The following paper suggests that tax revolt has played a siginificant part in American history, but has been largely ignored. I. Introduction For almost as long as man has been civilized, his government has exacted taxes from him. Every record of history from the Bible to ancient Egypt's Rosetta stone to modern economic texts has discussed the success or failure of tax policy. Love, war, and the tax collector have stood the test of time. Not only has the constancy of the tax collector been proven, but the consequences of his ever-present duties have left their mark on history. Government has exercised a right to tax in all civilized cultures and in many different political enviroments. In the United States, if the public questioned a tax and refused to pay; thus engaging in "tax revolt," government either changed tax policy in an effort to appease or resorted to violence. If government did appease revolters, it executed the concession by simply shifting the tax burden away from the rebelling class. Therefore, the revolt allayed, but total revenue protected. The policy of violence dictated revolters either honored their taxes, or risked retribution, even death. Theoretically, if U. S. representational government truly functioned, tax revolts could be avoided through voting procedures. However, improper tax policy or self-interested political agents have made the tax revolt a recurring reality. It has been postulated that several specific historical incidents with major political and cultural implications were motivated by tax rebellion. If tax rebellion has proven an essential factor in the political and economic history of the United States, there has been little recognition of the fact in popular history. For example, a popular history text used by American High Schools and Colleges gave only one page to the "no taxation without representation" explanation of the American Revolution. The text explained the Revolution more in the context of a group of enlightened, independent minded, and oppressed individuals struggling against an evil empire. The economic motivation behind specific actions in the struggle was left out, or addressed as a minor secondary reason. The Civil War was depicted as a struggle exclusively between abolitionists and those pro-slavery. The textbook never mentioned a bankrupting tariff placed on the South. Furthermore, the writers portrayed the Whiskey Rebellion as an isolated uprising of western Pennsylvania farmers, who managed to gain the attention of President George Washington, Secretary of the Treasury Alexander Hamilton, and eventually, 15,000 U.S. servicemen sent to put the revolters, armed largely with pitchforks, down. The Whiskey Tax Rebellion probably was much more widespread, and threatening to the Union, than this popular version of history portrayed. Why else would President George Washington personally lead a federal army against frontier farmers? The Tax Revolt of 1933, possibly responsible in part for the repeal of alcohol Prohibition; and the Tax Revolt of 1978, producer of California's Proposition 13, were completely ignored. Incidentally, the term "tax revolt" was never mentioned within the entire text. The above events were shapers of United States history. If tax rebellion was an essential ingredient in these events, further study by economic and political scientists is warranted. Specifically, tax theory can benefit from examination of these failed tax policies. Public Choice theory can especially be bettered by studying the behavior of government agents who's "bread and butter" were directly threatened by tax revolters. Therefore, alternative versions of the American Revolution, Whiskey Rebellion, and the Civil War should be presented with the incentives of tax rebellion included. Also, the scope and importance of the 1933 and 1978 tax revolts should be studied and recognized. Consideration of the tax measures resulting in the rebellious action of citizens; weighed with the reaction of political agents, hopefully, will cast a new light on tax policy, government behavior, and the importance of the "tax revolt" in American history. II. The American Revolution People must be governed in a manner agreeable to their temper and disposition. -Edmund Burke The outcome of the first tax revolt addressed guaranteed sovereignty for the United States- the War of Independence. The American Revolution provides example of a revolution motivated not by the oppression of human rights or extortion of the citizenry's wealth, but by bad tax policy. Consider, American colonists enjoyed the protection of the English empire, had ample job opportunity, suffered no military conscription; and the small peacetime tax that did exist, was earmarked for use solely within the colonies. Regardless, the colonists were not satisfied, and indeed, "no taxation without representation," played a definite role in the colonial uprising. Colonial resentment against the English tax policy did not reach a level of severity until the English, engaged in an expensive war with the French, began to look toward the untapped American colonies as an additional revenue source. Crown and Parliament proceeded to execute a series of taxes without establishing the representation the colonist sought. And with no official colonial representative in Parliament, colonists argued they truly did not enjoy the rights of Englishmen. Coupled with the presence of greedy tax collectors, and, eventually, British soldiers, the