Public debates about taxes are often framed as technical questions about budgets, deficits, or economic growth. But in The Price of Democracy: The Revolutionary Power of Taxation, tax policy expert Vanessa Williamson argues that taxation has always been about something deeper: the distribution of political power in American democracy.
In the book, she notes that battles over taxation have often reflected deeper conflicts about race, wealth, and political inclusion. Powerful interests have repeatedly mobilized against taxes that would redistribute resources or expand public investment, turning tax policy into a central arena of political struggle.
What makes this book especially apt is its reminder that fiscal policy is never neutral. Decisions about who pays taxes – and how that revenue is used – can either strengthen democratic institutions or weaken them. By tracing these debates from the founding era to modern anti-tax movements, The Price of Democracy reveals how arguments about taxation have been arguments about who should contribute to society and who should benefit from collective investments.
In the interview that follows, Williamson (who also serves on ITEP’s Board of Directors) speaks about why tax politics has long been tied to questions of democratic inclusion, what history can teach us about today’s tax debates, and how tax policy shapes the future of American democracy. The interview has been edited for length and clarity.
You have devoted your career to writing about theories of taxation. You’ve written about what Americans believe about taxes and their importance to society. How does your new book, The Price of Democracy, continue your work? What is your book’s key contribution to the debate over taxation and the role of government?
The question that set me on the path to my new book was whether the extreme anti-tax rhetoric of the contemporary U.S. was really an American tradition. As I looked into American history, I found that it wasn’t.
A lot of the history we learned at school simply wasn’t accurate. For example, the Boston Tea Party is often used as evidence that Americans have always hated high taxes. But actually, when in 1773 Boston artisans and mechanics threw 90,000 pounds of tea into Boston Harbor, they were not protesting high taxes. They were protesting a corporate tax cut!
My new book tries to set the record straight. And an honest look at the history suggests that when we fight about taxes, it is not because Americans are intrinsically unwilling to pay their bills, but because we are really fighting about the breadth of our democracy: who should be included in “We the People.”
In the book you write, “…our federal government was designed by elites afraid that the American people had too much authority over the public purse.” How do elites today use their power to make tax policy work in their favor? What democratic rules do they use? How can this be changed?
Every time that we’ve seen expansions of suffrage, some elites have reacted with fear that the mass public cannot be trusted with the power to tax. For example, slaveholders were afraid that a government, even one elected only by propertied white men, would tax slavery out of existence. So, at the Constitutional Convention, they demanded both over-representation and limits on the federal government’s taxing power. One of the consequences of the compromises with slavery in the Constitution is the “direct tax” clause – a clause that was used to declare the federal income tax unconstitutional in the late 19th Century. It took decades of organizing to get our federal income tax back via constitutional amendment. And the direct tax clause would likely be the grounds on which a conservative Supreme Court would declare a wealth tax unconstitutional. So, the defenses for oligarchy against taxation run very deep in our constitutional fabric.
In terms of how that could be changed, there are three options.
One, you could defend a straightforward wealth tax in court. The current Supreme Court is, of course, extremely conservative, but that need not be how the court remains forever. A different court might decide differently; after all, the Supreme Court upheld the Civil War income tax for years before it shocked legal observers by reversing course to declare the 1894 tax unconstitutional.
Two, you could design taxes that get at consolidated wealth without running afoul of potential “direct tax” issues. There are a lot of potential policies that move in this direction.
Third, of course, you could do as the Populists and Progressives did and amend the Constitution. That’s a hard road, too —but it seemed impossible for the income tax, until it happened.
Throughout the book you write a lot about the role racism played in shaping the American tax regime. Are there any particular eras that stand out? How do they shape the current state of tax policy?
I think one era it would be marvelous for Americans to know more about is Radical Reconstruction, the brief period of multiracial democracy in the American South after the Civil War, when black men could vote and run for office.
The Reconstruction governments desperately needed tax revenue. The economy of the South was in ruins, and they were trying to build a public school system for the first time —not just for Black kids, but for white kids, too. Slaveholders had hated taxation so much that none of the Deep South states had a real public school system, even for white children, before the Civil War. And were profoundly committed to education, both for themselves and their children. So, the Reconstruction governments needed revenue to build those schools. As I argue in the book, the promise of multiracial democracy rested on the capacity of the states to raise tax revenue.
Of course, the promise of Reconstruction was betrayed. Multiracial democracy in the American South was overthrown, elections were rigged, Black voters were threatened by white supremacist paramilitary groups like the Red Shirts and the Ku Klux Klan. I talk a lot in the book about how those forces used anti-tax rhetoric to disguise their racism and violence and seem respectable to Northerners. And I talk a lot about how, as the Jim Crow regimes consolidated, they put in place strict limits on taxation, like supermajority requirements. These were intended to ensure that, if the Black and white working class ever managed to overcome voter suppression and win elections, they would still be barred from taxing wealth.
And many of those tax limitations are still in place —in fact, they spread to other states, not coincidentally, in the reaction to the successes of the Second Reconstruction, also known as the Civil Rights Era.
How does your book fit into today’s debates over tax policy and its role in democracy?
Well, we are in some ways replaying a history we’ve seen several times before, in which an anti-tax, anti-democratic movement has gained power and is attempting to ensure that they get to keep that power, that future elections are inconsequential.
But a thing that we do not see in the contemporary moment, and this is a serious problem from my perspective, is that we do not see an opposition that is making the positive case for government and taxation. We used to have a common narrative about how our government was a force for good and how taxpaying was something to be proud of. I fervently hope we find that faith again.
What advice do you have to policy advocates looking to reframe the debate over the role of taxation in American democracy?
The simple fact is this: there is no democracy without taxation. It is no coincidence that the strongest democracies, internationally, are also the highest-tax countries in the world. Free countries are high-tax countries.
There’s this myth that tyrants love taxes. They don’t. They love every form of revenue that isn’t taxes: fees and fines, bribes, gifts, the spoils of war. Taxes make leaders dependent upon their people, and authoritarians hate to be dependent upon their people.
The task of the future is rebuilding the American government, and that means rebuilding our tax capacity, so that our government is strong enough to be the democracy we need. We cannot afford a poor democracy.
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