renewal of the income tax, which to many was synonymous with high expenditure and the end of direct taxation, which entailed a drastic reduction in expenditure. It chose the second solution, although by 1824, Liverpool, the Prime Minister, admitted in private that the country needed higher taxes (53). In fact "the failure of the government to renew the income tax in 1816 or 1819 meant that the fiscal system was highly dependent on customs and excise duties, hitting trade and industry, and falling more heavily on working-class consumers." (55)

Another consequence of the disappearance of income tax was inequality, as trade, industry, producers and poor consumers were much more affected than the landed interest. In spite of that, not everybody was convinced that Peel's decision to reintroduce income tax for a period of three years was a means of putting the economy back on its feet. A number of people feared that the income tax would be used to finance militarism, that it would lead to extravagance and that it would jeopardize personal liberty, as officials would inquire into private affairs. But in spite of criticism from radicals, free traders and Tories, the income tax was renewed. After the 1840s, the debate was not so much over whether it should be scrapped or not as over proportionality: "the important point was to ensure that the tax system as a whole fell proportionately on all levels and forms of income" (139). In fact a number of people wanted the government to make sure that there was a difference "between 'spontaneous' income and 'industrious' or 'precarious' income" (140). Death duties were often used as a means to ease the pressure for differentiation. They were central to Gladstone's vision of the equity of the tax system in the mid-Victorian period, and, in the early 1890s, in order to woo middle-class voters, Harcourt, Gladstone's Chancellor, offered them abatements to their income tax while using death duties to hit large unearned incomes so that "he could pose as the friend of hard-working, risk taking, independent and self-sufficient families" (255).

Another aspect of taxation broached is the link between taxation and the franchise, which became very important in the 1860s, when the right to vote was to be extended to part of the working classes. Daunton explains that Gladstone, who was convinced that the qualification in boroughs had to be reduced, did not want the annual rental to be lower than £7, for below that figure the working classes would have had a clear majority in urban constituencies. His attempts failed, however, and Disraeli's Reform Bill gave the working classes a majority in the urban electorate.

An important part of taxation consisted of local taxes, which accounted for about 14% of total taxation in the 1820s and as much as 34% by the First World War. In Chapter 9, entitled "Athenian Democracy: the Fiscal System and the Local State, 1835-1914," Daunton focuses on who was to pay and in what way for the investments in huge engineering works and municipal services, which expanded in the second half of the century after decades of under-investment. Here again, one sees the complex links between politics, the economy and the attitude of the citizens affected by local taxes. The Poor Law Amendment Act of 1834 provides a good illustration of all the elements that had to be taken into account. It ensured that "local power was in 'reliable' hands […] The power of beneficiaries was reduced by a system of plural voting for larger taxpayers […] The poor law was therefore made 'safe' and expenditure was brought under control" (264-65). Although the Municipal Corporations Act of 1835 seemed more democratic, as each ratepayer had only one vote, "control over the local government fell into the hands of small shopkeepers, house landlords and small manufacturers who did not wish to pay for the costs of pollution or poor sanitation," whereas the patrician oligarchy of local gentry and urban merchants it replaced was often "willing to embark on collective spending on urban improvements" (265).

The book ends with the pre-World War I period, during which the "Liberal government transformed the income tax by adopting both differentiation and graduation, as well as introducing new taxes on land and increasing death duties" (331). Daunton points out that on the eve of the First World War Britain's fiscal system was "more capable of sustaining the formidable demands of world-wide conflict than was the case in the other combatants," as the steady repayment of the national debt throughout the nineteenth century created confidence and would help make new loans forthcoming in times of emergency (375).

One aspect which could have been presented in more detail is indirect taxation, although parts of the book are devoted to this subject. It is regrettable that the author did not show the impact of indirect taxes on the labouring population throughout the nineteenth century, in particular the working classes and the lower middle classes. In spite of this minor criticism, Trusting Leviathan is a masterful study of taxation in the nineteenth century and offers information that is hard to find in other books.

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