colonists' resentment turned to rebellion. The complete failure of British tax policy followed. Examining the behavior of both the British government, and the American colonists, regarding three certain taxes-the Sugar Tax, the Stamp Tax, and the Towsend Duties, can explain in more detail the causes behind the failure. The Sugar Tax of 1764 was the first and most successful tax levied by the English. Since the tax affected only a small number of colonists, specifically traders, dissent in the general population was minimized. What dissent did exist, was due to the enforcement of the tax, not the tax itself. Traders claimed regulatory paperwork interfered with business, and, more important, customs officers abused search and seizure powers to their personal gain. Although very limited, the trader's accusations foreshadowed a major problem with British tax policy- the crooked tax collector. In the minds of colonists, the title "tax collector" eventually became synonymous with "the enemy." The Sugar Tax did not cause much aggravation, but unfortunately, also did not raise the amount of revenue the Crown and Parliament needed. As a result, new taxes were to be formulated, but in the interim, a temporary tax was decided upon- The Stamp Tax of 1766. It was the Empire's first major mistake. When the Stamp Tax was initiated without formal colonial consent, it immediately spurred a widespread uprising, including mob violence and destruction of property. Also, a formal political protest was made through the calling together of the Stamp Act Congress, the first official united assemblage of colonial representatives in America. Parliament quickly responded to the uprising by trying to change the American tax structure to a system of external taxes deemed more acceptable by the colony's own Benjamin Franklin. Despite Franklin's approval, British intellectual Edmund Burke warned the new taxes too would fail. He reasoned the real problem behind American insurrection, the desire for formal colonial representation, still loomed. Burke's doubts were justified. These taxes, known as the Townsend Duties, forced the armed violence of the Revolutionary War. The Duties established a price-increasing tariff on all basic goods imported from England, and disallowed trade with any other country. Additionally, colonists were required to feed and quarter British troops in the colonies. Angry Americans refused to harbor the "redcoats," and boycotted the taxed British goods. Smuggling ensued. Like the customs officers enforcing the Sugar Act; the British Navy, and the Board of Commissioners of Customs, became notorious for abusing the resultant powers of search and seizure. The behavior so affected colonists, Franklin included it in his postwar list of twenty grievances in "Rules by which a Great Empire may be Reduced to a Small One." Crown and Parliament decided it could no longer tolerate the colonists' tax revolt. Likewise, colonists decided no longer could they tolerate a lack of representation in Parliament. Nor could the tolerate the presence of British tax collectors and soldiers. Hence, the Revolutionary War erupted. Before the Revolution, some American intellects wanted to try a policy of limited English sovereignty. England refused the notion. Neither did Mother England ever establish the colonial representation desired within Parliament. They continued a policy, although malleable, of taxation without representation. And with the implementation of each tax, colonists felt the mounting presence of the moral and financial dilemmas the tax collector represented, until finally, British tax policy utterly failed. Ironically, soon after winning its freedom, the United States government, like England, would use military force in an attempt to keep an unpopular tax policy intact. III. The Whiskey Rebellion To quell the disturbance in this country, and restore it to peace and government, the measures taken by the President, were in my opinion, the most prudent that could have been devised, and they seem to have been executed with a correspondent propriety and effect: The appointment of Commissioners, by shewing the awakened spirit of publick exertion gave a check to the spirit of revolution in this country, and to the progress of disorder in other parts of the Union. -From Judge Alexander Addison's 1794 letter to Henry Lee, commander and chief of the occupying federal forces in western Pennsylvania. The Whiskey Rebellion took place only 15 years after America declared independence. By 1794 President George Washington decided to personally lead a force of 15, 000 soldiers against an estimated 7,000 Pennsylvania frontier farmers. When Washington reached the counties in disfavor, the rebellion had already crumbled into nonexistence. It is believed by some that the cost of sending a force so immense actually cost the government more than the total receipts gained by the tax protested. The severity of the Federal government's reaction implied more may have been behind the rebellion than a few counties missing their payments. The common historical account explained the drastic federal action as an opportunity to prove itself as a "police power." It accomplished the demonstration, and made its willingness to defend its right to tax apparent. However, why did government choose a small rebellion in the western Pennsylvania frontier to make such an expensive point? Whiskey was the only valuable export for that part of the country, and