Taxes dominate domestic politics. They didn’t always. Since the nineteen-seventies, almost all of that talk has been about cuts, which ought to be surprising, because more than ninety per cent of Americans receive social or economic security benefits from the federal government. Americans, though, find it easier to see what they pay than what they get—not because they aren’t paying attention but because the case for taxation is so seldom made.
Damning taxes is a piece of cake. It’s defending them that’s hard. “Taxes are what we pay for civilized society,” Oliver Wendell Holmes, Jr., said, nearly a century ago. (His words are engraved on the front of the I.R.S. Building in Washington.) No one’s said it better since. And that, right there, is the problem.
Taxes, which date to the beginning of recorded history, are payments made to a ruler in exchange for military protection, public services, and civil order. In the ancient world, taxes were paid in kind: landowners paid in crops or livestock; the landless paid with their labor. Taxing trade made medieval monarchs rich and funded the early-modern state. Then a series of political revolutions began that led to monarchs ceding the power to tax to legislatures.
One of those revolutions lies behind American independence. Early Americans, though, didn’t only deny the king’s right to tax; they questioned the legislature’s. When American colonists challenged Parliament’s right to tax them, Edmund Burke predicted chaos, “a perpetual quarrel.” Meanwhile, another kind of debate had begun. “The expenses of government, having for their object the interests of all, should be borne by every one,” the French minister Anne-Robert-Jacques Turgot remarked, “and the more a man enjoys the advantages of society, the more he ought to hold himself honoured in contributing to these expenses.” Adam Smith expressed much the same view in “The Wealth of Nations,” in 1776: “The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities.”
In the United States, there existed a kind of property decried in England and France: a property in people. Both liberals like Turgot and conservatives like Samuel Johnson observed that Americans’ ideas about taxation had everything to do with their attachment to slavery. In “Taxation No Tyranny,” Johnson argued that the right to tax had been “considered, by all mankind, as comprising the primary and essential condition of all political society, till it became disputed by those zealots of anarchy, who have denied, to the parliament of Britain the right of taxing the American colonies”—zealots who happened to be “drivers of negroes.”
The Constitution grants Congress the power “to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defence and general welfare,” except not “direct taxes,” unless levied in proportion to population, as assessments on states. The Constitutional Convention nearly fell apart over this. For purposes of representation, Southerners wanted their slaves counted as people. Northerners objected. By way of compromise, Pennsylvania’s Gouverneur Morris moved that “taxation shall be in proportion to Representation”: the South could have its slaves counted in exchange for an increased tax burden. After Southerners balked, Morris proposed “restraining the rule to direct taxation.” When the Massachusetts delegate Rufus King “asked what was the precise meaning of direct taxation? No one answd.”