Our Civic Duties: A History of Taxes
Since 1765, when England imposed the Stamp Act–its first direct tax on colonists–generations of Americans have rallied around their hatred of “unfair” taxes. “Taxation without representation is tyranny” was the rallying cry of the Revolution, and quick on the heels of independence, Americans seized arms once more to protest the taxation of whiskey to pay off our brand new national debt. These days, Tea Party supporters are out on the streets decrying the abuses of our current system. And yet, as Oliver Wendell Holmes reminded us, “Taxes are the price of civilization.”
This episode of BackStory will take a look at the historical tension between the necessity of paying for government, and the feeling of being robbed by it. Are Americans especially adverse to taxes? Why has government often turned to “sin” as a source of revenue? Does war always lead to higher taxes?
What questions are we leaving out? Are you an April grumbler, or do you happily share your spare change with old Uncle Sam? Share your thoughts and questions with us below!
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Quote -- March 13, 2010 @ 11:49 am
I’m really looking forward to this episode, in part because I’m troubled by a couple of popular notions from the past thirty years. One is illustrated by Ronald Reagan’s nine scary words: “I’m from the government, and I’m here to help.” Among the implications of that one-liner is that paying taxes funds (and thereby encourages) government incompetence. It’s all very well to chuckle over the idea, but aren’t there some issues government must handle? And if government is underfunded, doesn’t that produce the very incompetence alluded to in Reagan’s jest? Can you say, “self-fulfilling prophecy”?
The other notion is likely nearly as old, but is most recently suggested by George W. Bush’s suggestion that the taxpayers’ money is the taxpayers’. It sounds great superficially, and it plays on the amorphous nature of the concept of “the people” in a political context. Taken to logical (albeit extreme) conclusions, might it not lead to a corollary of the tragedy of the commons, namely the decline and fall of infrastructure? Will people begrudge road construction and maintenance in neighborhoods they don’t visit? Will people try to refuse to fund programs they actually use out of ignorance (see “Keep your government hands off my Medicare.”) By implicitly undermining government (or explicitly, if you’re Grover Norquist), are we not endangering our civilization?
QuoteHistory guys,
For me, collecting taxes gets to the core of the reasons why we have government. This is especially the case if we are going to do something (govern) other than have Queens, Kings and Lords rule.
it is a good thing to put the Stamp Act in the context of a nation that just completed an expensive war to protect its colony and expected the grateful colony to pick up part of the costs….
QuoteI am the Director of the Museum of Vision in San Francisco. The museum’s collection is owned by The American Academy of Ophththalmology and is focused on the history of eye medicine, especially in the United States. Within the collection I have two revenue stamps issued during the Civil War for patent medicines- in this case for bogus eye mediciations but my understanding is that all medications were taxed in this way. My question is this- I thought the Stamp Act was a Revolutionary War thing- why is it being used to finance the Civil War? Do you guys know if it raised a lot of money? I have read that patent medicine in the 1800s was big business, but this seems like it was an antiquated way to raise money by the government- or do I just not know my tax history very well? Just for full disclosure, I was a caller on your last show- Love Did Me- I didn’t expect to have another question for you so soon, but obviously I’m a real fan! Thanks!
QuoteThe biggest question about American taxes for me is why the Founders forbid the federal government from collecting taxes from the people directly in the Constitution and then, in 1913, we changed the Constitution. What effect did this have on the size of the federal government? Would FDR’s New Deal have been possible without this amendment? Would the Tea Party have any momentum if the federal government could not tax us directly? What relationship would the state governments have with the federal government today? Would the Tenth Amendment still have any authority if the federal government could not finance itself this way?
Another question to explore is how government has used taxes to punish. When the media was upset about corporate bonuses recently, Congress retroactively raised the tax rate on those bonuses to punish the companies and the individuals involved despite the Constitution clearly prohibiting ex post facto laws. Taxes are necessary to govern the country, but the power to tax is also the power to destroy.
QuoteThere are three things that interest me here:
My understanding is that the real point of “no taxation without representation” lies in the last two words, not the first two, as the current tea bag brouhahas seem to suggest. (And as someone who grew up in DC, I am one of a few Americans who have actually lived in that state (with a lower case s.) It wasn’t that taxes were being imposed, but that the decisions were coming from London, which riled the Colonists. Yet they viewed representation in Parliament as impractical and, I think, undesirable even if it was possible. Yet less than two decades later, we had already suffered two rebellions — Shays and the Whiskey — that seemed to twist the original concept into a expression of a different form of powerlessness, since these people were represented in the taxing body and, in fact, probably had even had a chance to vote to approve the Constitution. Why was that? And why do people think they are entitled to tax-funded services and “rights” without any obligation to pay for them? Was taxation for specific purposes — or for a complex budget — always a source of instability rather than of unity?