collection there did meet resistance. Collectors were chastised, even tarred and feathered, and one had his house raised. But this was the full extent of the violence. Most accounts isolated the Whiskey Rebellion to those few Pennsylvania counties. But the Whiskey Excise Tax of 1791 did apply to all Americans, and whiskey was valued as a consumer good for sale and consumption to others besides Pennsylvanians. In fact, evidence has been uncovered substantiating the Whiskey Rebellion as more nationally widespread than once believed. The federal government may have used the Whiskey Rebellion to demonstrate its policing powers, but it probably chose the counties to its advantage in order to dissuade a national tax revolt. In truth, dissatisfaction with the new tax was widespread enough by November of 1791, that the House of Representatives ordered Secretary of the Treasury Alexander Hamilton to collect information concerning the uprising, and suggest possible amendments to make the tax more acceptable. Hamilton discovered parts of Virginia, North Carolina, Pennsylvania, South Carolina, and Kentucky, as the primary dissenting states. In other words, tax rebellion existed in both the South and the western frontier state of Pennsylvania. The South as a major actor in the Whiskey Rebellion has largely been overlooked. In reality, respect for Federal power was minimal within the area. Southern distillers, citizens, and legal courts, largely refused compliance or assistance toward the collection of the excise tax. Collectors, like in Pennsylvania, found themselves chastised, even tarred and feathered, but largely just ignored. Any enforcement of the tax policy was virtually nonexistent. A definite lack of both prosecutions and fines against whiskey violators existed in the court records for the period. Even the United States attorney for the district resigned from his office in 1792. For four years no one held the post with its dreaded responsibility of prosecuting "whiskey rebels." Supporters of the law tried to file civil suits against violators with little success, for Jurors and Judges refused to convict. Despite the same rebellious behavior and minor violence in the South as in Pennsylvania, and definite insurrection within the South's legal courts, Hamilton decided to concentrate his efforts against Pennsylvania. First he recommended using sanctions, and finally, direct military intervention. Perhaps concern over the rise in self created anti- Federalist Democratic Societies within the area prompted the special attention toward Pennsylvania. More likely, Hamilton chose Pennsylvania for strategic reasons. Dissent within the South, especially in Kentucky, was widespread enough, and the section of the country held enough coherence and strength, that federal invasion could have met with real resistance. Secession and rebellion of Southern states were legitimate fears. The allegiance of the area's militia was questionable, and the reaction to outside militia would definitely be one of disfavor. If full scale rebellion erupted in the South, and spilled over into the western states, it would have been impossible for the fledgling federal government to engage both fronts. If the above conditions did exist during the Whiskey Tax Rebellion, Washington and Hamilton's decision to invade western Pennsylvania does not seem so suspicious. The action demonstrated the federal government's ability to "police," and successfully protected the federal government's sovereignty over tax policy, at a minimum loss. If the Southern states had been confronted, the tax rebellion could have turned into war. The Federal government would not be ready for that type of action until 1861 and The Civil War. IV. The Civil War In the British House of Commons in 1862, William Forster said he believed it was generally recognized that slavery was the cause of the U.S. Civil War. He was answered from the House with cries, "No, no!" and "The tariff!"   The popular portrayal of the American Civil War has been one of abolitionism versus slavery, or state's rights related to the issue. However, the institution of slavery may not have been as important to Southern secession as taught in today's history. During the time, the question of federal power over the Union, especially in its taxation policy, and the policy's alleged economic exploitation of the South, may have been more the impetus. In 1860, no reason existed for the South to rebel against federal handling of the slavery issue. Legalized slavery had already been guaranteed by the Supreme Court, Congress, and President Lincoln. The Supreme Court protected legalized slavery through the Dred Scott decision(1857); Congress passed a specific amendment, with the President's approval, making slavery constitutional; and President Lincoln stated in his 1860 inaugural address, I have no purpose, directly or indirectly, to interfere with the institution of slavery in the states where it exists. I believe I have no lawful right to do so, and I have no inclination to do so. Lincoln in the same address also made clear his position on Southern secession. Lincoln's remarks as paraphrased by Charles Adams, ". . . no bloodshed or violence' against the seceding states; even the mails would be abandoned if they were not wanted. But taxes were another matter. Lincoln would 'collect the duties and imposts, but beyond what may be necessary for these objects, there will be no invasion, no using of force against or