A deep dive into organized taxpayer activity in the 1930s

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 19^th-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.

Overcoming Isolation in the Great Depression

This week in North Philly Notes, Abigail Trollinger, author of Becoming Entitled, writes about how workers in the 1930’s shed the stigma of unemployment and gained a sense of entitlement, and what we can learn in the age of COVID.

Unemployment is often hugely isolating, even when it happens en masse. It was for workers in 1932, at the height of the Great Depression. And considering recent debates over unemployment insurance, it seems that COVID-related unemployment has left many jobless workers facing economic insecurity alone.

Becoming Entitled: Relief, Unemployment, and Reform During the Great Depression tells the story of jobless workers and the urban reformers who worked to redeem them. It was an uphill climb: in the 1930’s, workers faced an American culture that was slow to defend the jobless and a federal government that was unwilling to fund the relief they needed, situations that only seemed to reinforce a jobless worker’s feeling of personal failure. As one worker described in Chicago of that year, “I was out of work two years last month. I have never gone for charity. I was ashamed to go.”

In 1932 Chicago reformers rightly sensed, then, that an unemployed worker’s first step toward survival might be the small step of seeing others like them and shedding their sense of shame. Which is why, in Chicago, the newly founded Workers’ Committee on Unemployment (WCOU) hosted seven hearings across the city that allowed workers to tell their stories, and to hear the stories of their neighbors, their landlords, their grocers, and their kids’ teachers. Once workers saw themselves as part of a group, rather than part of the problem, they were able to craft solutions to the economic crisis facing them. As members of the WCOU, workers offered collective action to solve both immediate and long-term problems.

Was a jobless worker’s electricity shut off suddenly, leaving their family in the dark? A formerly employed electrical worker could come turn it back on! Was a family unable to pay rent and thrown on the street? A WCOU member with a truck could help them move! Was a caseworker routinely cutting clients relief funds? The WCOU was there—protesting at the relief site! And were the state and federal governments failing to provide relief where it was highly deserved and much needed? The WCOU was ready to protest—like the 1932 silent march through Chicago.

What emerged from the hearings, the mutual assistance, and the protests was a sense of worker entitlement, or the belief that jobless workers had the right to ask for protection from the state—that when the economy fails, the state is responsible for preserving the dignity and livelihood of those most impacted. As a WCOU pamphlet on declining relief budgets said, “You are entitled to live.… We can not beg all the time. We must ask and demand.”

Unemployment and isolation. These are not unfamiliar concepts for many Americans right now, as the nation has faced unemployment rates between 8-14% since the beginning of the COVID-19 pandemic. Jobless workers in the U.S. have had support in the form of the CARES Act and some stopgap emergency funds, and yet they, too, face questions about how much relief they really need. Debates in Congress over stimulus plans (the Heroes Act and the Heals Act), in which legislation has stalled over how much weekly income the unemployed should receive (ranging between $200 and $600 a week), suggest that either jobless workers have a miraculous economy of thrift or that they earn more than they say. And on October 5 the Wall Street Journal reported that some states are requesting that workers who were inadvertently paid more than they were allotted should return as much as $8,000 to the state.

Workers in 1932 did not have a pandemic to reckon with, but their story is a reminder of the fact that entitlement is not a given, even in the midst of national crisis. As we approach the 2020 election, let us call for a generous entitlement that offers both relief and dignity to the many thousands of Americans who currently feel isolated in their economic insecurity.