In his new book, law professor Michael Graetz argues that the modern anti-tax movement is the most significant US political trend of the past fifty years. He believes that this movement has had a profound impact on government, politics, and culture, driving and being influenced by attitudes about race and government. Graetz’s book, titled “The Power To Destroy: How the Anti-Tax Movement Hijacked America,” discusses how anti-tax conservatives have lowered taxes for high-income households and corporations while fundamentally changing government and politics.
The anti-taxers have largely been successful in their goals, with federal budget deficits ballooning and US tax rates remaining low. Despite public support for tax increases on the wealthy and corporations, Congress continues to cut taxes, with even many Democrats unwilling to raise them. President Biden has proposed tax increases on corporations and the wealthy but plans to maintain tax cuts for the majority of US households. Graetz, who has experience in senior tax roles in the US Treasury Department, explains in a straightforward manner how the anti-tax movement came to fruition and its implications in his new book.
Graetz traces the origins of the modern anti-tax movement to 1978, with the passing of Proposition 13 in California. This constitutional limit on property taxes was supported by a variety of groups with underlying concerns beyond tax issues, including opposition to immigration and school integration. Evangelical Christians also played a role in supporting Proposition 13 as a means to challenge IRS efforts to deny tax exemptions to segregated private schools. The integration of cultural and economic issues became central to the anti-tax agenda and was embraced by prominent figures such as Newt Gingrich, Grover Norquist, and Rush Limbaugh.
The anti-tax movement relies on an ideological troika that Graetz argues is analytically flawed yet politically potent. The belief that tax cuts will pay for themselves through economic growth generated by reducing taxes for high-income individuals, leading to an inevitable reduction in government size, has shaped the movement’s narrative. However, the “starve the beast” strategy failed to constrain government spending, as lawmakers opted to borrow money instead. Despite these flaws, the movement has amassed significant power through a combination of economic arguments and political motivations.
Although the anti-tax movement remains influential, there are signs of potential shifts in tax policy. The Tax Cuts and Jobs Act (TCJA) of 2017 provided tax cuts to a majority of Americans, but these cuts are set to expire at the end of 2025. With a federal budget deficit of $1.6 trillion, there is growing pressure to scale back the TCJA’s provisions. President Biden has proposed extending tax cuts for the majority of households while seeking increases for the ultra-wealthy and corporations. The upcoming 2024 election could have significant implications for the future of tax policy and the trajectory of the anti-tax movement.
Overall, Graetz’s book sheds light on the pervasive influence of the anti-tax movement on American politics and government. Despite the movement’s success in lowering taxes and reshaping policy debates, there are growing calls for reform and reevaluation of tax policies. The tension between tax cuts for the wealthy and corporations and the need for government revenue underscores the broader societal implications of the anti-tax movement. As the US navigates a shifting political landscape, the legacy of the anti-tax movement remains a central issue in the discourse on taxes and government.
