The more things change, the more they stay the same. Taxes, for instance, have been changing and staying the same ever since Ronald Reagan and the 1980s: They’ve been heaven for corporations and the rich, purgatory or worse for everybody else.
Now comes a groundbreaking book that looks back not just decades but centuries. It’s Vanessa A. Williamson’s “The Price of Democracy: The Revolutionary Power of Taxation in American History.” The surprises never stop coming.
Surprise No. 1, the Boston Tea Party. We’ve been brainwashed into believing that taxes were the cause. Not so; the Sons of Liberty were actually opposing the bailout of the “too big to fail” East India Company. As Samuel Adams warned, the bailout was “introductive to Monopolies.”
Williamson says the colonists never objected to paying taxes. “To the extent the American Revolution was about taxation,” she writes, “it was about the desire of Americans to tax themselves…”
Come 1787, the new America had to decide what its own tax policies would be. Next surprise, the framers of the Constitution agreed that the wealthy few had to be protected from the masses. Listen to this from Alexander Hamilton: “All communities divide themselves into the few and the many. The first are the rich and well-born, the other the mass of the people.” As Hamilton saw it, the people “seldom judge or determine right.”
Thomas Paine saw things the other way around.
Everybody knows that Paine helped ignite the American Revolution. Not many know that he wanted a tax revolution as well. Paine worried about the “overgrown influence” of wealth, calling it “one of the principal sources of corruption at elections.” He wanted marginal income tax rates, topping out at 100%. Echoing Paine, an early New York newspaper proposed that “men should by every fair means be legally prevented from becoming exorbitantly rich”.
In 1857, the South was angered by a tax surprise of its own making: A little-known Southern writer, Hinton Helper, called for taxing slavery out of existence. His book, “The Impending Crisis of the South,” presented reams of statistics comparing the region unfavorably to the North. Taxes on slaves, he wrote, should be raised until they delivered “an infallible deathblow” to the practice.
Ironically, Helper was a racist. He wanted slavery abolished only because it was economically crippling the Southern states. In 1988, the late historian George M. Frederickson called Helper’s treatise “the most important single book, in terms of its political impact,” ever published in the United States.
Decades later, an amendment to the Constitution amended the history of taxation in America.
In 1913, the 16th Amendment gave Congress the power to “lay and collect taxes on incomes, from whatever source derived…” Finally, despite the constant opposition of the few, the many could now leverage their numbers in shaping the nation’s tax policies.
They used that leverage to help create both Social Security and Medicare, the two most egalitarian social welfare programs in America. The votes in the House of Representatives (often called the People’s House) were 372-33 for Social Security and 313-115 for Medicare.
Over the years the programs have become prime examples of how most Americans really feel about taxes: They’re happy to pay them when the money goes toward a common goal.
They’re unhappy, though, with the most expensive welfare state ever created. It’s not for people who need anything, it’s for people who already have everything. It’s evolved over decades, paid for with zillions of tax break dollars and other giveaways, all redistributed to the few.
When they should have been distributed to the many, and made a better America for everybody.
Scorse writes on taxes.