Gary Woodland Quotes

The original constitution allowed federal taxes on the states or on the people to be levied only proportional to the number of people in the state—a so called “head tax” of “poll tax.” This was a very regressive form of taxation since the rich could only be taxed the same amount as the poor even though they could afford much more and the poor could hardly afford anything at all. This amendment paved the way for the income tax where a percentage of income could now be taxed.

This is the most articulate historical statement of the modern conservative mantra regarding taxes. However, one change has taken place. The words “necessarily” and “often” tend to be left out of the more modern ideological statements. Mellon’s original statement has never really had any politicians or economists who disagreed. Politicians of all economic persuasions have generally accepted the Mellon statement but the extreme conservatives’ creed is that a lowering of taxes always produces more revenue and a tax increase will inevitably lead to greater tax revenue—a position which Mellon never took. Mellon however was very solicitous of the wealthy, felt the welfare of the nation depended on their prosperity, and was a strong advocate of what was later called ‘trickle down’ economics {628592}.

He turned out to be very wrong as there were a number of times in American history when there were tax rates in excess of 70 percent, and they were collected.

An income tax had been instituted during the Civil War but had lapsed. Existing taxes were therefore all excise or head taxes—very regressive. Some politicians began floating the idea of bringing back the Income Tax. But the New York Congressmen objected on the grounds that New York would pay a much higher proportion of the taxes, then their population represented. Under the Civil War, income tax, New York State had paid one/third of the entire national tax burden.

This quotation was very important because the most important economic principle of Republican ideology since the 1960s has been that tax cuts will produce economic growth and the converse: that tax increases will stifle economic growth. For 50 years the Republican nostrum for all economic problems has been to increase growth by cutting taxes and opposing all tax increases. However Leonhardt studied the data and results since 1987 and found that the Republican doctrine had been wrong. Economic growth plummeted when we had the largest tax cuts in the George W. Bush years and the greatest growth spurts were following the 1990 George W. Bush tax increase and the 1993 Bill Clinton tax cuts. When the data became public some Republicans took the view that taxes were just one of the factors determining economic growth and have been overwhelmed by other factors. Some Democrats argue that if this were really believed by Republicans, they would have favored these other factors more so than tax cuts when in fact tax cuts are always their nostrum.