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April 13, 1998
A Flawed History of American Tax Revolts
Joseph J. Thorndike

Full Text Published by Tax AnalystsTM

Reviewed by Joe Thorndike

[1] Americans need a good book on their national tax history. Sadly, this is not that book. Charles Adams, a prominent author of other works on the history of taxation, sets out to provide some context for current debates over tax reform and replacement. While he succeeds in highlighting several key periods in U.S. fiscal history, he fails to advance our understanding of this contentious and poorly understood subject. A work of advocacy rather than history, his book sheds more heat than light on a topic that badly needs an objective, dispassionate analysis.

[2] Adams begins with the promising observation that American history is replete with tax revolts. To understand current arguments over tax reform, he points out, Americans must first explore the nation's long history of tax resistance; only then can we appreciate the difficulties, challenges, and opportunities that face today's reformers. Adams's book is organized in loose chronological fashion, beginning with colonial revolts against British taxation and continuing through the 1997 tax bill. He identifies five distinct periods, each with its own strain of vigorous, sometimes militant tax resistance. Policymakers ignore such strains at their peril: "The time for rebellion is at hand," he warns, "if taxes are not greatly moderated."

[3] Few episodes in American history are more celebrated than colonial struggles over British taxation. Cries of "no taxation without representation" echo through American classrooms, and the Boston Tea Party enjoys a privileged position in the pantheon of American civic mythology. Adams offers a helpful overview of colonial and British tax arguments, giving special attention to the often confused and contradictory American distinction between internal and external taxes. As British leaders struggled to accommodate American objections, colonial leaders shifted their demands constantly, ultimately rejecting all British-imposed taxes. Adams presents these evolving sentiments with all their inconsistencies, stressing that Americans were fundamentally opposed to any taxes they did not impose upon themselves.

[4] Later, Adams examines tax policy under the Federalist party, giving pride of place to the famed Whiskey Rebellion. In recent years, scholars have treated the rebels with considerable sympathy, and Adams follows suit. Indeed, he champions the resisters as patriots, and credits them with the downfall of the Federalist party. In the process, he takes aim at one of the early Republic's most celebrated leaders, Alexander Hamilton. Often described as America's greatest Secretary of the Treasury (faint praise in the eyes of some cynics), Hamilton is generally viewed as the young nation's economic savior. His stringent fiscal policies helped restore American credit and solidify the fledgling government's precarious financial position. Adams, however, questions Hamilton's claim to greatness, attacking his tax policies as unfair and oppressive. "His appointment," he says, "has been called 'the right man, at the right time, in the right place,' but it's doubtful that the farmers on the western frontier in 1794 agreed, and today, after two hundred years, scholars are finally agreeing with the rebels." In fact, many scholars continue to celebrate Hamilton's accomplishments, and his historical reputation seems secure for the time being. Adams's argument, however, raises useful questions about the source of whiskey tax resistance.

[5] The endless 19th century debates over tariff policy feature prominently in Adams's dash through tax history, and he offers a vigorous case for southern proponents of a low tariff. Indeed, he offers kind words for the southern effort to "nullify" high tariff laws passed in the late 1820s and early 1830s. Southern political leaders consistently opposed steep tariffs, convinced that such levies were designed to benefit northern industrialists, not their agrarian neighbors in the South. Adams's sympathy for the southern tariff position is reasonable enough, but he gets carried away when describing the Civil War as a tax revolt. Although he carefully avoids assigning the tariff primary responsibility for the war, he insists that taxes were "at the heart and helm of the dispute."

[6] Adams harshly criticizes Lincoln for his unwillingness to compromise with the secessionist governments of the Confederacy, and he strongly implies that Lincoln initiated the war to safeguard federal tax revenues. "The question of civil war did not rest with the South," Adams contends, "but with Lincoln, when his promised invasion to collect taxes would occur." Such assertions strain credulity, ignoring evidence to the contrary and oversimplifying a complex historical event. Ascribing Lincoln's decision solely -- or even primarily -- to such mercenary concerns only serves to distort the historical record. Indeed, Adams's overwrought efforts to characterize the Civil War as a tax rebellion are some of the book's weakest sections.

[7] Federal campaigns against moonshiners provide Adams with his fourth tax rebellion, and he is filled with admiration for the resistors. Federal authorities, he insists, used excessive, often lethal, force in pursuing illegal liquor producers. Their actions set a precedent for heavy handed tax enforcement that remains with us to the present day. "The right to kill anybody who offends federal regulations is still with us," Adams states accusingly, "as Waco, Texas, and Ruby Ridge, Idaho, bear sad witness."

[8] Adams offers a remarkable apology for a particularly odious band of resistors in the late 19th century, the Ku Klux Klan. In a misplaced and badly flawed effort to distinguish the early post- Civil War Klan from its more modern descendants, he insists that "we can sympathize with the earlier Klan" and its resistance to northern authority. The harsh measures of radical Reconstruction, he suggests, helped foster the growth of resistance organizations. "In all ages, any such activities, often by conquering armies, have led to underground, secret societies. They existed in ancient Israel under Roman despotism. During the American Revolution there were the Sons of Liberty. They would exist later in Russia throughout the Tsarist and Communist dictatorships." Obviously inflammatory, such a comparison seems designed to be provocative. Certainly it minimizes the racist and violent history of the Klan.

[9] The last section of the book explores the history of the modern income tax, ending with a lengthy discussion of current proposals to revamp the federal tax system. Adam's emerges as a supporter of a broad-based federal consumption tax, perhaps in the form of a VAT. (Indeed, he dedicates the book to current Ways and Means Chair Bill Archer "for his determination to do what no modern nation has done -- tear the income tax out by its roots.")

[10] Overall, Adams's book is marred by its polemics and its single-minded effort to place taxation at the center of every historical event. He chooses subjects and evidence carefully, seeking to bolster his relentless argument against the income tax. He consistently derides the intellect and character of political officials, turning thoughtful, industrious leaders into corrupt, incompetent tyrants. Indeed, Adams is not one to let nuance or subtlety get in the way of a good argument. Time after time, he reduces complex historical processes -- the decline of the Federalist party, the coming of the Civil War, and the rise of the modern American state -- to simplistic political events, directed by corrupt politicians and resisted by noble patriots.

[11] "For centuries," Adams notes in his introduction, "taxation has been a scourge for mankind." Ultimately, that stridently anti-tax message is the book's most pervasive -- if not persuasive -- argument. Adams does a serious disservice to those who would seek to explore the history of federal taxation generally and the income tax specifically. There are many good reasons to seek fundamental tax reform, or even tax replacement, but one-sided, politically motivated histories don't advance that cause. After all the ink has dried, Adams's book tells us little about the complex but fascinating roots of American anti-tax ideology. All we can say for certain is that Adams is firmly in its grip.