Tax Analysts®Tax Analysts®

Article Archive

January 10, 2005
Profile in Tax History: John Nance Garner
Joseph J. Thorndike

Full Text Published by Tax AnalystsTM

John Nance Garner is best remembered for his assessment of the vice presidency. The office, he reportedly sneered in 1932, "isn't worth a pitcher of warm spit." The quote may be apocryphal, and even credulous historians think he referenced a different bodily fluid. But one thing is certain: Garner deserves a better epitaph. The plain-spoken Democrat from Uvalde, Texas, helped rescue his party from political oblivion during the Republican ascendancy of the 1920s. And he used tax policy to do it.

"Cactus Jack" Garner was born November 22, 1868, in Red River County, Texas. After a comfortable childhood, he ventured off to college at the University of Tennessee. But Garner was no scholar, and he soon returned home and began working in a local law office. Apprenticeship was a popular route to law practice in the late 19th century, and Garner soon passed the bar and launched his political career.

John Nance Garner; Library of Congress, Prints and Photographs Division, Theodor Horydczak Collection, Reproduction numbers LC-H814-T01-2413-001 DLC (facing left), LC-H814-T-2413-002-x DLC (back), LC-H814-T01-2413-001-x DLC (facing right) After brief stints as a county judge and state lawmaker, Garner won election to the House of Representatives in 1902. For years thereafter, he was a loyal soldier in the chamber's Democratic ranks. His constancy earned him a spot on the Ways and Means Committee, and by 1921 he was the ranking minority member. In 1929 his colleagues elected him House minority leader, and two years later, after Republicans lost the House, he became speaker.

Garner's route to power gave him a prominent voice in the tumultuous tax debates of the 1920s. Those years are best remembered for the tax cuts championed by Treasury Secretary Andrew Mellon. But Mellon's agenda met strong resistance on Capitol Hill, as Garner and his colleagues railed against plans to abolish the estate tax and slash income tax rates. Mellon's cuts, they claimed, would enrich the wealthy at the expense of everyone else. Congress should offer help to those who needed it most, Garner insisted: the middle class.

The Case for Higher Exemptions

In 1924 Garner launched a Democratic attack on the famous "Mellon Plan," insisting that the secretary's proposal was grossly lopsided. A coterie of economic giants would reap enormous benefits, Garner predicted, while the vast majority of Americans would get a relative pittance. Just six taxpayers, Garner told his colleagues, would split among themselves a tax cut of almost $10 million. Meanwhile, one million taxpayers in the lower brackets would be forced to share a cut of less than $1.3 million.1

As an alternative, Garner suggested a smaller rate cut coupled with a substantial increase in exemptions. Under his plan, Americans of modest means would have seen their income tax burden vanish. "Would any of you say, or would anyone on God's green earth except [current GOP representative and future Treasury secretary] Ogden Mills and Andrew Mellon say, that a married man is not entitled to an exemption of $3,000 before you start to tax him?" Garner asked his colleagues. "When you adopted the income tax amendment to the Constitution, you did it in order to tax the rich." Existing exemptions -- then set at $2,500 for families and $1,000 for individuals -- ignored that obvious intent.

The only reason to tax small incomes, Garner charged, was to destroy the income tax by undermining its popular appeal. "You want to break down the income tax system," he scolded GOP colleagues, "and as long as you have him [the taxpayer] paying taxes on an income of from two to three thousand dollars a year, he is dissatisfied with the law."2

Garner mustered a good head of steam in denouncing low exemptions, but he had a peculiar sense of what it meant to be rich in America. An exemption of $3,000 would almost certainly have left roughly 95 percent of the population beyond the taxman's grasp. The income tax was already narrow, affecting less than 10 percent of Americans. Garner's plan would have made it narrower still, restricting the levy to the very top echelon of American society.3

Garner's exemption hike did not survive partisan wrangling over the 1924 revenue bill. But neither did the idea disappear. Support ran deep among Democrats, and Mellon worried that it would soon resurface. In fact, the secretary took pains to attack the proposal. "If taxation is to be successful as a revenue producer in times of depression as well as in times of business prosperity," he told legislators in November 1925, "it must have a broad base as a foundation." Raising exemptions would rob the income tax of its stability and revenue productivity. While the economy continued to chug along, the effect of such a cut was minor. But when the business cycle turned, lawmakers would suddenly find themselves with a deeply inadequate revenue system. "From a revenue standpoint alone it is exceedingly dangerous to take out the lower tiers of this pyramid of taxation, since it is upon this broad base that a continuous source of revenue must rest," Mellon wrote.4

Despite Mellon's objections, Garner soon revived his plan for higher exemptions. This time his colleagues agreed. The Revenue Act of 1926 raised exemptions across the board, eliminating roughly a third of the nation's 7.3 million income tax payers from the rolls.5

The Sales Tax Rebellion of 1932

Garner's next major venture into tax policy came after his ascension to the speaker's chair. By 1932 federal revenues were in freefall, ravaged by the Depression and Garner's own soak-the-rich exemptions. With income among the wealthy falling faster and further than income overall, the top-heavy tax system proved fiscally anemic. Lawmakers began casting about for new ways to raise revenue.

The Treasury Department, now under the leadership of Secretary Ogden Mills, suggested a slew of tax increases, including lower exemptions for the income tax and many new excise levies on consumer goods. Mills did not recommend a sales tax, despite the popularity of the idea among his Republican colleagues. Instead he managed to convince House Democrats to advance that idea -- quite a feat, given the party's longstanding opposition to any form of general sales taxation.

