Secrets Of The Tax Revolt

Tax cuts are such a pervasive feature of the American political landscape that the political establishment rarely questions them. Since 2001, Congress has abolished the tax on inherited wealth and passed a major income tax cut every year, including two of the three largest income tax cuts in American history despite a long drawn-out war and massive budget deficits. The Permanent Tax Revolt traces the origins of this anti-tax campaign to the 1970s, in particular, to the influence of grassroots tax rebellions as homeowners across the United States rallied to protest their local property taxes. Isaac William Martin advances the provocative new argument that the property tax revolt was not a conservative backlash against big government, but instead a defensive movement for government protection from the market. The tax privilege that the tax rebels were defending was in fact one of the largest government social programs in the postwar era. While the movement to defend homeowners' tax breaks drew much of its inspiration—and many of its early leaders—from the progressive movement for welfare rights, politicians on both sides of the aisle quickly learned that supporting big tax cuts was good politics. In time, American political institutions and the strategic choices made by the protesters ultimately channeled the movement toward the kind of tax relief favored by the political right, with dramatic consequences for American politics today.

Property tax revolts have occurred both in the United States and abroad. This book examines the causes and consequences of such revolts with a special focus on the California experience with Proposition 13. The work examines the consequences of property tax limitations for public finance with a detailed analysis of the tax system put into place in California. New theoretical approaches and new evidence from a comprehensive empirical study are used to highlight the equity and efficiency of property tax systems. Since property taxes are the primary source of revenue for local governments, the book compares and contrasts the experiences of several states with regard to the evolution of local government following property tax limitations. Finally, the book considers alternatives for reform and lessons to avoid future tax conflicts of this kind.

Daniel A. Smith exposes the truth about the American tax revolt. Contrary to conventional wisdom, recent ballot initiatives to limit state taxes have not been the result of a groundswell of public outrage; rather, they have been carefully orchestrated from the top down by professional tax crusaders: political entrepreneurs with their own mission. These faux populist initiatives--in contrast to genuine grassroots movements--involve minimal citizen participation. Instead, the tax crusaders hire public relations firms and use special interest groups to do the legwork and influence public opinion. Although they successfully tap into the pervasive anti-tax public mood by using populist rhetoric, these organizations serve corporate interests rather than groups of concerned neighbors. The author shows that direct democracy can, ironically, lead to diminished public involvement in government. Smith looks at the key players, following the trail of money and power in three important initiatives: Proposition 13 in California (1978), Proposition 2 1/2 in Massachusetts (1980), and Amendment 1 in Colorado (1992). He provides a thorough history of tax limitation movements in America, showing how direct democracy can be manipulated to subvert the democratic process and frustrate the public good.

As the oil shortages, inflation, and unemployment of the 1970s disrupted American lives and the Watergate scandal rocked the presidency, faith in the future of the nation and its leaders was severely damaged. This volume, which is the product of a unique collaboration of distinguished scholars from history and political science, offers a probing analysis of the causes, processes, and consequences of this erosion of faith in public solutions to our country's problems. At the beginning of the decade, a confident American public and its leaders still embraced the government activism that was the legacy of the New Deal. But grave doubts about the efficacy of public policy&—fueled by Watergate, Vietnam, stagflation, energy crises, and intensely controversial social policies&—undermined this public trust as the decade wore on, until by the end tax revolts were breaking out across the country. Describing government as the problem, not the solution, Ronald Reagan broke with tradition to set a political and policy agenda that has been dominant ever since. These experts from two disciplines bring their special insights to bear in dissecting the key developments of this decade that have transformed American politics in the last quarter of the century. The contributors are Ballard C. Campbell, Joseph Hinchliffe, J. David Hoeveler, Sidney M. Milkis, Alice O&’Connor, Paul J. Quirk. David Brian Robertson, and John T. Woolley. Like the other titles in Issues in Policy History, this book reprints a special issue of The Journal of Policy History.