among the people anywhere.' And finally regarding the Emancipation Proclamation, passed two years into the war as a rallying response to Southern victories, Lincoln stated, Things had gone from bad to worse, until I felt we had reached the end of our rope on the plan we were pursuing; that we had about played our last card, and must change our tactics or lose the game. I now determined the adoption of the emancipation policy. The institution of slavery had been secured by the highest political and legal offices before the South fired on Fort Sumter. After the war, the federal government legalized segregation, and either consented to, or could not prevent other violations against the civil rights of blacks throughout the country, especially in the South. If the federal government did go to war solely to free black peoples, it either "sold out" its morality, or had engaged in war based on a futile cause. Government cannot force social change. But if the South fired on Fort Sumter motivated by tax rebellion and spite for a seemingly Northern aligned federal government, then federal government won on all accounts. There does exist evidence that Southerners raised arms against the State, not to defend the institution of slavery, or in reaction to the "offensive" notion that a northern politician could dictate law on a Southern issue, but, to free itself of Northern political domination and an oppressive import tax. John C. Calhoun, the leading prewar political spokesman for the South, presented in 1850 to the U.S. Senate three primary grievances against the North that could lead to secession; first, the South had been excluded from most of the new western territories, these new territories siding with the North could lead to a Northern political advantage; secondly; the growth of the Central government had grown beyond Constitutional limits; and finally, according to Calhoun, The North had adopted a system of revenue and disimbursements, in which an undue proportion of the burden of taxation has been imposed on the south, and an undue proportion of its proceeds appropriated to the North. . . The South as the great exporting portion of the Union has in reality paid vastly more than her due proportion of the revenue. Allegedly, Northern industrialists and their political friends had installed a schedule of price increasing import tariffs which forced Southerners to make an unpleasant choice. Either they purchased European goods, whose prices had been artificially raised to a price more than those of their Northern competitors, or Southerners could buy the relatively cheaper Northern products, but still at an inflated price due to the protected domestic market. Not only did the tariff eliminate European competition and protect northern industrialists, but if Southerners did choose to buy imported goods, the tax money was predominantly spent in the industrialized North rather than the agrarian South. The import tax policy and its economic consequences had been scorned by the South for quite some time. The "tariff of abomination," as Southerners named the import tariff of 1832, met real resistance almost three decades before the Civil War. A convention was held in South Carolina where Southerners invoked a doctrine, first established by Thomas Jefferson and James Madison, which allowed states to nullify federal laws they found unjust. The South claimed the "tariff of abomination" need no longer be charged by the federal government since its original purpose, to pay for the War of 1812, had been achieved. When South Carolina actually began to act on this doctrine, President Andrew Jackson reacted by bringing the country to the brink of civil war. The "Great Compromise of 1833" settled the issue by declaring South Carolina the right to reduce tax payment over a period of time until a level reached deemed fair by the state. Peace was maintained until Abraham Lincoln's presidential election in 1861. When Lincoln took office, he made good on a campaign promise by signing into law a new import tax, the Morrill Tariff. Not only did the new tariff undermine the Great Compromise, but proved to be the highest tariff in U.S. history. In response to the new law, South Carolina fired upon Fort Sumter, a hub for federal troops assigned to assist U.S. customs officers, and the Civil War began. A free South stood much to gain economically from its secession. Its constitution made illegal any kind of import tariff. The South reasoned that with duty free ports in Charleston, Savannah, and New Orleans, the ports could replace their northern counterparts as dominant trading hubs. Also a free Southern country was no longer forced to pay the tax increased price of European goods, or the protected and inflated Northern prices. The South stood to gain economically from both an increase in commerce, and a drop in the price of basic goods. Defending the South's secession, Jefferson Davis stated all the above in his inaugural address, along with being freed from the hordes of U.S. customs officials required to enforce such a tariff. The federal government won the Civil War. It may not have brought true freedom to black Americans, but it definitely won federal dominance over American politics. It circumvented the nullification process Jefferson and Madison had placed to check the power of central government, and successfully thwarted its primary nemesis from the Whiskey Rebellion, the Southern states. With the defeat of the Confederacy, there