Taxpayers in Revolt: Tax Resistance During the Great Depression by David T. Beito

Author:David T. Beito [David T. Beito]
Language: eng
Format: epub, pdf
ISBN: 978-1-61016-131-2
Publisher: The University of North Carolina Press
Published: 1989-11-06T16:00:00+00:00

Destructive versus Constructive Economy

CCCE’s identification with constructive economy may give a misleading picture of its origin. Those who participated in CCCE’s formation did not act from a crusading zeal to slash the size of government. Instead, they expected CCCE to stem or rechannel the tide of sentiment for economy then rising across the nation. As outlined by the Bond Buyer, CCCE emphasized protection of “the social and educational services of government from further destruction by indiscriminate budget slashing.”23

When CCCE’s supporters spoke of destructive economy, they had something quite specific in mind. According to Simeon Leland, the chairman of the Illinois State Tax Commission, advocates of destructive economy “demand the curtailment of governmental functions and expenditures not only in the hope of minimizing individual tax bills but also in the belief that the scope of public activities can be curtailed.... It is directed at the amount of expenditure rather than the services rendered.”24

CCCE pledged to fight across-the-board spending reductions as one of the most dangerous species of destructive economy. Edward Hopkinson, the chairman of the Investment Bankers’ Association’s Committee on State and Local Taxation, approvingly quoted a report that denounced “horizontal and ill-considered cuts in public expenditures made in response to blind pressure for wholesale reduction of budgets.” In an article for Municipality distributed in pamphlet form by CCCE, Harold Buttenheim denounced the popular and, in his opinion, “ruthless demand that 10, 15 or 25 per cent of the budget be slashed regardless of consequences.” William Anderson, a professor of political science at the University of Minnesota, seconded these sentiments. In a pamphlet for CCCE, he upbraided taxpayers’ groups that “oppose constructive changes and demand only that taxes be cut, and cut, and cut again.” Anderson condemned this approach because it placed government spending on education, health, and relief on the same low level of legitimacy as other government services. Defenders of destructive economy, Anderson complained, could only reiterate their single-minded “boast of every and any cut as a step in the right direction.”25

To Reed, Buttenheim, and Anderson, anyone who favored the placement of fixed limits on government expansion fell irrevocably into the camp of destructive economy. Thus they set themselves squarely against the recurrent demand of tax resisters that government deflate as fast as the private economy. Buttenheim noted the penchant of the “average citizen” for harping on the relationship between the tax burden and national income. Critics of high taxes, for example, often bolstered their case by pointing out that since 1890, taxes had risen twice as fast as the national income. Buttenheim, who did not deny the accuracy of this statistic, thought such figures “largely beside the point.” Turning this argument on its head, he asserted that there “is no proof for the assumption that governmental costs, if honestly and efficiently expended, ought not to increase in greater proportion than the population or the national income.”26

This distinction was at the core of the debate about destructive and constructive economy. For leaders of CCCE and NPYTC, constructive economy never entailed overall reductions or even fixed limitations on taxes and spending.

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