Trump’s ever-shifting tariff policies can appear chaotic. And, of course, they often are. In a nine-month span, his tariffs on China have gone from 10% to 145% to 50%, with Trump threatening to raise them back to 100%, before once again relenting. The President’s irritation at a television ad led him to raise tariffs on Canada, a policy he announced via social media post. And then, of course, there was the time the Administration declared tariffs on an island inhabited only by penguins.
But while these tariffs are capricious and nonsensical, they are nevertheless part of a coherent agenda. Arbitrary tariffs form a pattern with the administration’s attempted destruction—through mass firings, leadership turnover, and politicization—of an independent Internal Revenue Service. Trump is trying to replace the legislated system of taxation for revenue with a personalist system of state exactions for political domination.
Penguins aside, the implications of this agenda could hardly be more serious. The regularization of taxation is one of the most monumental achievements in political history. It is inseparable from the development of the rule of law and the earliest assertions that the legitimacy of government rests upon the consent of the governed. What is more, the effort to undermine the tax system strikes at the very capacity of a democratically elected government to act. Throughout U.S. history, oligarchs have fettered the tax power of the state to ensure that the government would be too feeble to rein in their power. The Trump Administration’s fiscal policies are the latest iteration of this long, anti-tax, anti-democratic tradition.
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That the power to tax should be constrained by a legislature has its roots as far back as the 1215 Magna Carta, which asserted that the king could not apply taxes as he chose. Instead, taxation required “the general consent of the realm,” to be obtained by summoning the various lords together. Although the original Magna Carta did not succeed in establishing this tax-authorizing institution, later kings made similar commitments, particularly when they were short of tax revenue. Eventually, England developed a system of councils to authorize tax impositions, and those councils evolved into the modern British Parliament.
One might expect that the requirement to receive the “consent of realm” would limit taxation. Quite the reverse. While the advent of representation constrained the personal authority of the king, it empowered the government as a whole. It was much easier to extract tax money from people who had some say in how the money was collected and how revenue was used. For centuries, England was far superior to France in its ability to raise taxes, a capacity that would underwrite centuries of English military victories.
Together, taxation and representation make a powerful government accountable to the public. Which is precisely the reason that would-be oligarchs hate an effective fiscal system: it makes a democratic government too powerful. As the sociologist Rudolf Goldscheid puts it, only the “poor State can calmly be allowed to fall into the hands of the people.” Nowhere has this been more apparent than in the history our own country, where the power to tax has been intertwined with the most important struggles over equal citizenship and democratic rule. As I detail in my new book, opponents of democracy—from slaveowners to Gilded Age industrialists to the contemporary Republican party—have consistently sought to hamstring the domestic revenue capacity of the government.
Southern slave holders understood that, even with suffrage limited to propertied white men, a democratic government might, as Patrick Henry put it, impose a “grievous and enormous tax” to “compel owners to emancipate their slaves.” So, in drafting the Constitution, they undermined both the representativeness of electoral institutions and the capacity of the federal revenue system. For one, slaveholders demanded a limit on the tax applied to the slave trade, the Constitution’s only provision setting a maximum federal tax level. The Constitution also enshrined the “three-fifths clause,” which infamously inflated Southern representation but also sharply limited the federal government’s power to apply direct taxes, since it required that that “direct Taxes shall be apportioned among the several States” according to the same ratio. (This limitation, it is worth noting, would be used by the Supreme Court to strike down the federal income tax in the late 19th century and today is being revived by conservatives, who argue it rules out the possibility of a federal wealth tax).
It was not just taxation by the national majority that Southern elites feared. Their state constitutions also capped taxes on slaves and gave disproportionate political representation to the slaveholder class. As one Virginian slaveholder argued at the state constitutional convention in 1829, these measures were necessary to prevent “a tax-law depriving the master of the power of holding his slave.” Slaveholders also ensured that there was no effective bureaucracy for tax assessment. In Georgia, for example, property holders simply asserted the value of their estate and, by law, tax officials could not dispute the owner’s estimate. This unsurprisingly made for very low estimates, while also explicitly putting the members of the “master” class above the rule of law.
Similarly, the white supremacist “Redeemers” that overthrew the multiracial democracies of the Reconstruction South undermined the capacity of the state to raise revenue. As Reconstruction governments imposed taxation to fund the construction of schools and make land available to freedmen, tax assessors became a primary target for the political violence of the Ku Klux Klan and other paramilitary groups. And once in power, the Redeemers slashed public spending and the taxes paid by the wealthy and corporations, while exacting onerous fees and fines from poor and black citizens. They also instituted supermajority requirements for tax increases, ensuring that, even if fair elections were held, the majority could not reverse their tax breaks.
Lest any Northern readers are starting to feel a sense of regional superiority, America’s anti-tax, anti-democratic tendency has not been limited to Southern oligarchs. In 1877, wealthy industrialists tried, and nearly succeeded, in overturning universal male suffrage in New York City. The “New York Taxpayers’ Association,” which represented, as The New York Times put it, “a notable demonstration of the solid wealth and respectability of the Metropolis,” proposed a state constitutional amendment that would have put all decisions concerning municipal taxation, spending, and debt in the hands of a “Board of Finance,” elected by those who met a high threshold of tax or rental payments. The amendment, which would have disenfranchised more than one-third of New York voters, was defeated by a concerted campaign of the city’s workingmen to defend their suffrage rights. But similar campaigns were attempted and sometimes succeeded in other Northern towns in this era.
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It is with this history in mind that we should think about the Trump Administration’s approach to tax administration. Time and again, opponents of democracy have sought to starve the state of revenue, to eliminate independent and neutral tax administration, and to take the power of the purse out of the hands of the American people. This year, the IRS has lost more than a quarter of its workforce, with particularly large losses in the portions of the agency that enforced tax rules for the very wealthiest Americans. Trump’s tariffs have distinctly limited revenue potential, economists agree, but revenue is not really the point. As with the Administration’s threats to the tax-exempt status of universities and philanthropic foundations, the tariff system is primarily a mechanism to punish the President’s perceived enemies. A further step down the road to a personalist system of finance has been the extracting of private donations for the destruction of the White House East Wing and payment of the troops.
Historically, in the dual strategy of fiscal debilitation and voter suppression, the tax component has always been the less obvious aspect. And that has had pernicious consequences. Even when Americans’ access to the ballot has expanded, anti-democratic tax limitations have survived. Jim Crow-era supermajority requirements on taxation continue to operate in some Southern states, meaning that even when most voters want more revenue for their schools or roads or hospitals, that revenue is unavailable. And while the 16th Amendment granted the federal government the authority to levy an income tax, the Constitutional limit on direct taxes discussed above remains in the Constitution, a convenient pretext for declaring federal wealth taxation unconstitutional.
If a future government manages to roll back the current administration’s efforts to consolidate power but fails to rebuild our national tax capacity, it will be a hollow victory. For a democracy to thrive, it must have the resources to act. Without taxation, there is no representation.