was no longer a section of the country united against the central government that posed a serious threat. The Civil War sent a message. Now the federal government could fight a large scale battle to preserve its dominance over political policy and win. The power to tax provided the funding for the federal government to exercise this dominance, and it would try to preserve that funding through any means necessary. Fortunately for the American citizen, the central government chose a less violent means to stifle the next two major tax revolts: the revolts of 1933 and 1978. V. The Tax Revolt of 1933 It is generally accepted as an established fact that all public employees are extravagant bureaucrats, time serving payrollers, and non-productive parasites whose mere existence is an unwarranted imposition on all long suffering taxpayers. It appears that all public officials therefore have forfeited their rights to be considered as human beings. They should be driven from the public trough and their salaries slashed ruthlessly.-from a published report by The Federation of State Leagues o Municipalities   The Tax Revolt of 1933 did not hold the characteristics of violent usurpers destroying property or a calling to arms by the U.S. Government. However, there existed the use of political manipulation, propaganda, and governmental redistribution of the tax burden, in defusing the revolt. Nineteen thirty three marked the use of this new approach against tax revolters in America. Government may have put away its fangs, but it was not going to sit on its haunches; such non-militant policy insured an acceptable amount of tax revenue, without the costs of war. The financial hardships of the Great Depression, compounded with an increasing tax burden, appeared to have been the motivators behind the Tax Revolt of 1933. During the Depression years, taxes as a percentage of national income almost doubled from 11.6% to 21.1%. Taxpayers responded by refusing payment. They also began to organize in opposition to Federal, State, and Local tax policy. For instance, from 1930 to 1933, tax delinquency rates in cities with populations over 50,000 increased from 10.1% to a record setting 26.3%; and an estimated three to four thousand tax revolt organizations existed by 1932. Property owners were especially hard hit by the Depression and the severe tax burden. In 1928 the property tax amounted to 93% of local tax revenue in cities with populations over thirty thousand. Feeling the effects of the local property tax combined with federal and state taxes, property owners began to perceive themselves responsible for a disproportionate portion of the tax burden. As a consequence, the Tax Revolt of 1933 was not directed solely toward federal tax policy, as in the previous revolts discussed, but also directed against local policy. The behavior of tax revolters and public servants in Chicago offered a prime example of local level tax revolt. Depression era Chicago property owners were responsible for 80% of the local tax bill. In addition, real estate values fell 38% from1928 to1930; new construction dropped 86%; foreclosures surged 457% from 1927 to 1931; and Chicago assessors were suspected of corruption. Herbert Simpson, a Northwestern Economics professor recalled, One could sit in the Board of Review and Board of Assessor's offices and see these men come in with their pockets bulging with crumpled tax bills of constituents to be 'fixed.' The upshot was the assessments fluctuated wildly, both within and between precincts. A legal order forcing the Chicago Board of Assessor to go public with its assessments validated Simpson's observations. Values deviated from 1 to 100% of the property's true resale value. Not surprising, investigators discovered some assessments politically motivated. For example, Police Detective Michael Grady's house assessed value stood at $500, while his next door neighbor's assessed value stood at $2,450. To avoid reassessment and public outrage, Mayor Bill Thompson ordered a tax holiday until after his primary. The holiday lasted from 1928 to 1930. In 1930, the Association of Real Estate Tax Payers (ARET) formed in Chicago as a grassroots organization to force reassessment and bring change to the corrupt and non-uniform Chicago tax policy. They encouraged citizens to pay only the amount of tax deemed fair for the services provided by the city. What is more important, ARET provided legal defense for revolters, for the organization planned to use the legal courts to achieve their purpose. Eventually, they would discover the legal branch did not necessarily put justice, or the desires of the constituency, before government sovereignty. Nonetheless, victory was achieved for a short while in the decision of Lilian Cesar's case for reassessment. County Judge Edmund Jarecki's decision ruled taxpayers should indeed only pay the amount of tax they deemed fair. He said of Chicago's property assessments, "Can it be maintained that an assessment so flagrant, so reeking with fraud can be held to good roll?" In response to the decision, Chicago's new mayor, Anton Cermak, instantly cut the city's budget 35.4%. Another consequence, Chicago politicians, and other tax dependents, decided to adopt a policy of media manipulation and political coercion to remedy the revolt. First, the pro-tax powers asked the media to refuse coverage to ARET. All the cities major papers, and most radio stations, complied, while allowing pro-taxers