Inscribed in stone over the entrance to the IRS building in Washington, D.C. are the ominous words of Oliver Wendell Holmes: “Taxes are what we pay for civilized society.” Yet the focus of the U.S. tax system has never been on distributive justice. As Sharon Nantell observes, “Since 1789, those with the least power have borne the heaviest burden of taxation in the United States.” Indeed, the deductions, capital gains preferences, and rate changes that benefit the 1% today have a long history in the U.S. By the end of World War I, Congress had discovered that slight changes in the structure of the new federal income tax regime could reap great quantities of revenue for the state and their favored elites. How can we understand the purpose and priorities of U.S. taxation, from Independence to industrialization to the country’s ascent to imperial superpowerdom? How has tax policy featured as a method of distribution (whether upward or downward), macroeconomic management, and even social control? What can a study of U.S. taxation reveal about U.S. political economy? Can taxation ever be “neutral,” “fair,” or “just”?
In this class, we will consider the history of U.S. tax law and policy, from excise taxes and tariff duties of the 19th Century to the current federal income tax, capital gains policies, and depreciation schedules. Focusing on the changes initiated in the 1970s, from Nixon’s break with 1944 Bretton Woods agreement to the Republican Party’s embrace of the doctrine that, as Dick Cheney put it, “deficits don’t matter” if they result from tax cuts, we will consider the contradictions of neoliberal public finance—a set of reforms that Melinda Cooper describes as “extravagance and austerity” —that led to the extraordinary growth of both public debt and social inequality. Considering the resurgence of supply-side economics under President Trump and the hollowing out of the larger American economy in favor of a vast, unproductive expansion of our financial sector, we will ask: what strategies reveal themselves in this history for the goals of redistribution, emancipation, and revolution?
