Paul L. Caron

Friday, October 4, 2019

Weekly SSRN Tax Article Review And Roundup: Kleiman Reviews Kornhauser’s Conservative Women’s Groups And Tax Lobbying

This week, Ariel Jurow Kleiman (San Diego) reviews Conservative Women’s Groups & Tax Lobbying, Part 5 in Marjorie E. Kornhauser’s (Tulane) forthcoming book, American Voices in a Changing Democracy: Women, Lobbying, and Tax 1924–1936.

Stevenson“Women Start Meat Strike,” the 1935 Danville Morning News headline read.  Outraged over the rising price of meat, Detroit housewives boycotted butcher shops and ignited shared outrage among homemakers across the nation. Mary Zuk, whom the newspaper (gratuitously) describes as the “five-foot Polish American originator” of the strike and a “fiery, dark complexioned” woman, blamed the high prices in part on processing taxes levied under the Agricultural Adjustment Act (AAA). As Kornhauser explains in the fourth chapter of her forthcoming book, American Voices in a Changing Democracy, Zuk and her fellow protestors believed that butchers used these taxes as an excuse to gouge consumers. Zuk took her protest to Washington to demand repeal of the tax. Although Congress demurred, the Supreme Court later declared the tax unconstitutional.  What started as a local news headline gained national momentum, offering a colorful example of how women’s voices contributed to the burgeoning national conversation about taxes and government spending.

Kornhauser’s forthcoming book describes women’s role in the tax lobbying movement during the period from 1924-1936, a pivotal moment in the history of the federal income tax.  In this chapter, she focuses specifically on the involvement of conservative women’s groups in national tax lobbying efforts. As she explains, during this period most Americans did not pay income taxes, which were levied largely on the wealthy. Conservative efforts to build support for cutting taxing and spending, therefore, required convincing Americans that they had skin in the game. They did this by emphasizing the existence hidden taxes, like the meat processing taxes that Zuk so detested. Casting themselves as educators, conservative campaigners peddled a pared down version of the concept of tax incidence.  Although a tax may be imposed on businesses, they explained, only people can bear the ultimate economic burden of such taxes through higher prices or lower wages. And people did so, they argued, by paying higher prices for everyday consumer goods like meat. This educational messaging was a direct attack on Roosevelt’s “soak the rich” tax rhetoric.

Women played an important role in this conservative messaging by serving as a targeted demographic group. Because women typically managed household budgets, they knew well that an extra 10% excise or processing tax, if passed on to the consumer, could significantly impact a household’s purchasing power. Republican strategists sought to seize on this budgeting acumen to sway women voters away from Roosevelt and the higher taxes required by his New Deal policies.  

Women were movement leaders in their own regard as well.  Focusing on hidden taxes and profligate government spending, women formed political organizations and lobbying groups that delivered political speeches, distributed pamphlets about hidden taxes, and otherwise campaigned for government restraint. In one especially zany example, a group called the Minute Women of 1936 dressed in colonial garb and marched with horse-drawn buggies to the Massachusetts statehouse. Once there, they presented the governor with a resolution in opposition to President Roosevelt’s proposed redistributive taxes.

Kornhauser’s retelling underscores the fallacy of universality among “women’s issues.” As she explains, these conservative attacks on hidden taxes reflected a deeper desire to curb government spending and shrink the size of government. In the mid-1930s, this feared spending took the form of Roosevelt’s New Deal, which would create Aid to Families with Dependent Children (AFDC), a program providing much-need support to low-income families and especially single mothers. By advocating lower taxes to help women and families make ends meet, these conservative women’s groups worked in direct opposition to the interests of other, lower-income women. This dynamic continues today, with issues affecting women resisting simple ideological classification, particularly where socioeconomic divides create cross-cutting fault lines.

The “Tampon Tax” movement provides another interesting modern comparison. Feminist activists and policymakers have rallied together in opposition to sales taxes imposed on tampons and other lady products. Like their conservative foremothers, these women are, in a sense, tax protestors. However, unlike the tax protests Kornhauser highlights, tampon tax opponents focus mostly on equity issues arising from the disparate treatment of men’s-related or non-gendered hygiene products. Nonetheless, these modern feminist tax protesters share some DNA with the earlier movements.

It is also interesting to note a rhetorical pivot regarding inclusivity and taxation on the part of conservative and progressive messaging. In the 1920s and 1930s, conservative campaigns sought to convince the public that all people pay taxes, even low-income families who may bear no income tax. More recently, reminding the public that all people pay taxes has become a progressive move. Where before such a suggestion may have motivated greater control of government spending, today it is often used to remind the public that all people contribute to society, even if they have low income or are undocumented. This shift may reflect changing political needs and demographics, as well as the existence of public welfare benefits. Paying no taxes in the 1920s meant that one had income below the threshold; paying no taxes in 2019 might suggest (whether rightly or wrongly) that someone receives public benefits.

Kornhauser documents a fascinating episode in U.S. history, and particularly in the history of the modern income tax. Tax scholars and activists today can learn a great deal from such an account.

Here’s the rest of this week’s SSRN Tax Roundup:

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