ABSTRACT
The power to impose and collect tax is a defining characteristic of a modem capitalist state. It was Joseph Schumpeter who, prior to his appointment as Finance Minister in the Austrian Government after World War I, described the capitalist state as the ‘taxcollecting state’. In his 1918 paper entitled ‘The Crisis of the Tax State’, he wrote that ‘...“tax” has so much to do with “state” that the expression “tax state” might almost be considered a pleonasm.’ (Schumpeter 1918). For Schumpeter, the origins of the capitalist state (at least in Germany and Austria) arose, not from political needs, but from fiscal needs. It is the fiscal demands and the tax-collecting powers, bom out of a ‘common exigency’ that distinguishes the modem capitalist system from its predecessor, the feudal system, he argued.
