Academic journal article Law and Contemporary Problems

The "Invisible Government" and Conservative Tax Lobbying 1935-1936

Academic journal article Law and Contemporary Problems

The "Invisible Government" and Conservative Tax Lobbying 1935-1936

Article excerpt

"[M]ost legislation is fathered not by parties but by minority groups, and these groups maintain their pressure without ceasing." (1)



Tax-collecting and lobbying may not be the oldest professions in the world, but both surely are strong competitors for next oldest. This universality--in both time and geography--attests to the essential roles taxation and lobbying play in all types of societies. Taxation's ubiquity occurs because, in the long run, it provides governments the surest stream of necessary revenues. Lobbying's universality derives from the human desire to obtain benefits from those in a position to bestow such favors. When the benefit directly affects a person's wallet--as taxation surely does--the incentive to lobby is immense.

In the United States, tax lobbying is nearly irresistible because both taxation and lobbying hold special places in American democracy and the American psyche. Anti-tax sentiment has deep-seated historic and mythic ties to American conceptions of democracy, liberty and patriotism. (2) The link began with cries of "No Taxation without Representation" at the nation's birth and remains strong today. Further strengthening the anti-tax and patriotism bond is the belief that taxes destroy federalism. Lowering taxes, in this view, starves the twin-headed beast of centralization and bureaucracy and prevents the federal government from stepping into unconstitutional state functions. Another link is a common belief that low taxation spurs that most American of traits and goals--individual enterprise and economic growth.

Lobbying, like taxation, has an American twist. Commentators as far back as Tocqueville have noted that Americans, more than other nationalities, organize politically because they hope to convince the people of their own views and then govern in "their name." (3) There are numerous ways to influence legislation: legal or illegal; open or hidden; direct--appeals to legislators--or indirect--through shaping public opinion. No matter its form, organized special interest activity--the nub of lobbying--is still at "the heart of what is most distinctive about democracy in America." (4)

Lobbying is so fundamental to American democracy that the First Amendment enshrines its core components--the ability to speak one's mind and associate with other similarly inclined individuals. In theory, interest group lobbying promotes the healthy marketplace of ideas necessary to a functioning democracy. For example, lobbying--at least theoretically--not only improves legislation by raising issues from various perspectives, but also ensures that everyone has the opportunity to be heard.

Lobbying, however, can also undermine democracy. Lobbyists can distort the legislative process by exerting undue influence. One of the most pernicious aspects of lobbying is that often neither legislators nor the public know they are being lobbied. They are unaware that they are presented with biased information or misinformation, under the guise of objective fact, or subtly guided by skillfully persuasive materials and speakers. Americans have long tried to limit this dangerous downside of lobbying through a variety of mechanisms such as restricting financial contributions to political action groups and regulating lobbyists. Congress has evidenced its ongoing concern in numerous investigations of lobbying and through repeated legislative attempts to regulate lobbyists and restrict political financial contributions. (5)

Taxation provides fertile ground for lobbying. Tocqueville confirmed this when he used the contentious tariffs in the 1830s as an example of his belief that "the liberty of association for political purposes is unbounded" in this country. (6) Earlier, in Federalist Paper No. 10 James Madison commented that "there is, perhaps, no legislative act in which greater opportunity and temptation are given to a predominant party to trample on the rules of justice [than in taxation]. …

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