The Volokh Conspiracy - War and Taxes

Many thanks to Eugene for allowing us to guest blog here on the Volokh Conspiracy. As mentioned in Eugene's post last week, we have a new book out (co-authored with Joe Thorndike) titled "War and Taxes," published by the Urban Institute Press in Washington, DC. We wanted to use this first post to provide a little context of why we wrote this book and what it's about.

As you probably know, the start of the war in Iraq corresponded roughly with the enactment of the Jobs and Growth Tax Relief and Reconciliation Act of 2003. The war started in March '03 and President Bush signed JGTRRA into law two months later. The coincident timing of these two events prompted a flurry of op-eds on the propriety of cutting taxes during a time of war. For example, as David Rosenbaum noted in the New York Times, "in his determination to cut taxes even while waging war in Iraq, President Bush is bucking history." Writing in the Los Angeles Times, Ron Brownstein noted that "we have always accepted heavier burdens as the price those at home pay to support those under fire on the front." More recently, New York Times columnist Frank Rich has observed that "since 9/11, our government has asked no sacrifice of civilians other than longer waits at airplane security. We've even been rewarded with a prize that past generations would have found as jaw-dropping as space travel: a wartime dividend in the form of tax cuts."

The basic objective of our book is to evaluate the historical claims implicit in these comments. Is it in fact true that "President Bush is bucking history" and that "we have always accepted heavier burdens as the price those at home pay to support those under fire on the front?" Unafraid to make bold, daring historical claims, our answer is… yes and no. As we see it, there are (at least) two ways of framing the history of American tax policy during wartime.

Frame #1: The Bush tax cuts mark an abrupt departure from our patriotic tradition of raising taxes during wartime. Those who subscribe to this perspective seem to have in mind the experience of World War II and, to a lesser extent, World War I and the Korea war. In each of these conflicts, the country "rallied 'round the flag" and embraced all sorts of homefront sacrifice, including extraordinary levels of taxes, to support the troops and the country's war effort.

Frame #2: The Bush tax cuts are simply the most recent and most extreme manifestation of an equally strong American tradition of reluctance, resistance and opposition to wartime tax burdens. Support for this perspective comes from a close examination of U.S. fiscal policy during the War of 1812, the Civil War and the war in Vietnam. In each these wars, political leaders for one reason or another had little interest in asking the public to bear greater tax burdens in order to finance the war effort, although in each of the wars new taxes were eventually imposed.

Over the next several days, we'll have more to say about each of these conflicts, as well as a variety of related tax policy controversies. We just wanted to use this post to introduce the book and give some background about our motivation for the project. We should be clear up front that we don't see the whole of U.S. history as some sort of perfect natural experiment from which we can draw strong inferences regarding the determinants of wartime tax policy. Obviously the world is a different place today than it was in 1812, 1942 or 1968 and there are many differences between the current conflict and prior wars. Nevertheless, we think there's enormous value in using history as a vehicle for discussing current policy issues. We look forward to hearing your feedback.

Kirk Stark

	[Kirk Stark, guest-blogging, June 2, 2008 at 8:56am] Trackbacks War and Taxes Many thanks to Eugene for allowing us to guest blog here on the Volokh Conspiracy. As mentioned in Eugene's post last week, we have a new book out (co-authored with Joe Thorndike) titled "War and Taxes," published by the Urban Institute Press in Washington, DC. We wanted to use this first post to provide a little context of why we wrote this book and what it's about. As you probably know, the start of the war in Iraq corresponded roughly with the enactment of the Jobs and Growth Tax Relief and Reconciliation Act of 2003. The war started in March '03 and President Bush signed JGTRRA into law two months later. The coincident timing of these two events prompted a flurry of op-eds on the propriety of cutting taxes during a time of war. For example, as David Rosenbaum noted in the New York Times, "in his determination to cut taxes even while waging war in Iraq, President Bush is bucking history." Writing in the Los Angeles Times, Ron Brownstein noted that "we have always accepted heavier burdens as the price those at home pay to support those under fire on the front." More recently, New York Times columnist Frank Rich has observed that "since 9/11, our government has asked no sacrifice of civilians other than longer waits at airplane security. We've even been rewarded with a prize that past generations would have found as jaw-dropping as space travel: a wartime dividend in the form of tax cuts." The basic objective of our book is to evaluate the historical claims implicit in these comments. Is it in fact true that "President Bush is bucking history" and that "we have always accepted heavier burdens as the price those at home pay to support those under fire on the front?" Unafraid to make bold, daring historical claims, our answer is… yes and no. As we see it, there are (at least) two ways of framing the history of American tax policy during wartime. Frame #1: The Bush tax cuts mark an abrupt departure from our patriotic tradition of raising taxes during wartime. Those who subscribe to this perspective seem to have in mind the experience of World War II and, to a lesser extent, World War I and the Korea war. In each of these conflicts, the country "rallied 'round the flag" and embraced all sorts of homefront sacrifice, including extraordinary levels of taxes, to support the troops and the country's war effort. Frame #2: The Bush tax cuts are simply the most recent and most extreme manifestation of an equally strong American tradition of reluctance, resistance and opposition to wartime tax burdens. Support for this perspective comes from a close examination of U.S. fiscal policy during the War of 1812, the Civil War and the war in Vietnam. In each these wars, political leaders for one reason or another had little interest in asking the public to bear greater tax burdens in order to finance the war effort, although in each of the wars new taxes were eventually imposed. Over the next several days, we'll have more to say about each of these conflicts, as well as a variety of related tax policy controversies. We just wanted to use this post to introduce the book and give some background about our motivation for the project. We should be clear up front that we don't see the whole of U.S. history as some sort of perfect natural experiment from which we can draw strong inferences regarding the determinants of wartime tax policy. Obviously the world is a different place today than it was in 1812, 1942 or 1968 and there are many differences between the current conflict and prior wars. Nevertheless, we think there's enormous value in using history as a vehicle for discussing current policy issues. We look forward to hearing your feedback. Kirk Stark