Tax law in the views and policies of Andrew Mellon
DOI:
https://doi.org/10.26485/SPE/2021/119/7Keywords:
Taxes, Andrew Mellon, income tax, tax policy, United States, 1920s, Great Depression, finance, supply-sideAbstract
Background: As a precursor of neoliberal (supply-side) financial policies, Andrew Mellon (1855–1937) was one of the most important figures in American politics before World War II. He went down in history not only as a financial and industrial magnate, but also as one of the longest-serving secretaries of the treasury and chairmen of the Federal Reserve Board. He was de facto in charge of the American economy, both in times of “the Roaring 20s” as well as at the beginning of the Great Depression in the 1930s.
Research purpose: The article presents the doctrinal assumptions, especially the legal ones, of each of Mellon’s reforms from1921–1929, in which he advocated low taxation, reduction of the public debt and balanced budgets.
Methods: Historical and descriptive.
Conclusions: The article presents the initial successes of Mellon’s reform (resulting in, i.a., budget surpluses and economic growth), as well as their long-term consequences at the turn of the 1920s and 1930s, when on the threshold of a multi-year financial crisis, Mellon withdrew from no small part of his earlier postulates, and just before leaving his functions – despite the decline in economic activity in the US and rising unemployment – he proposed numerous tax increases, criticizing, among others, the effects resulting from the so-called automatic stabilizers of income taxation.
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