As for Federal tax of individuals, I think it had happened prior to the 1913 amendment, during the Civil War, for example — so if that amendment was necessary, why wasn’t it required 50 years earlier?
Third, could you discuss the importance of the need for reliable revenue sources to fund a national government of any size as a driver to holding the Constitutional Convention? It seems to me that once we asserted that liberty and independence were our goal, we really focused on revenue — for the state, and for ourselves — as the most critical issue, and that this continues until today.
English and other European history is replete with the continuing concern of royalty with maintaining national revenue. How does our country’s progression on this path compare with nations such as Britain, France, Germany, etc?
QuoteBSR,
We in the US have long had a problem coping with the ‘doublethink’ of the federal system our Founders set up. Are we citizens of a State or of the Nation? R E Lee answered this as late as the Civil War by opting for his State. Much of the tension of the period before the Civil War was a struggle over exactly this. In the one case, Calhoun and his ilk claimed, in defense of their special arrangement, that State’ Rights were paramount, and the ever escalating rhetoric (eg, of Stevenson from Georgia) lead to more and more sclerotic positions and ultimately to secession. Earlier Clay and crew from the West essentially fomented a war (with Spain) over their special State interests at the expense of the National commonweal.
I see a similar conflict between one governmental perspectives having developed in modern times around many questions, including tax policy. It seems to me that it dates perhaps to the 50s or a little later in its beginnings. Like most things in American politics (and life), it attempts to find ancient roots in the Founders opinions, writings, or enactments, claiming said tradition as a touchstone for legitimacy. The key intellectual, or policy, prybar seems to be taxation policy, especially that of the National government. Others have noted, above, some of the slogans that have been used to support this complex of positions. The talking points memos are continuing this on the screaming heads programs on TV, inflaming the base in the interest of this confluence of pressure politics.
There seems to be some incoherence in them. For instance, a vehement hostility to taxation leads, via “Don’t tax me, don’t tax thee, tax the leprechaun behind that tree”, to the logically impossible position that no taxation is the ideal and that costs will be covered from the leprechaun’s pot of gold. Unless, as seems to be the case, the object is really something different: to control other government policies. On this reading, all government policy except for xxx, by starving it of funding. This fits with the formula, most famously from Grover Norquist, “Starve the beast”.
We can see this approach applied, in the state laboratories for policy experimentation, in California, and increasingly in new York, and at a local level in such places as Colorado Springs. Quite a number of others seem to be close in train. In those places, catastrophe has already arrived, or will soon be arriving. One may note the devotion of some voters who have enacted legislation via “Proposition” which depends, almost totally,on that leprechaun’s gold, politicians having been put in a structurally impossible position, in addition to the normal political tussle toward turgor. This approach is inherently, by itself, as well as in combination amongst and between other desired policies, contradictory. When backed up by the authority of one or another economic school, whose prescriptions are taken as a matter of Faith (since none of the schools favored by those backing this tax policy position, have any experimental support from actual experience, and a great deal of experimental evidence that they are based on something other than reality). This, regardless of prestige (eg, from Economic Nobels awarded) or academic positions or popular acclaim or backing from assorted business luminaries (many of whom have demonstrated in the past 20 years or more and especially quite recently, that they have little understanding even of their supposed area of expertise, efficient and profitable operation of their businesses).
