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As states get stronger, they are expected to be more successful in suppressing the active insurgency and limiting their activities against the state. This study examines the relationship between an important dimension of state capacity, namely extraction of resources and civil war onset. The ability of the state to extract resources from the society is of great importance because all states need financial resources to enforce is will over citizens and to govern effectively. Revenue is not only essential to strengthen the military capabilities that will suppress the insurgency or fight with external enemies, but also to control the territory and the population, to implement state policies and carry out various goals (national security, economic development, financing of macroeconomic stabilization programs), and to provide public goods and other services (e.g. justice, health care, education, job training and infrastructure). As a result we expect states with higher levels of tax revenue to have a lower risk of civil wars. Utilizing time-series, cross-nation data for the 1975-1995 period, the empirical findings suggest that as the level of the government extraction increases, the likelihood of civil war onset declines significantly, controlling for several other economic, demographic, and political factors. Our findings demonstrate that the state's extractive capacity is vital for the maintenance of peace and that higher levels of tax revenue have a strong pacifying effect on civil war. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]