Taxpayers in Revolt: Tax Resistance during the Great Depression

Taxpayers in Revolt: Tax Resistance during the Great Depression

Taxpayers in Revolt: Tax Resistance during the Great Depression

Taxpayers in Revolt: Tax Resistance during the Great Depression

Excerpt

Only in the past twenty years have historians, such as James Patterson, begun to cast more discerning eyes on taxation policy during the 1920s. Even now, the famed Coolidge tax cuts in the later part of the decade stand at center stage in the debate. The preoccupation with Coolidge's taxation reduction policy as the touchstone of the "new era" has unfortunately obscured the enormous tax increases that took place at the local level. Per capita tax collections for all levels of government rose from $68.28 in 1922 to $80.30 in 1929. Because economic growth kept pace with tax increases, the tax burden as a percentage of the national income remained fairly steady, falling slightly from 12.1 in 1920 to 11.6 in 1929.

A closer examination reveals that federal and state/local taxing authorities embarked on markedly divergent paths during the 1920s. In 1920, local taxes accounted for 3.3 percent of the national income and state taxes for .83 percent. By 1929, these percentages stood at 5.4 and 1.9 respectively. Meanwhile, federal tax collections actually fell as a percentage of the national income, from 7.9 in 1920 to 4.2 in 1929. Looking back from the vantage point of the early depression years, several commentators in both academia and the media recognized what had happened. In a 1932 article for the Forum , Jay Franklin challenged the image of the 1920s as an era of relief for the taxpayer. "For every penny saved in taxes at Washington," he pointed out, "five cents were added to his [the taxpayer's] taxes at the City Hall and State House."

Throughout the 1920s, the general property tax accounted for over 90 percent of taxes levied by all cities over 30,000 in population.

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