The Tax Revolt and American Politics

Tax revolts have been a blind spot in American history writing since about the mid-thirties. Work like David Beito’s (“Tax Revolts in American History,” Humane Studies Review, Winter 1986-87) holds great promise for refocusing attention on a phenomenon that ranged from grass-roots activity to constitutional theory. The tax-limitation issue has been so pervasive in American history that it is nothing short of a key to understanding our political and constitutional character.

Dr. Beito is radically changing our impression of lower-middle and working class attitudes during the Great Depression. As he shows for Chicago, many from this constituency, supposedly the main force for social reform, actually responded to the economic dislocation by calling for lower taxes and reduced government. The pattern holds through the industrial Midwest. Ballot initiatives in Ohio and Michigan in 1932 imposed property-tax limits that are still in force. It would be well worth researching the extent to which this ferment overlapped or fed into the period’s better-known cases of labor unrest. Flint, Michigan, site of the sit-down strikes that led to the founding of the United Auto Workers, was one of the charter cities that voted to accept the stringent property-tax limits.

Although New Deal historians have had understandable trouble assimilating the tax revolt to their own version of the period, the problem doesn’t end there. The premise of tax limitation itself comes from a school of political economy that early twentieth century “Progressive” historians tried their best to bury — namely the free-market theory of Adam Smith and J. B. Say. A cursory survey of nineteenth century tax-and spending-limit debates shows how deeply these economic principles had been engrained in American fiscal policy. The Jacksonian period itself is largely incomprehensible without specific reference to Smith and Say, its most influential authors on public policy. Several waves of state constitutional amendment, invariably in response to rapidly rising tax burdens, codified these principles of limited state spending. When the Progressive Era propagandists tried to promote more active government, this entrenched public philosophy was their greatest obstacle. To defeat it, they had to deny that it existed. Hence there appeared a spate of articles and books claiming that the American republic had no philosophy, that the Founders were shallow and “pragmatic” thinkers and that economic policy was a function of economic interests.

The study of the tax revolt shows, on the contrary, that a broad and consistent political economy does run through American history, emerging in periodical revisions of state constitutions and in popular ferment. Dr. Beito’s essay points to just a part of this tradition, which awaits further rediscovery.

James Ring Adams is Senior Editor of Forbes magazine and author of Secrets of the Tax Revolt (Harcourt Brace Jovanovich, 1984). neglected by classical liberal historians. This issue is important precisely because most modern political thinking accepts the nineteenth-century historians’ assumption that national states are timeless and inevitable: the question is not whether to have national states, but how to organize them, or how to prevent them from blowing one another up. One of the first jobs of the classical liberal, therefore, in attempting to counter this unquestioning acceptance of the state, is to show that the national state is contingent rather than necessary, and to trace the steps by which it came into being and came to dominate all other forms of organization in early modern Europe.