But Democrats, now in the congressional majority, were eager to demonstrate their fiscal responsibility -- or at least their leaders were. Rank-and-file Democrats, on the other hand, retained a strong distaste for any sort of sales tax. And when party leaders insisted on making the sales tax part of their revenue bill, they found themselves with a rebellion on their hands.

Rep. Robert L. "Muley" Doughton, D-N.C, took the lead in challenging House leaders, drawing vocal support from liberal GOP Rep. Fiorello LaGuardia, N.Y. But Democrats of all stripes reported an avalanche of constituent mail opposing the new tax. And after a bitter floor debate and a series of disappointing procedural votes, Democratic leaders recognized that they -- and the sales tax -- were about to go down to humiliating defeat.

At that pivotal moment, Garner rose from the speaker's chair and descended to the House floor. He offered his colleagues a plea for cooperation, asking them to rally in the face of national emergency. Sounding almost like a Republican, Garner stressed the need for adequate revenue. Sound fiscal policy was a prerequisite for recovery, he insisted. With a dramatic flourish, he asked every member who supported the principle of a balanced budget to stand in their seats; no one remained seated.

Garner's speech broke with tradition, both institutional and personal. Speakers were generally expected to remain aloof from floor debate, joining the fray only under the most dire circumstances. And Garner himself preferred backroom negotiating to public posturing.

But Garner valued party solidarity above almost everything else. As he once observed wryly: "I have always done what I thought was best for my country, never varying unless I was advised that two- thirds of the Democrats were for a bill and then I voted for it."6 That devotion to party forced his hand in the 1932 legislative crisis.

Franklin D. Roosevelt and John Nance Garner in Uvalde, Texas, 09/27/1942; Franklin D. Roosevelt Library Public Domain Photographs, 1882 - 1962, Franklin D. Roosevelt Library, Hyde Park, NY. As it turned out, Garner's speech had the desired effect. Democrats came to internal agreement on a compromise tax bill, including numerous new excise duties but no general sales tax. And in a notable break with Garner's personal history, the bill also featured new, lower exemptions. The income tax, although still narrow, had returned to its broader base of the early 1920s.

At first, the sales tax rebellion tarnished Garner's reputation, raising doubts about his leadership. But his speech on the House floor won plaudits across the political spectrum. Editorials hailed Garner as a statesman, and even the Hoover White House had kind words for the speaker. Almost immediately, Garner was the front-runner for his party's presidential nomination. And with powerful support from newspaper publisher William Randolph Hearst -- who was, not incidentally, a leading champion of the sales tax -- Garner was definitely the man to beat.

But beat him they did. Franklin D. Roosevelt and his allies wrested the nomination from Garner's grasp, and the Texan soon found himself a reluctant candidate for vice president (pitchers of spit notwithstanding). As FDR's number two, he went on to play a vital but low-key role in the New Deal, advancing the Roosevelt agenda among old colleagues on Capitol Hill.

But FDR and Garner had a falling out during the president's second term. Uncomfortable with the president's agenda, Garner was appalled by some of FDR's more blatant grabs for power, including the court-packing proposal of 1937. Garner made a halfhearted stab at challenging Roosevelt for the 1940 nomination, but he soon retired to Texas. There he lived out the rest of his long life, dying in 1967 two weeks short of his 99th birthday.

Garner's Claim to Fame

The sales tax rebellion marked a turning point in Garner's career. Ultimately, however, his place in American fiscal history depends not on this public episode, but on Garner's more modest effort to boost tax exemptions in the 1920s. High exemptions were an article of faith among most Democrats, who preferred their income taxes narrow and steep. In seeking to advance that view, Garner fell squarely within the progressive tradition of American income taxation -- a tradition that Mellon challenged successfully over the course of the 1920s.

But Mellon, of course, lost the battle over exemptions. And when the Depression ravaged American society, it vindicated Mellon's warning that steep exemptions would imperil revenue stability. Deprived of a broad base, the income tax faltered in the face of adversity. Unwilling to make the income tax a middle-income burden, Democratic lawmakers turned to consumption taxes. Over the course of the 1930s, FDR embraced that decision, resisting efforts to broaden the income tax. Soak-the-rich taxation had a powerful political and ideological appeal for Democrats. In making the case for narrow income taxation, Garner had helped establish the party line on this critical issue of American public finance.


1 Congressional Record, 1924, 68th Congress, 1st Session, Vol. 65, pt. 3, 2439.

2 Id.

3 The unreliable nature of income estimates for the era before World War II makes it difficult to assess the precise effect of exemption hikes. But what figures we have suggest that $3,000 was quite a bit of money in 1924, and an exemption of that amount promised to keep the income tax very narrow. In 1929 fully 82 percent of individuals earned less than $3,000 annually. Figures for families are not available before 1935, when a $3,000 exemption would have relieved more than 90 percent of families of their income tax burden. For income statistics, see U.S. Bureau of the Census, Historical Statistics of the United States, Colonial Times to 1970, 299.

4 U.S. Treasury, Treasury Annual Report for 1925, 4-5.

5 Exemptions for single taxpayers increased from $1,000 to $1,500; married couples and heads of household saw their exemptions rise from $2,500 to $3,500.

6 Mark O. Hatfield, with the Senate Historical Office, Vice Presidents of the United States, 1789-1993 (Washington, DC: Government Printing Office, 1997), available at