Balkinization  

Tuesday, July 03, 2012

Research Note: The Postwar Right’s Constitutionalist Anti-Tax Movement

Ken Kersch


In the wake of the Supreme Court’s holding that the ACA mandate is a tax, we’re probably due to recall that while there was certainly staunch objection on the Right to the expansive new interpretations of the commerce clause that underwrote the New Deal, conservatives also had vigorous objections to its innovative taxation initiatives as well. They even got up considerable steam for calling a constitutional convention to deal with tax issues. David Beito wrote an important book on this that is well worth a look (David Beito, Taxpayers in Revolt: Tax Resistance during the Great Depression (Chapel Hill: University of North Carolina Press, 1989)).

As the Supreme Court’s decision in the Health Care Cases came down, I happened to be writing on one of the leaders of the Right’s postwar anti-tax crusade, Vivien Kellems (1896-1975), a wealthy industrialist (she was founder and president of the Kellems Cable Grip Company, whose grips were used in the construction of the Chrysler Building, the George Washington Bridge, and other structures), feminist (she was a strong proponent of the Equal Rights Amendment) – and an outspoken opponent of taxes in general, and the federal income tax in particular. Kellems was convinced that the federal requirement that she withhold taxes from her employees’ paychecks was unconstitutional.  In 1948, with the aim of spurring a test case, she withheld her withholding. Her tax resistance was a sensation: she defended her actions as one of the first women to appear on Meet the Press (September 26, 1948), and on Eleanor Roosevelt’s Sunday television show Today with Mrs. Roosevelt (March 3, 1950), where the subject was “Is the tax system of the U.S. unfair?” Kellems subsequently set out her position (and story) at greater length in her book Toil, Taxes, and Trouble (1952). There, Kellems set out her position against the federal tax system inaugurated by the adoption of the Sixteenth Amendment, which had laid waste to approach to taxation that had been “so carefully designed and perfected by the brilliant men who wrote our Constitution.” “When we adopted this income tax amendment,” Kellems insisted, “we departed from our constitutional method of taxation.”:

 “For one hundred and twenty-five years, the Federal Government had levied taxes and they were always apportioned among the several States. Why do you suppose the Constitution is so specific and so explicit that Federal taxes shall be uniform and apportioned among the States? For one reason only. Our forefathers were determined to build a republic with equal opportunity and equal responsibility for each and everyone of us. They knew that the power to tax is the power to destroy, and they did not wish to have one group of citizens, or one part of the country penalized for the unfair advantage of another.”

It was the tax system as originally designed by the nation’s Founders that had helped make the United States “the richest, most powerful nation in the world.” Then “[w]e chucked our proven system of taxation out the window, and we passed the income tax. Gone was our uniformity, gone was our apportionment among the States. And with uniformity and apportionment went a great deal more—our fundamental American rights.” The income tax started at the relatively painless level of two percent, but had moved up to exorbitant, even confiscatory, levels ever since. With the barn door open, soon the rest of the horses were out too. Congress enacted a capital gains tax “which slapped business right in the face and sent it reeling into the corner.” This was followed by a capital stock tax, and also a tax on dividends. Soon, the New Dealers were enacting a new tax “every day or two! They rained upon us as the gentle dew from Heaven. “’Tax and tax, spend and spend, elect and elect,’ quoth the delighted Harry Hopkins.” The dynamic was set in motion. “Soak the rich …. The formula worked like magic for political purposes but it threw our country into the deepest and most tragic depression of our history. The depression of the 1930’s was a tax depression. Business simply could not function.”

For many on the Right, these arguments have never lost their purchase. Their ideological frames tie the ACA directly to the ongoing economic meltdown. In this context, Romney – not in spite of his status as a proud capitalist, but because of it -- can play the hero to a well-tutored conservative movement.












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