This week in North Philly Notes, Linda Upham-Bornstein, author of “Mr. Taxpayer versus Mr. Tax Spender”, writes about what she unexpectedly discovered about the taxpayers’ associations during the Great Depression.
“Mr. Taxpayer versus Mr. Tax Spender” is, at least in part, the product of serendipity. About 25 years ago, my husband and I were reorganizing the basement of his law office in New Hampshire when I happened upon a box containing bound copies of the Coos Guardian from 1934, of which Arthur J. Bergeron, the firm’s retired senior partner, was the editor. This weekly newspaper provided contemporaneous accounts of the efforts of Arthur and the newly formed local taxpayers’ association to effectuate economic and political change in the community, region, and state. This story spurred me to investigate whether this manifestation of organized taxpayer activity was unique to northern New Hampshire or part of a broader movement during the Great Depression. In the ensuing years I identified a plethora of rich, untapped primary sources that documented the emergence of a nationwide taxpayers’ association movement in the 1930s.
A number of my findings surprised me. Among the most prominent are the magnitude of the tax revolt and the speed with which taxpayers’ groups multiplied; the attitudes of organized taxpayers toward the size and reach of government; and the distinctive form of collective tax resistance that emerged in the Reconstruction South.
The proliferation of taxpayers’ leagues in the early 1930s was remarkable. In 1928, they probably numbered fifty or so. As the domestic economy contracted, a good government professional observed in 1932, “an irresistible demand that the cost of local government be reduced” swept “across the country like a prairie fire.” By 1933 there were over four thousand taxpayers’ organizations nationwide.
The attitudes of tax resisters toward the role and reach of government in general, and toward the New Deal in particular, were also unexpected. Because much of modern tax resistance is grounded in the world view, articulated by Ronald Reagan in his first inaugural address, that “government is not the solution to our problems; government is the problem,” I anticipated that Depression-era tax revolters would exhibit intense antistatism. Although some organized taxpayers sought to shrink and shackle government, most did not want smaller, more limited government but rather government that was more efficient, more effective, more progressive, and able to provide necessary services in a cost-effective manner. Nearly all taxpayers wanted the price of government to undergo the same measure of deflation as the economy, but they also wanted to maintain the government services they needed and used. What most organized taxpayers desired was less expensive state and local government so as to reduce their state and local tax burdens.
The views of organized taxpayers toward the New Deal were a complicated and sometimes incongruous mix. The feelings of most members of taxpayers’ associations about the New Deal ranged from outright support to ambivalence. Two factors account for the overall lack of opposition to the New Deal from citizens who were protesting vigorously their state and local taxes.
First and foremost, New Deal programs were conferring direct, concrete benefits on many of these taxpayers, especially the housing, agricultural, and relief initiatives. Consequently, many members of taxpayers’ groups understandably welcomed—and some expected—the federal government’s intervention in the domestic economy. Even taxpayers with an individualistic, antistatist mindset tended to have mixed feelings about the New Deal, harboring suspicions of big government but recognizing their need for assistance from the Roosevelt administration and grudgingly accepting it.
Second, the New Deal tax regime did not produce significant tax awareness among or tax resistance from the middle classes because it eschewed taxing the income of the middle classes and instead relied mainly on taxes on the wealthy and corporations, on indirect or hidden consumer taxes, and on taxes (like social security payroll taxes) that taxpayers did not think of as taxes. By and large, taxpayers who participated in collective tax resistance at the local and state levels did not perceive New Deal spending to be adding to their tax burdens.
In my investigation of the 19th-century origins and antecedents of Depression-era taxpayers’ associations, I was struck by how different collective tax resistance in the Reconstruction South was from organized taxpayer activity elsewhere. Outside the former confederate states, the overarching goal of nearly all taxpayers’ associations in this era was to reduce taxes, though in many cases taxpayers also had a genuine interest in promoting the public’s interest in good and efficient government. In the Reconstruction South, however, tax resistance under the guise of good citizenship was merely the means to other, ulterior ends. Taxpayers in the South used collective tax resistance in an effort to weaken government authority, “redeem” state governments from Republican control, reestablish the institutions of white supremacy, and nullify in practice (if not as a matter of law) the post-Civil War amendments to the United States Constitution. Taxpayers’ groups in the South also diverged from those in the North in their methods, including extrajudicial violence, which was absent from tax protests outside the former Confederacy.
Finally, tax resistance in the South was untethered to the evolving notions of civic responsibility and good citizenship that broadly animated Northern tax resistance. Most taxpayers’ groups outside the South were interested in, and worked for, better and more efficient government. Southern taxpayers’ leagues wanted the opposite: government that was worse, small, and ineffectual. The Redeemers were highly successful in their quest for low taxes, low spending, and weak state governments after 1877. In Mississippi, for example, between 1875 and 1885, Democrats cut the state budget by more than half and slashed taxes. The connections between organized tax resistance in the South and the commitment to good citizenship, better government, and the rule of law that most Northern taxpayers’ organizations evidenced was attenuated at best and often absent altogether.
Historians strive to be objective, but they often approach the subjects of their research with certain preconceptions. My investigation of organized taxpayer activity in the 1930s reminded me of the importance of keeping an open mind, expecting to find the unexpected, and adapting one’s historical analysis accordingly.
Filed under: sociology, economics/business, american studies, political science, Labor Studies, History, ethics | Tagged: government, taxes, The Great Depression, taxpayer associations, The New Deal, American History | Leave a comment »