-- Posted by Neil H. Buchanan
Every 4th of July, we see another round of tax posturing from the anti-government political forces in the United States. Other than April 15, July 4 is the day of the year when we can be sure that someone will claim that America's greatness is all about low taxes, suggesting (or, in many cases, simply asserting outright) that our founding fathers were early anti-tax ideologues. Links to two good examples were posted on the (invaluable and irreplaceable) TaxProf blog the other day (here).
One op-ed in the Wall Street Journal (where else?) talked about how great life was for the middle class in the colonies in 1776, with wonderfully low taxes. And it is surely true that taxes are higher now than they were in 1776. Of course, living standards are higher, life expectancy is longer, health care is better (but still much worse, for the average citizen, than in any other advanced country), the transportation system is (to put it mildly) more advanced, public sanitation has improved more than a little bit, education is no longer limited to male children of the propertied class, and so on. Government spending has been directly involved in each of those advances in society, but oh, those low taxes in 1776! If only we could go back to the days when we paid virtually nothing to the government, and we got what we paid for.
The other press release, from an anti-tax think-tank, assembled some carefully-chosen numbers to suggest that taxes have gone up -- or, more precisely, the numbers offered really are designed to show that the federal income tax system (but not, one must note, the overall U.S. tax system) has become more progressive since it began. In the context of that think-tank's other press releases, it is clear that they think of increased progressivity as a bad thing.
One of the marketing ploys of the anti-government crowd is to try to convince people that this country has always been against taxes -- indeed, that it was founded in protest against taxes. As others have noted many times in recent years (including this good, short piece by Joe Thorndike of Tax Analysts), the original Boston Tea Party was not a protest against high taxes. It was actually precipitated by a tax cut that was part of an 18th-century business bailout plan. It is true that there was a some anti-tax activity in the Revolutionary era, but much of it was not especially admirable -- either in tactics, or principles. The anti-tax activists in the colonies were, after all, in part complaining about being taxed to pay for their own defense.
Still, even if the revenue was being raised for good reasons, the colonists themselves should have been able to decide when and how to pay for their government services. It was all about taxation with representation, right? That makes sense. The problem is that the people waving the anti-tax banner today are no longer saying "taxation without representation is tyranny," but rather "taxation is tyranny." Those two missing words are pretty essential, one might think. We have gone from "Let's all decide how to come together to accomplish things as a group, and then pay for it," to "Taxation is theft."
One can take a principled position on the subject of taxes that differs from that of the founders. Indeed, given advances in accounting, political theory, organizational management, finance and banking, and information technology, it would be absurd to run our public sector as if the founders knew everything that there was to know about taxation. That would be fine, were it nor for the persistent efforts from the anti-government Right to claim legitimacy based on a few selected (and misrepresented) historical factoids from the time.
If anti-tax fervor were really such a big part of the founders' thinking, one would expect to find such sentiments expressed (probably in florid prose) in the key founding documents of the country. The only thing that could be said to amount to a tax limitation in the Constitution, however, is that tax bills must originate in the House of Representatives. That truly comported with the commitment to taxation with representation, which would result in lower taxes than taxation without representation only if the people decide that they do not want to tax themselves to finance a collection of joint efforts to improve the present and future of the nation.
And what of the other key founding document, the Declaration of Independence? That is where one might expect to see some great rhetorical flourishes against the evils of government and taxation, because the Declaration was not (like the Constitution) about the nuts and bolts of setting up the government of a new nation. The Declaration was where one of our greatest Revolutionary thinkers established the case for being a free and independent nation. The articulation of high principles and essential priorities was the very purpose of that document. If a case against taxes was to be made, surely it would be there in the words of the Declaration of Independence.
Back in 2005, as part of a guest-blogging gig, I wrote an essay for TaxProf that summarized what one finds in the Declaration. (Paul Caron, the founder and editor of TaxProf, has kindly reprinted my essay on a few subsequent Independence Days. Readers can find it here.) Before I wrote that essay, I had not read the Declaration in many years, probably since high school. As a result of the sheer marketing power of the anti-government movement in this country, even I expected to discover that the Declaration was an anti-tax document. It is not.
As I wrote in 2005: "Exactly one statement appears on the subject [of taxes]: The king had assented to Parliament's laws that 'impos[e] Taxes on us without our Consent.' That's it." That one statement about taxes really is about taxation without representation, not about taxes being too high -- and certainly not about taxes being fundamentally illegitimate. And the rest of the Declaration is a call for government, for courts and laws (and thus lawyers), for legislatures, and for the various elements of modern representative democracy.
None of these truths will stop or slow down the political movement that is currently claiming its legitimacy based on a gross misreading of history. Their purpose, after all, is not to honor history, but to use whatever tools it can fashion to further reduce taxes on the wealthiest Americans. For those who wish to resist that political juggernaut, it is at least useful to know that, when it comes to history, the anti-government crowd is just making stuff up.