Additional confusions in re tax policy come, at the National level in the US (and everywhere else which has monetary system oversight) from the widely held mystery of what money is. Many people see it as a tangible thing (a gold coin, or silver change) and resent that paper money is no longer convertible to such objects. How it is that money can be printed (by the appropriate agency in various places) is a matter of suspicion as it appears to produce in some mysterious magical (and alarming) way, more money. Since no printing press, nor government agency can create more of the tangible things which are thought to be money, this must be Evidence of Perfidy. Just who or what charge of this Malevolence (directed against quite whom is a bit misty in most accounts) is a matter of much careful analysis. The Gnomes of Zurich were once important here, and Wall Street villains (or Railroad villains) have been favorites at various times in American history. Just now, Wall street seems to be ascendant. Mere criminality is not sufficient in most analyses, as some dark plotting in secret control rooms is somehow involved. Jackson’;s campaign against the Bank of The United States would seem to have had some similar roots. Plus, he regarded Biddle and company as simply Evil. A simple variant of this is often heard: “Just like a family, one’s income (ie, taxes in) can’t exceed one’s spending (ie, government purchasing or wages or debt repayment), lest there be disaster.” .While true for state and local governments (modulo borrowing from investors of some kind), this is not true for governments which control the monetary supply. They can print more money, at the risk of eventually touching off unacceptable inflation (eg, Weimar Germany or Argentina, or Zimbabwe). If we keep spending down, we can balance budgets and so avoid the family-like problem of spending more than we take in. That anything else can happen is matter of much mystery.
So we see that ignorance of the special qualities of entities which have control of their monetary supply in contrast to others which do not, affecting tax policy in any entity in which such policies are a matter of popular control such as (albeit indirectly) in a representative republic as the US..
You may not be able to explain the historical development of the latter issue, as it is inability to understand the mystery of money, leading to many an urban conspiracy legend. But the development history of the first, tax policy as a stalking horse for other policy pressures, is a natural. How about it?
Niall Ferguson’s book is likely to be a useful source. and John Cassidy’s (the New Yorker writer) recent one will be useful in understanding the importance of the unfortunate influence of the economic school which has been dominant in developed countries since at least the days of Reagan and Thatcher.
Best wishes,
ww
QuoteI think the notion of taxes has become a perverted and abused concept. Reports yesterday that so-called stimulus money was being used to fund a North Carolina study of monkeys on pot, or a California study to examine the sex lives of female college freshmen has become the norm rather than an outlandish example of government waste. New bills pushing un-Constitutional concepts like a value-added tax, and taxes on beverages or fast food pushes us into slippery slope land where fines are being levied to control the private sector and force them to conform to special interest groups and THEIR notion of how to behave.
(Great site, btw)
QuoteWith Americans being taxed to death, new inroads are being made to chip away at property and liberty (what is money after all, but PROPERTY gained from the toil and sweat of a man’s youth? ) Are we still foolish enough to believe that government has a better idea of how to spend your money than you do?
In the Netherlands, drivers on the highway pay a “green tax”. Some legislators in America were toying with the notion of an “Afghanistan Surge Tax”. The Beatles were more than prophetic when they sang about ‘declaring the pennies on your eyes’. In some states when you die, you can’t even give your children the money you worked for all of your life. Nearly HALF is taken for a ‘death tax’.
Its time for people to become like Howard Beale and become so fed up that they’re NOT going to take it anymore.
Oh what a wonderful world this would be if we paid no taxes to our government. In fact if we paid no taxes, we would not even need a government. Instead of taxes supporting the common good, it would fall to each individual to fill any potholes in front of their house, clear roadways of snow in winter and trim trees that threaten to pull down public utility lines. we shouldn’t have to worry about all of thgis for long since we would no longer have governmental agencies such as the US Coast Guard, Immigration and Naturalization, even the Homeland Security to protect us from the sudden glut of new residences who would claim any home found empty even for the shortest period of time. No government means no Court House archives to prove ownership but we shouldn’t worry about that since without a military defense force we would soon finds ourselves comtrolled by any foreign entity with the price of airfare into the US amd a bundle of cash to buy thousands of guns thanks to the NRA. We would not have such nuisances as public schools amd the right of redress amd any semblance of a rule of law. Lock your doors tightly since there is no police force and buy lots of marshmellows to hold over your burning hgouse if it catches fire since there will be no fire department. without road and bridge maintenance we will have to wait and see when we run out of fresh food, gasoline and other life saving commodities such as medical goods and medicines. At least without government we would not have to worry about auses of emergency rooms since these would no longer exist having clised their doors when public funding stopped. No point trying to leave for more sane and better run countries since without air traffic controllers planes stopped running into tje US amd ships cannot get fuel to leave port. Canada and Mexico seeing the fllod of people comin g ferom Anerica to escape this chaos have already locked their borders to anyone leaving the US. We have not, of course, locked our borders since we have to Border Police. Now all we have to do is figure out what we can spend all that savings we have amassed from not having to pay any taxes or to have to pay for any government. We need to spend it quick however, since our own dollar, which is now no longer being printed or supported ny any type of national entity has become increasignly worthless. Yes, what a wonderful world it would be.
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