Donald Trump’s tariff policy maneuvers this have made it clear that we live in a country where a single man can impose or suspend taxes at will. Trump has, with little more than social media posts and various strokes of a pen, hiked federal sales taxes on imports (i.e., tariffs) with apparently no limit on the size of these taxes or to which goods they are applied. This concentration of power in the hands of a single politician would be shocking to an Americans from the early republic or the nineteenth century when Congress jealously guarded its control over the so-called “power of the purse.”
There once was a time when Americans took seriously the text of the US Constitution which reads in Article I, section 7 that “All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.”
Over time, though, Congress gradually abandoned its control over tax policy, even though the Supreme Court had ruled in 1825 that Congress could not delegate its core powers—which surely includes the levying of taxes—to some other branch of government. Like so many other unfortunate developments the history of American politics, the president’s modern-day ability to impose unilateral tax policy without the consent of Congress is primarily a twentieth-century innovation. These powers accelerated after 1913 when Congress became more interested in the income tax, and more reliant on income-tax revenue. Not surprisingly, things got worse under Franklin Roosevelt with the Reciprocal Trade Agreements Act which granted the president the power to negotiate trade agreements.
By the 1970s, the idea that Congress ought to control tax policy was all but dead, as under the guise of ensuring “fair” trade, Congress ceded even more of its control of tax policy to the White House.
This, of course, is a great victory for the executive state, which can impose or repeal import taxes at will, allowing the president to reward industries he likes and punish industries he doesn’t like. Knowing that his tax policies could cause large swings in the securities markets, the president could also reward friends by providing them with inside information about the timing of tax changes allowing friends of the president to buy and sell at just the right time.
Indeed, the fact that unilateral control over tax policy provides enormous personal and political advantages to political executives is a primarily reason behind the Constitution’s granting of tax power exclusively to the Congress.
After all, in the 1780s, the United States had recently emerged from a war that was partly over whether or not a chief executive could impose tax policy without the check of external assemblies representing those affected by the tax.
That is, for the Americans, the revolution was in many ways an extension and continuation of the fight between the commons in Parliament on one side, and the crown on the other. Most of the more educated revolutionaries were well aware that the English Parliament had spent centuries fighting for control over the monarch’s tax powers so as to limit executive power. Monarchs were ever thirsty for new tax revenue to wage wars and to reward friends to helped the monarch build a stronger state. Key in limiting this power was Parliament’s efforts to assert power over taxes.
Nor was this struggle even limited just to England. Throughout Europe, taxpayers attempted to put in place legislative institutions that could stand in the way of the executive’s tax increases. Thus historian A.R. Myers concluded:
Almost everywhere in Latin Christendom, the principle was, at one time or another, accepted by the rulers, that apart from the normal revenues of the prince, no taxes could be imposed without the consent of Parliament. . . . By using their power of the purse, [the Parliaments] often influenced the ruler’s policy, policies especially restraining them from military adventures.
Historian Ralph Raico notes that it is significant that these legislative assemblies, of which the English Parliament was only one, represented a “democracy of the taxpayers.” The main purpose of these institutions was to put obstacles between executives—usually, but not necessarily, kings—and the wealth of the taxpayers that might be plundered via taxation.
This is why, when the nobles of England finally forced Bad King John to sign Magna Carta, it contained a provision stating: ““No scutage nor aid [i.e., taxes] shall be imposed on our kingdom unless by common counsel of our kingdom.” “Common counsel” meant the approval of the nobles, the church, and other groups who had enough property that the king would bother trying to tax it.
Even in Spain, where today’s popular opinion assumes the kings ruled as despots under the old regimes, historian Joseph O’Callaghan reminds us that— “most governments in the Old Regime had limited power to raise taxes. … The realm of Philip II was not the autocracy that is sometimes imagined.” This was thanks to a network of representative assemblies representing the church, the nobility, and the growing class of “middle class” or “bourgeois” taxpayers of the cities.
This battle over taxation across Western Europe, and especially as manifested in England, was very much on the minds of the American revolutionaries. The seventeenth-century fight against absolutism in England, manifested in the Stuarts who would have abolished Parliament if given the opportunity, was foundational to the thinking of American republicanism which sought to put into practice the lessons of the old battles of Parliament against the executive.
How remarkable it is, then, that today’s conservatives—at least the ones who call themselves MAGA—are so enthusiastically committed to handing over untrammeled power to the executive to impose taxes, abolish taxes, or otherwise exercise tax policy with virtually no need to even consult with the duly elected legislature. This way of thinking represents yet another capitulation to the centralizers of state power and the abandonment of the spirit of the American revolution.
Image Credit: Gage Skidmore.
.jpg){kind=link}