virtually unlimited access. The papers actually helped the anti-revolt movement by regularly running free anti-ARET stories and ads, and radio shows regularly featured anti strike public officials. The media tool worked so well, John M. Pratt's, spokesperson and leader of ARET, family was forced into hiding due to kidnaping threats. Politically, the Chicago government, and related public agents, provided many incentives to coerce revolters into payment. A law passed reading citizens with debts exceeding $10,000 would not only have their water turned off, but also disallowed the use of government property upon, under, and over streets and sidewalks. They also threatened fines, property seizure, and the revocation of strikers' rights in courts. Public schools even threatened to close. And finally, the legal courts turned against strikers. Strikers had not taken into account that the courts were also a member of the government body their strike affected. Haden Bell, the state's attorney at the time, declared point blank, "Such citizens [tax revolters] stand willfully opposed to government. They would not have much legal standing in court. It would be natural for government to favor those who are not opposed to government." Two subsequent decisions of the courts supported Bell's conclusion and proved primary factors in the revolt's downfall. First, the Supreme Court of Illinois overturned the Cesar decision. The reversed decision left revolters now legally unprotected against government retribution. Economist David Bieto surmised, This decision left the properties protected by the Jarecki ruling once again legally subject to sale and forfeiture. The court's opinions focused on the practicalities rather than the legalities of uniformity (in assessments). It maintained that a ruling for strict uniformity could be used by an unscrupulous assessor anywhere in Illinois to prevent government, both local and state, from functioning. The ruling underscored a problem that dogged ARET no end. When forced to choose between literal enforcement of the uniformity article or protecting the power of government, the courts invariably opted for the power of government.   The second legal blow came when Jarecki, the judge who made the original decision favoring strikers in the Cesar case, ruled to allow the selling of 56,000 properties belonging to "genuine strikers." Jarecki said of his decision, "tax crisis have been at the bottom of every revolution. . . A tax crisis is synonymous with oppression and if our situation goes to far, I'm afraid this will happen." Also included in the decision was a provision promising a 50% reduction of penalties for delinquents who voluntarily made partial payment on their debt. The media campaign along with the political and legal pressure successfully crumbled the Chicago tax revolt. With the revolt over, the local authorities passed legislation intended to protect themselves from the possibility of future revolts. The Skarda Act allowed any judge to appoint "receivers" for income producing tax- delinquent properties. The courts granted receivers the power to take charge of such properties and allocate a portion of its assets toward tax payment. The Graham Act required taxpayers to pay at least 75% of their taxes before legally being allowed to place an objection in court. Nationally, Federal, State, and Local governments followed a plan similar to that of Chicago's to end the revolt. Government launched a massive media campaign orchestrated by an organization named The National Pay Your Taxes Campaign (NPYTC). Along with using television, radio, and newspapers, the NPYTC published both the Campaign Manual, and Publicity Handbook. The publications were provided to all levels of government throughout the country. They covered in detail the organization and execution of the "Pay Your Taxes" strategy. The campaign primarily portrayed tax rebellion as unpatriotic and "destructive" to America, and if citizens were disgruntled, a more "constructive" means existed in tax reform rather than tax revolt. In addition to the media pressure, the national anti-revolt strategy included a unique financial motivator to quell the tax revolt. The Home Owner's Loan Corporation (HOLC) provided loans to tax delinquents at 5% interest and a 15-year pay back period. The reason being that easily obtained loans would entice debtors to pay up, and through the government financing, the delinquents not only revealed themselves, but became financially responsible to government. In other words, the government indirectly made itself landlord. When a Lehman Brother's survey questioned 106 city governments what they believed responsible for the tax revolt's decline in 1935, a majority cited the HOLC. In the legal sector, an agency known as the Public Works Association (PWA) provided legal assistance for local governments to circumvent tax limitation laws, and therefore meet eligibility for federal government subsidies. And of course debtors and revolters were legally prosecuted. The justice system put away tax offenders, but allowed fellow government agencies to supersede the law through legal loopholes. One ingredient unique to the national remedy for the tax revolt was the redistribution of the tax burden. Broadening the tax base would not only appease seemingly overburdened minorities, such as Chicago property owners, but also allow government additional sources of revenue. Therefore, the drop in revenue resultant from