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Linda Upham-Bornstein, "'Mr. Taxpayer versus Mr. Tax Spender': Taxpayers’ Associations, Pocketbook Politics, and the Law during the Great Depression" (Temple UP, 2023)
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- [00:00]
A
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- [01:07]
B
Hello, and welcome to another episode on the New Books Network. I'm one of your hosts, Dr. Miranda Melcher, and today I have the pleasure of speaking with Dr. Linda Upham Borenstein about her book titled Mr. Taxpayer versus Mr. Tax, Taxpayers, Associations, Pocketbook, Politics and the Law during the Great Depression, published by Temple University Press in 2023. Now, the Great Depression happened in the US mostly, though in other countries too, is pretty well known. There's lots of aspects to it of just how hard it was for people to get through, but I think this aspect of it is actually really not very well known at all, which are people who come together in groups, taxpayers, associations, to protest against taxes, even in some cases, to not pay them at all. That's, I think, a bit of history we don't know as well. And yet it turns out, as we're going to discuss, I'm sure in this conversation, it's an idea that predates the Great Depression, but is really kind of at its peak at this point. And it's fascinating to understand kind of how people get together and what use the law is and how this relates to questions of economics and rights and taxes. So there's a whole lot for us to get into here. Linda, thank you so much for joining me on the podcast.
- [02:23]
C
Oh, and thank you so much, Miranda, for inviting me. Taxpayers Associations is not well known and a lot of people want to talk about taxes.
- [02:35]
B
Well, we are here today to have a conversation about it. So can you please start us off by introducing yourself a little bit and tell us why you decided to write this book. Like, why is looking at Taxpayers Associations during the Great Depression important for understanding US politics and law?
- [02:53]
C
Well, thank you. I have got my PhD later in life from the University of New Hampshire. And I have always been a bottom up person and grew up in a working class, lower middle class family. And so I've always been intrigued on how citizens effectuate change who are not part of the elite. Years and years ago, when we ended up relocating to a community in northern New Hampshire, which is a very conservative state, I heard a local Taxpayer association member on a radio broadcast say that public education is something we can no longer afford. And I was a mother with a young child, another one on the way, and was horrified to hear that they wanted to cut payment taxes to public schools. Luckily, the town did not support that. But it was something that keeps percolating to the fore, particularly in New Hampshire. And I was wondering what drove this. As a historian, I'm always curious as to why people act or respond a certain way. A few years later, I was helping my husband clean out the basement of his law firm, which was established in 1933, and I came across a collection of newspapers that his senior partner had edited during the Depression, and they were the Coast Guardian. And in that I found a reference of a case that he had taken representing the city, the citizens of this community, the residents of this community in a taxpayers lawsuit because the taxpayer had embezzled the money and they required it to support them because there was no safety net during the Depression. You had to go to the overseer of the poor and the insurance wouldn't kick in because of the good old boys club which was protecting the tax collector. It formed the basis of a subsequent article on the Berlin Farmer Labor Party. But what intrigued me was that this taxpayers association which brought this action, then launched a Farmer Labor Party effort, which is a very socialist left effort. And I always think of tax thought of Taxpayers association as being conservative right, no pay, no paying, no taxes effort, which was reinforced by the subsequent Tea party movement in 2009 and the rise of libertarians under people such as Rand Paul. And then of course to carry that forward into the modern day. So the Americans have always been prone to populist impulses in response to adversity. And I Just thought this was an under explored populist impulse. And yet it's something that we all do is, you know, two things in life for certain death and taxes. So I thought well, we need to pay more attention to the tax part.
- [06:31]
B
So that's always really interesting to kind of come across documents and go, hang on a second, what's going on here? Right. Like as you said, as historians, we always want to know about why people are doing or saying certain things. So not surprised that those impulses were twitching after finding things like that. So let's get into taxpayer associations and kind of generally organized movements against paying taxes. Obviously the book focuses on the Great Depression, but to what extent do we see these kinds of organized movements happening beforehand? If we look for the origins, when are we looking and why are they emerging at this point?
