Sunday, December 2, 2018
Washington Post op-ed: When Higher Taxes Brought Americans Together Instead of Dividing them, by Ajay Mehrotra (American Bar Foundation; Northwestern):
The uniting power of new taxation.
This month marks the centennial of the armistice that ended the First World War. Commentators have used this historic event to reflect on the many international legacies of the Great War. But the war also had a profound political impact domestically in the United States, especially on tax policy, and this legacy has been far less discussed.
World War I was a watershed event for the development of American taxation. It was during the relatively short 18 months of U.S. participation in the conflict that our national tax system was fundamentally transformed from an anemic and symbolic source of revenue to a fiscal workhorse — one that not only financed the war effort but also firmly established progressive taxation as a touchstone of American fiscal citizenship.
Recalling the forgotten tax legacy of World War I can remind us how taxes were once used by lawmakers to help bind, rather than divide, the nation. ...
We may have lost that sense of social solidarity today, but the World War I tax legacies remain with us. As we move into a new era of divided government — and soaring deficits — it may be useful to rethink how taxation can be used to pull us together rather than drive us apart. It may be instructive on the centennial of the armistice to reflect on how an earlier generation of Americans seized upon historic conditions to envision and implement dramatic tax reforms that remain with us.