The Free Press • 1998 • 242 pages • $25.00
James Woehlke is counsel and director of technical services for the New York State Society of Certified Public Accountants. Nikolaus Woehlke is a freelance writer from Poughkeepsie, New York.
IRS reform has been a hot topic in Washington recently. Last spring, more than 80 legislators attempted to repeal the Internal Revenue Code—unsuccessfully. Fundamental tax reform, the attempt to replace the graduated income tax with a flat tax or national sales tax, was a guiding theme for the newly elected reformist Republican Congress in 1995. Although the ponderous tax code is still very much alive, its future is in doubt.
In this legislative milieu, Charles Adams has unleashed his new book, Those Dirty Rotten Taxes, in which he shares his view of American history as a hotbed of tax revolt. The book tells of the injustice and oppression wreaked by tax collectors, and shows how tax avoidance and revolts have influenced our current tax system.
The book abounds in historical detail. For instance, the whiskey rebellion of 1794: farmers were unfairly taxed for producing whiskey, which for some was the only viable means of transporting their corn. The farmers quickly rebelled and refused to pay the tax. The new federal government, which had only recently been founded on, among other things, the principle of fair taxation, responded harshly by sending an entire army, led by President George Washington in general’s garb, to force the farmers into compliance.
Adams emphasizes the role taxes played in causing the Civil War. The Republican Party’s key plank in the 1860 election was the imposition of a severe tariff, a disguised subsidy to northern industry that would have hurt the agrarian southern economy. Adams argues that the concessions Lincoln offered the South on the issue of slavery—including a constitutional amendment that would have preserved the “peculiar institution”—prove that economic exploitation of the South was a more significant cause of the war than was slavery. His view of the War Between the States makes this a particularly thought-provoking counterweight to the typical U.S. history text, which presents slavery as the prime cause of the war.
American history includes another tax on whiskey that led to yet another whiskey insurrection, this one a small-scale war between the moonshiners and the revenuers that began shortly after the Civil War. (At this point, the reader has to wonder if Americans were characterized more for their hatred of taxes or their love of good whiskey!) This whiskey rebellion can be regarded as successful, since the government chose to repeal a tax that the people simply wouldn’t pay.
Adams then comes to the ugliest monster of them all, the income tax. He blames it for intruding into the private lives of citizens and chasing some of our most prosperous businessmen out of the country. For Adams, the IRS is an abomination. He reveals, for instance, that it paid agents according to how many foreclosures they caused. How quick the IRS has been to take cars, homes, or money, yet unbearably slow to fix its mistakes or the damage it caused to innocent people’s lives! Adams also discusses the high death tax and how it causes the elimination of over 90 percent of family businesses after the founders die.
Those Dirty Rotten Taxes makes a strong case for abandoning intrusive direct taxation to the greatest extent possible. Adams, like the Founders before him, prefers indirect taxation, such as a sales tax, and so is no fan of any of the various flat tax proposals.
Those Dirty Rotten Taxes is not a rigorously documented book, unlike Adams’s previous work, For Good and Evil: The Impact of Taxes on the Course of Civilization. It is lighter, and at times prone to hyperbole. But its straightforward view of the ingrained American antipathy to taxation is exhilarating. There are lots of illustrations and political cartoons, and the writing is engaging and easily understood. We highly recommend this book to anyone interested in taxes, history, or government.