- [07:10]
C
They, they have always been a part of American history. Actually even the development of the Constitution was based on or given emphasis or energy from Shays rebellion in Massachusetts, which was former soldiers being forced to pay, losing their property, not being paid, assessed high taxes and rebelling, which is what the recognition that the Articles of Confederation had failed. So in many ways taxpayers associations or taxpayers efforts are grounded in American culture, society. And then of course the centrality of law in the Constitution is part our American democratic identity. So they kind of percolate to the top throughout American history, some at a much more potent level than others. Following Reconstruction, white nationalists who had been part of the Confederate movement were opposing the rise of the Reconstruction government and had engaged in taxpayers actions in the south to stop funding for the Reconstruction governments and to shift that to take those governments down. It's part of this localism in American politics. In the 1930s it was much like today's rebellion as people were being assessed at very high rates for taxes and they were losing jobs, they were losing homes. It was affecting them on a much larger scale. And so kind of learning from their history and learning again how taxes are central to. Taxes are central to American ident and law, that they began to coalesce into associations and come together to form these groups to fight the, the, these, these powers that were basically taking away their, their civic life and identity and kind of the power, the pocketbook politics that is so much a part of America.
- [10:01]
B
That's really interesting to understand kind of just how intertwined this is with US politics throughout its history. But of course the book does focus on the Great Depression for a reason. And that reason might seem like it's obvious, right. Great Depression sounds like a very bad economic time but of course, there were panics earlier in US Economic history. So let's make sure that we actually talk about it directly. Why was there increased resistance to paying taxes at the moment of the Great Depression, in particular?
- [10:30]
C
The Depression, as I guess one political scientist noted, made us tax conscious. The economy is basically collapsing when you look at the larger number taxes tax money had become. 12 was, prior to the depression, 12% of the gross national income in 29. But it started to. The burden was increasing to 20% of the income by 32. And the rise in taxes and the decline in income across the United States, where we have unemployment increasing to 23% of the population, meant that taxpayers could no longer afford to pay taxes during this time. And it impelled them, it drew them together in communities to, to, to find solutions to this, to find alternatives to this oppression and to maybe cast blame at the same time recognizing as in Berlin, that the elites, those who control the purse strings, were responsible for not providing a reduction or the relief needed to survive under this, this growing tax burden. It was basically the taxpayers basically groaning under this burden during this era. And it was described as, from many groups as being extremely heavy and unbearable and intolerable. They just could not, particularly in the rural communities, could no longer pay their taxes. As we look at the farming regions where the collapse of farms and so on, it just became unsustainable.
- [12:35]
B
All right, so then what were taxpayers associations trying to do about it? What, for example, did they want government policy to change?
- [12:44]
C
Well, it probably in some ways seems somewhat obvious, but they wanted. Prior to this, there was no. We have a lot of government policies in place today as a result of this effort. Prior to this effort, there was a lot of cronyism, elitism and corruption in local and state and federal political entities. And as, again, the Berlin case kind of launched this awareness. We're aware of this earlier with the Boss Tweed movement and machine politics and so on, but they basically wanted to reform, to research and create educational programs and legislative programs that would begin to implement good government reform. They weren't basically looking to destroy local government by not paying taxes, but to reform local government and to create, make it accountable to the taxpayers, to stress that public officials should embrace reform activities, you know, budgets and expenses. Many of the items that we think today are. We just. Look, I'm on a local budget committee. These are things that we look at each quarter to see that the community is basically sticking within the budget guidelines. None of this existed then. So they believed in this kind of construction, constructive economy through education and good government reform. They also were engaging in political activities promoting taxpayer friendly candidates, pressuring public officials to cut spending, enacting statutory limits on property taxes because a lot of taxes in the United States and based on property taxes, probably the least effective tool was engaging in tax strikes. Although they were effective at kind of a final recourse when nothing else was working. But is indicative of what they many of these, because many of these are of the middle, lower middle class and working class. They have been following labor movement activities and are seeing the success of the labor movements in reforming workplace situations that they then transferred that to the government, the local governments and state governments. And so they saw that maybe there would be some effort to get people to listen to them if they engaged in tax strikes. And then of course litigation through taxpayers, lawsuits sometimes some places after this eliminated that ability. But New Hampshire, New York and others and Kentucky had in place laws and equity and so on that would allow taxpayers to bring lawsuits that would force government to control spending and restrain unlawful acts of nepotism or corruption, buying officials or whatnot, favoritism and so on.
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B
That's a whole bunch of different goals. And kind of one can imagine then that you know, well, they're not all going to be equally successful. As you mentioned, there's a lot of different things going on here. But I to link it to something you mentioned right at the beginning of our conversation, which is thinking of these taxpayers associations in terms of populist politics. How might we make the links between kind of the initiatives you just mentioned that they're trying to achieve and how we think of populist local politics more broadly?
