Taxation is in our DNA
The legacy of the debate between Anti- Federalist (AF) and Federalist in contemporary politics is vibrant, even though it may not seem so obvious.
For example, On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act (TCJA). A Republican party triumph, the act cut individual income taxes, doubles the standard deduction, and eliminates personal exemptions. The act also cut the corporate tax rate from 35% to 21% beginning in 2018.
If viewed in the lens of the AF, this would be a major victory. If viewed in the lens of a Federalist, this would be a defeat. Federalists pushed for national authority over the power to tax, in addition to state proposals. Anti-Federalists objected to federal authority to tax, feeling the power would be illiberally abused.
AF’s who were supporters and staunch followers of the Articles of Confederation(AOC) did not want there to be taxes period. They purposefully designed the Confederation for it not be able to have any source of independent revenue, thus without the power to issue taxes, the Confederation was relying on funding from the states and their local enterprises to operate the Confederation. The AF’s believed the rule of law would bring political stability and by following the Declaration of Independence and the AOC, self-government would be able to be properly executed without a ruling authority. Brutus in Anti Federalist 32 believed that “one single government” with no terms that are definite in taxation would force local industrious communities to be “eat[en] up”. Brutus and AF’s alike were worried, rightfully so, that taxation by the union would lead to a passing of “vast number of laws, which may affect the personal rights of the citizens of the states and expose their property to fines and confiscations”.
The concern of a large government with overarching taxation powers is still the main pathos used to conjure up today’s modern Republican Party policy. The Republicans believed that the TCJA would directly benefit the middle class, specifically those who think that fewer taxes are good for individual freedom. They also rationalized giving tax breaks to the corporations in hopes more money would be stimulated locally, just like AF’s believed that the union should not be able to tax state enterprises in order for the economy to operate without stranglehold. The Republican Tax Cut increases the deficit by $1 trillion over the next 10 years according to the Joint Committee on Taxation and will decrease the revenue needed to address long-term fiscal shortfalls. Data from the US Treasury Department with analysis from Bloomberg shows in 2018 tax receipts adjusted for inflation, were down by 2.8% as federal spending rose by 1.9%.
This goes to show, the spirit and legacy of AF’s are alive within our modern tax debate, Republicans just like AF, oppose large taxations and look to provide their local enterprises with more spending stimulus by lowering or abolishing taxation.
A Federalist view on the TCJA would be negative. According to Hamilton in Federalist 12, he proposed the union must be able to raise sums “by direct taxation” hinting at the fact that the State treasuries under the AOC have been merely empty and unable to force states to pay. Hamilton also mentions that taxes are needed so “valuable resource[s] can be best adapted to our political welfare” and in Federalist 35 writes that “collecting import and export taxes” will not be enough to guarantee the stimulation of a healthy national economy. Furthermore, Hamilton Federalist 30 argues that without taxation as a source of revenue the government “half supplie[d] and always necessitous” will be a global laughing stock and won’t be able to undertake any “liberal or enlarged plans of public good”. The modern Democrats just like the Federalists, believe that appropriate taxation whether it be through corporate or income tax benefits the countries overall population by providing goods and services such as Medicaid and Social Security. The recent passing of the TCJA has already propelled many Democrats to begin proposing their own tax schemes, primarily focused on taxing the ultra wealthy in an attempt to curb the cynical citizen's skepticism that taxation is only for the middle class.
Democrats views on tax policy have been guided by the legacy of the Federalists, who believed that raising tax revenue for government spending, in turn, stimulates the economies and the welfare of the United States citizen.
It is without a doubt that the modern contemporary issues of taxation come from the same debate AF’s and Federalists had at the beginning of this country. The two main schools of thoughts on taxation boiled over who has the authority over the power to tax and if that authority would be illiberally abused. As the United States began to grow post signing of the constitution, the taxation debate only became more of a sticking point between interests groups and frustrated citizens.