the tax strike and the Depression could be partially canceled out by increasing some previously discreet taxes, such as the sales tax, or initiating new taxes, such as the liquor tax. The anti-revolt strategy worked. By the end of the thirties, not only had federal taxes risen, but, state and local taxes managed to double! An interesting connection to the tax redistribution may have existed. If the connection true, the importance of the Tax Revolt of 1933 is made more significant to social, political, and economic history- especially in regard to Public Choice. Richard Bieto and Chetley Weise have suggested Repeal was at least partly enacted by the need to reinstate the liquor tax. Prior to the 1917 enaction of Prohibition, and the 1918 enaction of the income tax, the liquor tax had been the U.S. government's primary source of revenue. Repeal was enacted in 1933 shortly before the end of the tax revolt. The role of the reinstated liquor tax in government's redistribution policy could have been an essential motivator behind Repeal. The Depression proved hard times not just for citizens, but government too, primarily from low income tax returns and national tax rebellion. Government was not content to allow tax revenue to decline in accordance with the wealth of the nation, or because of citizens revolting against its tax policy. Therefore all levels of government worked to find ways to maximize revenue and allay the tax revolt. And rather than combat the demands of revolters by threat of armed violence, the government simply provided "incentives" to cooperate, controlled the media to try and convince Americans tax rebellion undesirable, or redistributed the tax burden away from the revolters. Government's reaction to the wishes of the constituency cannot be considered irrational if examined in the light of self-interest. The real wages of public employees increased 11.5% from 1929-1933. A pay raise was something fairly unusual for the Depression. VI. The Tax Revolt of 1978 In over 30 years of observing the political scene in California and the nation I have never witnessed a more brilliant campaign against great odds than yours in behalf of Proposition 13. Let us hope that California's message will be heard loud and clear in Washington as well as in states, counties, and cities across the nation. The issue is, as you well know, much bigger than property taxes. People everywhere want to reduce government spending, the burden of taxes, and the spiral of inflation which is the cruelest tax of all.- a letter to Howard Jarvis from former President Richard Nixon The most recent national tax revolt occurred during the inflation ridden years of the middle to late nineteen seventies. It too was remedied much the same way as the Tax Revolt of 1933. However, the anti-revolt tools of media, political coercion, and redistribution played significant roles in the strategy of all levels of government. Nationally, the revolt ended with the election of Ronald Reagan and his tax cutting promises. But the predominant effect of the rebellion was the production of tax limiting laws in several states. Between 1976 and 1980, 18 states passed laws limiting taxes and public sector spending, including California's Proposition 13. As Chicago was a prime example for studying tax revolt at the local level, so California provided the perfect example of revolt at the state level. Proposition 13 was a measure imposed by the citizens of California through direct referendum. The new law limited the property tax rate to a maximum of 1%, and limited future increases in assessed values by 2%. It also required a two-third vote of all state legislators for any increases in state tax rates, and a two-third vote of all registered citizens to allow any new taxes. The law completely banned any new taxes based on the value or sale of real property. Before Proposition 13, western housing prices for single family homes had increased 50% from 1976-78, compared to increases of 18%- 27% in other regions of the country. Also, California had amassed a budgetary surplus of $5 billion by 1978. Governor Jerry Brown was proud of the surplus, but unfortunately, he and the California state legislature could not agree on tax relief measures to appease a brewing tax revolt. Like Chicago, property owners believed themselves unfairly burdened by taxes. Howard Jarvis headed the grass roots property revolt that brought Proposition 13. He was supported by several real estate, conservative business, and agricultural groups. But primarily through direct mailers, talk shows, and the now well known slogan, "I'm mad as hell, and won't take it anymore," Jarvis collected over 1.2 million petition signatures. And at the polls, Proposition 13 passed in 1978 by a two to one margin with a record setting 67% voter turnout. The overwhelming victory of Proposition 13 confirmed the popularity it had held with California voters. Predictably, the state government still resisted 13's passage until the proposition's victory appeared imminent. Also predictably, Governor Jerry Brown was not alone in his opposition-most of state and local government officials, the League of Women Voters, the PTA, environmental and utility groups, and public employee unions, also objected to the measure. When Jarvis began to organize California's revolters behind Proposition 13, the anti-13 coalition likewise started a campaign against Jarvis' bill. Politically, the coalition introduced Proposition 8 to