- [17:10]
C
Ah, populist politics. Again, it's, it's, it's the American tradition. You people have studied populist movements, historians throughout American history. Of course the most common one is the actual populist party of the late 19th century. But they laid a lot of the foundation for kind of imbuting the American citizens with the idea that they can effectuate change. And so they, this taxpayers movement mobilizes people, the taxpayers against the elites or the tax spenders. Which is that whole concept is it is the tax benders who are the people in power or the elites who are engaging in the corruption or whatnot versus the people paying the money. And that's very kind of a populist impulse, the product of economic, political and social discontent, a bottom up effort. And they sought change as most populist efforts. They're rebelling against what they perceive to be some sort of elite or authoritative approach to hold them down. And so in this case, it's there. They need tax relief because they're lo so much so they engage in activism at different levels. The effort grows exponentially in this period from very few taxpayers organizations and 29 to thousands. Anywhere from 1200. There was one report I read that suggested there were 4,000. I couldn't find actual numbers, but I could find actual numbers for the. For the 1200. But the 4000, I don't know if that. It's hard because so many of them were local. So they weren't. Their numbers weren't recorded as effectively, but to basically to kind of get the elite to bend to their will and to. To control tax spending. They weren't against taxes, but they were against wasteful spending. And this kind of abuse of power that populists are known for responding against. Then and again. The Berlin Farmer Labor Party, the original one that kind of set me off in this direction is indicative of this movement. They're very much so. And they got a lot of mail from other groups around the country asking them how they did it. Some became very liberal groups and some became conservative. But what it boiled down to was local organizations realizing they had to find a solution for a crisis they were experiencing.
- [20:45]
B
Yeah, I think it's really key that point that it's not that the associations are against taxes per se. It's how they're meant to be used and trying to get the government officials to kind of do what they want. One of the tools that they use to achieve this is litigation. So can we talk about this? Because they seem to use it a lot. Why was this such a big deal?
- [21:05]
C
And litigation was probably the most successful on. On the smaller scale, certainly not on a larger. But it really is the idea. America, like the United States, is. So we are. We have formed law is central to our identity. And Americans often turn to the legal system for help or assistance in resolving issues of oppression or misuse of anything. So it's really not surprising that we would find that so many of them turn to the law where they can to compel the public officials to comply with these good government reforms and efforts. But lawsuits and turning to the law and going to courts is very much. And it's a common practice. It's an effective remedy that has been successful in basically American history because there was up and probably until more recently, a strong respect for the law in the courts. When the courts basically made a decision, you may not agree with it, but most people followed the decision, even if it had been decided against them. They were, they, they found that the law was, is what essentially shaped, they respected the law, they adhered to the, the court's decisions. So it was a tool that they used in order to, to effectuate this change to get the local governments to comply with their needs and desires to hold people accountable. You know, particularly in cases of embezzlement, we see that a lot where even today where tax collectors and small county tax collectors have maybe, maybe misrecorded or made some mistakes or kept some money aside because of their own financial issues, are taken to court for that and forced to repay that through some method and then also faced criminal charges. So it is not an unusual direction for American taxpayers associations to take where it is possible for them to engage in legal action. Again, not all cases, not all states allowed taxpayers actions or citizen citizen represent represented it to in a court of law. But where this was allowed, they did utilize it.
- [24:26]
B
Yeah, it was definitely a tool as demonstrated in the book that they use a lot. But they did try other things too. Some kind of more extreme measures like an entire strike on paying taxes. All when do we see that happening? Under what sorts of circumstances do the associations go from hey, let's lobby our local official to actually, let's use the courts to know actually we're going to go on strike.
