Taxpayers in Revolt: Tax Resistance During the Great Depression

The taxpayers’ revolt of the 1930s should not be dismissed as a fluke, aberration, or simple response to the stimulus of the depression. The United States not only originated out of a tax strike, but another tax strike—the Whiskey Rebellion of the 1790s—produced the new nation’s first serious crisis. Resistance to high taxes has appeared under a variety of economic and social conditions. The tax-protest campaigns of the 1970s, for example, were not born of depression or even deflated real estate values. Although the precipitating role of the depression was crucial, it tells only part of the story.

The tax resisters of the 1930s tapped into anti-big-government sentiment that predated the depression. They did not have to face the problem of creating a constituency out of whole cloth. Tax revolts in American society, including that of the 1930s, have often reflected, and continue to reflect, persistent suspicions of expansive government, entrenched bureaucracy, and domination of political institutions by experts.

Throughout the 1930s, politicians campaigning against high taxes and spending still fared well at the polls. Especially in 1932 and 1933, voters approved many tax-limitation laws at both the state and local levels. Tax strikes, and more often threats of tax strikes, became common fare from local taxpayers’, real estate, and homeowners’ organizations. Reliable estimates placed the number of taxpayers’ organizations at well over 1,000. One, which promoted a tax strike in Chicago, boasted a broad-based membership that included significant numbers of blue-collar workers. Many civic reformers and public officials readily acknowledged the appeal of tax rebellion for the masses and the average voter. These estimates came mostly from foes of tax reduction campaigns who were in a position to know. Almost daily, they fought in local and state political trenches against the onslaughts of the economaniacs.

One reason the persistence of these ideas during the depression era has been underrated is that historians have focused primarily on the period after 1933. There may well have been a shift in voter attitudes roughly corresponding to the onset of the New Deal in 1933. Here, some of the traditional explanations for the New Deal’s popularity still make a good deal of sense. The economic recovery after 1933 and Roosevelt’s charismatic leadership overwhelmed opponents of big government.

Certainly good-government reformers and other critics of the tax revolt exuded renewed confidence in the later months of 1933 and thereafter. They expressed nearly universal agreement that aggressive tax-reduction and anti-big-government convictions had begun to ebb—although by no means disappear. After 1933, tax limitations fared poorly and tax strikes even more so. A popular ideological swing toward government interventionism certainly provides part of the answer. In the face of their declining fortunes, tax resisters showed themselves unable or unwilling to formulate a concrete alternative. Their appeal to anti-big-government sentiment among voters rarely advanced beyond the superficial level. Moreover, subsidies to taxpayers—like the Home Owners’ Loan Corporation—helped take the edge off critiques of an expanded state.

Americans may have wanted change in 1932 but it does not perforce follow that they desired more government intervention. To voters, change and innovation entailed a wide range of possibilities. In the state houses, the description “innovator” could encompass progressive interventionists, like Philip La Follette of Wisconsin, or economizers, like Harry G. Leslie of Indiana. There was nothing new in the association of innovation with hard-nosed budget slashing. Grover Cleveland, for example, built his career as a champion of retrenchment and producer of unending vetoes. The proposition that depressions automatically facilitate movements to expand government needs to be reexamined. If the 1930s give us any clue, it seems equally true that depressions also stimulate powerful movements in the opposite direction.

In general, the tax resisters of the 1930s and their later anti-New Deal incarnations lacked a focused ideological program. Nevertheless, a common set of assumptions about the proper nature of government constantly reappeared in their writings and speeches. Merle Thorpe, John Pratt, Adam Schantz, and many others who participated in the tax revolt and anti-New Deal causes looked on the issue of the individual versus the paternalistic state as timeless and relevant to any society. They saw these questions as worthy of consideration on their own terms and not merely as alternative strategies to carry out shared capitalist goals.