[Abridged] Presidential Histories 40.A) Reaganomics and the anti-tax movement, an interview with Michael Graetz
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Sep 16, 2024 Michael Graetz, a Professor Emeritus of Law and author of The Power to Destroy, dives into the evolution of America's tax landscape post-World War II. He discusses how Ronald Reagan and the rise of the anti-tax movement shattered the previous bipartisan consensus on taxation. Graetz also tackles the implications of Proposition 13, the Laffer Curve's myths, and the intense intra-Republican conflicts over tax policies. Lastly, he warns about the long-term fiscal consequences of low taxation and the growing federal debt impacting the future.
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Taxation Linked To Democratic Control
- 'No taxation without representation' ties taxation to democratic control rather than tax levels.
- The Constitution created federal taxing power because the Articles of Confederation left the government revenue-less.
War Drove The Income Tax's Expansion
- The income tax emerged as a wartime financing tool and shifted over time from taxing elites to taxing the masses.
- World War II transformed the income tax into a broad-based revenue source for modern federal government.
Prop 13 Sparked A National Anti-Tax Wave
- Proposition 13 in California (1978) cut property taxes and required supermajorities to raise taxes, inspiring nationwide limits.
- Ronald Reagan supported the movement as he prepared for national politics and the measure passed with strong voter approval.