- [24:50]
C
Right. And I think it's the exact progression you just mentioned. So it, yeah, let's lobby for change, which seems like the biggest and the easiest and less controversial one. And when that doesn't work, we're like, okay, we'll take them to court and hope that works. And when that doesn't work, then certainly the last alternative, the last tool available is to either threaten or to actually enact a tax strike. It's really the last the tool of last resort. And just like labor strikes were often the tool of last resort, thus tax strikes were the same. It is when all communication has broken down, no one's paying attention. Maybe even the court case did not decide in their favor. And for some reason, because we also have to remember that many states, unlike a lot of New England states, a lot of states elect judges. So when you elect judges that may be more favorable to the political entities in power, you may not get the decision that you need from the court. And so this is, you're forced into this final tool which is to take a tap to engage in a tax strike. They're urgent. It suggests the extreme need of the taxpayers. It's a direct action and it's basically turned to out of desperation. Nothing else is working. So let's just do this. There was a movie out many years ago called Network and the main character, Howard Beale, just is going crazy. And he comes out, he says, I'm mad as Helen, I'm not going to take it anymore. And that's kind of what this is. It's just like we, we've given up on everything else and we can't take it. And so we're gonna shut your money off. We're gonna just shut down and strike. They weren't really as, you know, strikes end up hurting both parties in the long run. So they're not. Not effective. It's more of a expression of deep, deep frustration. In some towns, it did get people to wake up and realize, oh, okay, maybe we need to go back to the table and work with these people. And some towns were very fearful of having their revenue stream turned off. It's probably what we see in the United States right now with the failure of Congress to approve the budget. This is a very large scale attempt. But it, it's basically, you're not listening to us. We're just shutting off your money. And it's, it's somewhat of a crisis as people are facing food shortages and, and lack of paychecks. I, you know, the goal is to try and get people back to the table and talk to each other. You know, they are, they're what you turn to when you're at your wit's end, I guess. And there's nothing else. The biggest one was in Chicago. It tended to be a slightly different. Take a slightly different shape, but it was not successful and did not give the results that Aret had hoped. That's the organization that led the tax, the strike in Chicago. David Beau writes pretty extensively about that. So it didn't go into Chicago as much because of his work on the Chicago tax strike. And I do refer people to his book. But it's understanding that tax strikes are the last resort. And again, I think you can pretty much look at what's happening in the United States today with the. What's going on with our, our government battle right now.
- [29:18]
B
Yeah, it is definitely similar in some ways. It is very clearly, as you said, the last resort. Does it ever work?
- [29:27]
C
Well, it does work in the sense that in small communities, it get it. It tends to be successful. In the very small communities. Bell county and some others had some successful attempts at getting to. It's a wake up call and people are like, oh dear, we don't have any revenues. We can't pay the Fire department, let's talk to them. And so it works on the small scale. It did not work in Chicago because in the larger scale, much like this effort, it impacts a much broader percentage of the population, some of whom don't necessarily agree and some of whom will be severely set back by these efforts or hurt. And so they don't really work. They do draw attention to the problem, which is probably the victory is that people, it does bring an awareness. So from that perspective, I guess, yes, they do work basically an extreme. It's a critical aspect basically of US Citizenship, but it's to make Americans to draw attention to an existing problem that they may not be paying attention to on their everyday life and the need to promote government economy, government efficiency and to reduce excessive spending and to reduce unnecessary taxes and to refashion the structures and operations. In those particular examples, they were partially successful in their kind of constructive economy goals. So yes, they did succeed in, in that, in, in awakening the powers, the government entities to the fact that they had to take action in a more profound way than they had been in the past.
- [31:41]
B
So that's really interesting then to think about kind of what success means and the ways in which we assess it. If we move beyond just thinking about tax strikes to kind of the goals of the taxpayers associations more broadly that you were telling us about earlier. Did they achieve any of their short term goals, any of their longer term goals? Like if you ask them, say five years after joining or 15 years after joining, do you think they'd say, yeah, never mind, that wasn't worth it? Or would they have things to point to?
