In his new book, law professor Michael Graetz argues that the modern anti-tax movement is one of the most important U.S. political trends in the past fifty years. This movement overlaps with culture, race, and government attitudes, and has profoundly changed government and politics by lowering taxes, especially for high-income households and corporations. Graetz believes the ultimate goal of this movement was to alter the political landscape of the country.
Despite overwhelming public support for tax increases on the wealthy and corporations, the anti-tax conservatives have prevailed in the current debate. Budget deficits are growing, tax rates are low, and Social Security benefits are at risk. Even President Joe Biden, who has made tax increases part of his agenda, plans to continue the tax cuts implemented in the Tax Cuts and Jobs Act of 2017. Graetz, who has experience in tax roles at the US Treasury Department, highlights the impact of the anti-tax movement on the current political and economic climate.
Graetz traces the modern anti-tax movement back to 1978 when Californians adopted Proposition 13, which limited property taxes. This movement attracted support from various groups, including evangelical Christians, opponents of immigration and school integration, and other anti-government individuals. Over the years, figures like Newt Gingrich, Grover Norquist, Rush Limbaugh, and Donald Trump have used taxes as part of their broader anti-government narrative, making it a central focus of their political ideologies.
The arguments made by anti-tax conservatives are described by Graetz as analytically flawed but politically powerful. The belief that tax cuts would pay for themselves through economic growth mostly benefiting high-income individuals, and the idea that cutting taxes would shrink government have been the core tenets of this movement. However, this “starve the beast” approach has not resulted in reduced government spending, but rather an increase in borrowing, with both Republicans and Democrats complicit in excessive spending.
Despite the current ascendancy of the anti-tax movement, there are opportunities to reassess and potentially scale back the Tax Cuts and Jobs Act. With the federal budget deficit growing and the expiration of tax cuts in 2025, there is a chance to address the TCJA’s impact on the nation’s debt. While Biden and many congressional Democrats plan to extend tax cuts for the majority of U.S. households, there were close Senate votes on major tax increases for the ultra-wealthy and corporations, signaling a potential shift in the anti-tax movement’s grip on legislators.
As the 2024 election approaches, the future of tax policy and the anti-tax movement will be significant factors for voters to consider. With the expiration of TCJA tax cuts on the horizon, the debate over tax policies, deficits, and government spending will likely take center stage in the political arena. The outcomes of the upcoming election will shape the trajectory of tax policies in the United States and determine the influence of the anti-tax movement moving forward.
