April 12, 2013: Taxes in America: The Big Question

[As you finalize your taxes—not you, I know you’re done already, I mean everybody else—this week’s series will focus on some American moments and issues related to this controversial national theme. Leading up to a special weekend post that will frame that theme very differently!]

On three different AmericanStudies ways to start answering the million-dollar question about taxes in 21^st century America.

As I noted in this post on the Eisenhower Administration, during that period the marginal income tax rate for the highest bracket earners stood at 91%. No, that’s not a typo. There were certainly attempts by Congressional Republicans to lower that rate, and I’m sure it was not universally beloved; but neither were there widespread protests in the street, nor the rise of an entire movement dedicated to the idea that Americans are T(axed) E(enough) A(lready). That movement, instead, has come into existence in an era when tax rates are at historic lows, and when the possibility of raising the highest marginal rate from 36% to 39.5% (ie, to still more than 50 points less than that 1950s rate) is portrayed in many quarters as unbearably onerous.

So the big question is: why and how have our national narratives and debates over taxes shifted so completely? I don’t pretend to have a definitive answer, but here, briefly, are three different approaches an AmericanStudier might take to start developing one:

1)      Political: The most obvious starting point, but not a bad one. We could look for example to Ronald Reagan’s 1981 first inaugural address, and specifically his assertion that “government is not the solution to our problems; government is the problem.” Reagan was speaking of “the current crisis,” but it’s fair to say that the idea also formed a part of his coalition and governing philosophy overall. Such a political perspective would, it seems to me, necessarily lead to arguments for government revenues being as low as possible, among many other outcomes.

2)      Cultural: The “Southern strategy” theory comprises only one part of why Reagan ended up on that stage in 1981, but I believe it most definitely played a role. And along those lines, one significant national change from the 1950s to the 1970s would be an increased emphasis on cultural “others” (from an Anglo-American perspective) receiving government support—as evidenced by Reagan’s own “welfare queen” story and by the Boston busing protests, among many other moments. For some late 20^th century Americans, then, tax revenues might be seen as going toward far less desirable expenses than they had in earlier decades.

3)      The Media: Some of the more striking poll results of the last few years have had to do with taxes, and more exactly with the percentage of Americans who believe that their taxes have gone or are going up when in fact they have gone down. It seems clear to me that a principal culprit for such erroneous beliefs is the so-called (and accurately named) “right-wing echo chamber,” the alternative-reality narratives created by Fox News, talk radio, the blogosphere, and other media sources. Ironically, it’s in this era of strikingly low taxes that many Americans are being led to believe, by such sources as these, that their taxes are higher than ever—as clear an indictment of our current media climate as any I can think of.

So those are starting points for how I might analyze this national shift. One more, special post this weekend,

Ben

PS. What do you think?