- [32:11]
C
I think that, I think that they felt they had. I mean, we have a lot of tools in place today as a result of these efforts. So although they weren't effective, maybe they weren't, you know, some of the strikes weren't as effective. The movements were effective, particularly in the number of associations that proliferated. Proliferated in this area resulted in a lot of publications, a lot of research, a lot of municipal formations of municipal education entities to provide information to communities on how they may change and how they may improve. The Municipal Review is one of the publications that goes out to promote reform in government spending and in government actions and efficiency. We look at budgets today. All of these tools of accounting and budgets were put in place in large part because of these movements, because of this lack of accountability. One of the. If as I looked at these, so many of the. There were great stories of a town that had been, you know, hiring the officials to lifeguard or swimming pool which wasn't functioning, but they were paying money out for these lifeguards and yet there was no functioning swimming pool. So. But there was no accountability, there was no oversight, there was no committee recognizing that these expenditures were taking place. And so these association movements brought light to these, these abuses of their tax dollars or in many cases the embezzlement or the over and under taxing of different people or who favoritism and nepotism that was taking place within different communities from local to state to even federal efforts. As de Tocqueville observed years ago, this idea of those kind of coming together is how citizens engaged in self help to resist the tyranny of the majority or to control or correct abuses of the majority to prevent the despotism actually of a faction or the arbitrary power of a state to bring them into, to heal, to respond to the needs of the citizenry. So it was, they were as far as I'm concerned, very effective in bringing an awareness and a conscious effort to be cognizant of the costs of something and to find maybe alternatives to not just, you know, a lot of times they would spend, they would have, have. There was a need and they would hire their friend's company at astronomical prices instead of finding the, the, the, the, the best and most economically efficient process. So it was not, it was about cost, not the size and scope, but it was about efficiency and, and unnecessary spending on projects, on different projects or goals or needs of the community. So yes, those, those are still part of, it's part of. I think the fight today is people have become complacent with that because many of the taxpayers efforts were put in place. People trusted that they were there and started to not pay full attention again. And so these things started to wander from their goals to stray from their obligations. And this is what we're coming up against now is the importance of calling them back to their obligations to the citizens of the community. State or federal efforts to. It's a need that exists. There are modern efforts that are today very different, but there is almost a tension or a conflict today that suggests that the tax payer versus the tax spender is that there are some groups today that just don't want to pay any taxes at all and that they don't want government intrusion into their lives because they feel that government has expanded too far. So we have many competing forces today and particularly looking at trickle down economics and all of that and how that has impacted and shifted from the local individual from the bottom and shifted the efforts and the focus to the elites in the top, which we know does not really work.
- [38:34]
B
Yeah, there's so many ways in which this history of the Great Depression definitely has resonances to where the US is at now. And of course we can't predict the future. So I suppose we'll have to see what happens with all of this this. But what may you will you be working on while we wait for those developments? Are you continuing this angle of research or do you have any upcoming projects you want to give us a sneak preview of?
- [38:59]
C
Well, I am continuing it in that I've mentioned a couple times. There was a piece I left out of the book because I decided that needed to be streamed. It was falling into place as a depression error that was much an explored, deeply explored time in our history, but not one that looked at this particular aspect. I had started researching what is called the Citizens Union in New York, which was very much fighting the Tammany, the political machines of New York City and the abuse of the subsequent Tammany hall and the continuation of those machine politics that existed in the corruption in the city of New York. And so that there was this movement, this actually it was called the good Government movement that started about the turn of the 19th century, but really gained momentum about 1918-25. So I want to go back and revisit that and get that article out so that it's partly written, but I need to kind of put it in a better context. And then I'm also involved in, as I mentioned, I'm on our local budget committee. Taxes right now in New Hampshire are at a crisis point. The legislature is very much in my state, part of this libertarian in Tea Party vein and don't want to pay taxes at the same level or fund anything including public education. As a matter of fact, my university has just had severe cuts and the state's only paying about 3% of our money. So it's very much a state and local concern as they speak to people now about these issues and how we can maybe begin to make those changes. So continuing right now, I guess I unexpectedly have found myself more immersed in the issue of taxes and tax resistance. I had also totally off the issue of taxes. My nana During World War II, my grandmother is from the United Kingdom, but they had immigrated here just to Boston just before and During World War II, all the British naval ships that came into Boston, she would invite the officers and soldiers to her house and feed them and so on. And she had all these letters and I was asked by several people over the years to kind of work this into a story. And I moved her letters around for umpteen years and I, I'm trying to get myself back into looking at that. So that's just totally different tangent.
- [42:17]
B
Always fun to have multiple projects.
- [42:19]
C
Exactly, exactly. And it's fun to reconnect with that time in her life that was important to my mot and her family. So, and their stories of that. So it's, it's, it's fun to, to do that. I also have a third project that I've been working on that has to do with labor. I'm very much a bottom up historian. And the use of slave labor and the construction of government projects in the 1930s. 1830s. I'm sorry. And I had started that. There was another article I wrote years ago and I keep getting asked to address that too. So it's, it was a historian. We just have our hands in so many different pots. It's hard to sometimes just stay focused on one.
- [43:17]
B
Well, it certainly sounds like you're not going to get bored. And for anyone who wants to learn more about what we've been talking about while you pursue all of those projects, they can of course, read the book we've been discussing titled Mixture Mr. Taxpayer vs Mr. Tax, Taxpayers Associations, Pocketbook Politics and the Law during the Great Depression, published by Temple University Press in 2023. Linda, thank you so much for joining me on the podcast.
- [43:42]
C
Okay, well, thank you very much for this opportunity to share my work with others, as I obviously think it's a very important topic.
- [43:51]
B
Sam.