compete with 13   on the voting bill. Proposition eight proposed spending limits rather than 13's revenue cuts. The alternative provided only one fifth the relief to taxpayers of what 13 threatened, and would be in effect just one year. Besides providing the diversion of Proposition 8, the coalition used its influence to slander Howard Jarvis and attempted to coerce voters into opposition. For example, Pat Brown, former governor of California and father of Jerry Brown, sent a letter to Californian Republicans stating, "if I were a Communist and wanted to destroy this country, I would support the Jarvis amendment. Your fellow Republicans who waffle on it should be impeached." Governor Jerry Brown furthered the effort by offering a political deal to voters. He promised that if Proposition 13 did not pass, he would nullify the business inventory tax. Willie Brown, the Democratic Assemblyman from San Francisco, went so far to suggest that the California legislature should punish or reward California cities by dispersing State funds in accordance to the population's vote on 13. Comments were also made in the media by police officers, firefighters etc. such as, "if there's a robbery, call Jarvis," or, "if there's a fire call Jarvis." The coalition also publicly threatened the passage of Proposition 13 would result in the closure of the fire and police departments, and schools. It was even implied the "Hillside Strangler" mass murderer case would not have been solved if the investigation taken place after 13's passage. Howard Jarvis was soon placed under police protection because of the number of life threatening phone calls he received after the media blitz. A similar fate had occurred to his counterpart in the Chicago revolt of 1933, John Pratt. After Proposition 13 passed, the state surplus disappeared by 1980, a hiring freeze issued, summer school eliminated, highway spending reduced, and state growth curtailed. The budgets of hospitals, prisons, and veteran's homes remained unchanged, while police and fire protection budgets increased. Despite the public preferring cuts in welfare rather than in education, welfare also remained largely untouched. Most of the pre-Proposition 13 threats had proven foolhardy, but California legislatures could still not accept the desired reduction in government Proposition 13 represented. California initiated the tried and true policy of tax redistribution to offset the loss of revenue from Proposition 13. The state began to rely more on the sales and income tax. Also, user fees were adopted in the case of library and public land usage. New construction fees, sometimes as high as $3000, were mandated to offset the property tax reduction. And ironically, Californians ended up paying additional federal income tax because of the reduction in their property tax exemptions. Howard Jarvis had undeniably achieved the goal of relieving the tax burden from California property owners. But between tax redistribution and the newly issued fees, the state managed to successfully regain a substantial portion of its lost revenue. Many Californians were left bewildered whether or not Proposition 13 had actually succeeded in a real tax reduction. Unfortunately by 1982, 78% of Californians believed their state and local taxes higher than before passage of Proposition 13. Nationally, the anti-tax movement of the late seventies lead to the election of Ronald Reagan. When Ronald Reagan took office in 1980, Gallup polls indicated 71% of Americans believed the income tax to high. Reagan in fact used the revolt to his advantage by promising a 30% tax cut as a major selling point in his election campaign. But like California's reaction to Proposition 13, and the federal reaction to the Tax Revolt of 1933; Reagan's tax cut was issued only to have the federal government restructure its tax system to replace the lost revenue. The policy was achieved by closing loopholes in the tax law, raising the income tax "due to inflation," increasing discreet taxes like sin taxes, and increasing Social Security witholdings. Once again, voters wondered if the tax burden had truly decreased, while state legislatures from1978- 1980 collected the largest pay raise in history. VII. Conclusion In United States history, tax rebellion has proven important to the War of Independence, bringing the birth of our nation; the Whiskey Rebellion, the first time the federal government reacted en masse against its constituency; and the Civil War, a war claiming more American casualties than any other in U.S. history. Tax revolt may not have been the only factor behind these events, but evidence has suggested it definetly provided some of the economic and moral motivations. The Tax Revolts of 1933 and 1978 were not as violent or bloody, but, nonetheless, revealed a government body still protective of its revenue, only craftier. Government answered the desires of disgruntled voters not by downsizing government or providing real tax cuts, but by shifting tax burdens and launching media campaigns. Politicians had traded violence for maniulation. In the cases studied, all levels of government, including the legal sector, have proven extremely unwilling to compromise tax policy. For the Economist, this conclusion has implicated the political actor as a self-interested tax maximizor. If government is self-interested, a means of adequate restraint over its tax policy must be discovered. 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