The Boston Tea Party is the most misunderstood event in American history. Every schoolchild learns it was an antitax protest, proof that Americans have always hated paying taxes. But the Tea Act of 1773 was actually a tax cut. Parliament lowered the duties on tea to bail out the East India Company, a corporation deemed too big to fail, and the Sons of Liberty destroyed ninety thousand pounds of tea not because taxes were too high but because a distant government was using fiscal policy to serve corporate interests without the colonists' consent. The colonists of Massachusetts kept collecting taxes locally even as they defied the British, simply redirecting the money to a patriot treasurer. They didn't want freedom from taxation. They wanted the power to tax themselves. That distinction, argues Vanessa Williamson, is the key to understanding everything that has happened in American politics since.
Today's guest is Vanessa Williamson, author of The Price of Democracy. We discuss how the Boston Tea Party was actually a protest against a corporate tax cut for the East India Company, not against taxation, why Shays's Rebellion terrified the founders into writing a Constitution deliberately designed to keep ordinary citizens away from the public purse, and how the Whiskey Rebellion revealed the pattern that would repeat across American history: when poorer people demand fairer taxation, elites respond with force or legal constraints or both. We look at how the Gilded Age Supreme Court declared the income tax unconstitutional, why it took a twenty-year populist campaign and a constitutional amendment to bring it back, and how Rockefeller's lawyers warned that a graduated income tax "realizes most completely the supreme danger of democracy." Williamson argues that free countries are high-tax countries, that authoritarian governments are bad at collecting revenue, and that the antitax movement in America has always been an antidemocratic movement, using supermajority requirements, property tax caps, and fiscal limitations to ensure that even when the people vote for a functioning government, the rules written by a previous generation's oligarchs prevent them from getting one.
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