June 2011

Barry Goldwater and a Conservative View of Taxation

By John Hendrickson

Barry M. Goldwater, who served as a United States Senator from Arizona and the Republican presidential nominee in 1964, was a major leader of the modern American conservative movement. Goldwater was an unashamed conservative and challenged the liberal New Deal and Great Society orthodoxy. Although he lost the 1964 election in a landslide to President Lyndon B. Johnson, he paved the way for Ronald Reagan’s conservative revolution in 1980. Goldwater was a conservative who fought for limited government policies and a return to constitutional principles. He also believed that limited government and economic liberty was the best path to national prosperity. Goldwater outlined his political philosophy in The Conscience of a Conservative, which provided a policy and philosophical blueprint to solve both foreign and domestic policy problems. In the area of taxation, Goldwater championed a tax policy that was in line with the policy of a limited government. Today’s policymakers can learn a lot from Goldwater’s ideas on tax policy.

Goldwater argued that taxation was not just an economic concern, but also a moral concern. “We have been led to look upon taxation as merely a problem of public financing: How much money does the government need? We have been led to discount, and often to forget altogether, the bearing of taxation on the problem of individual freedom,” stated Goldwater.[1] Taxation was a moral concern because it deals directly with property rights. As Goldwater stated:

Indeed, in the industrial age, earnings are probably the most prevalent form of property…How can he be free if the fruits of his labor are not his to dispose of, but are treated, instead, as part of a common pool of public wealth? Property and freedom are inseparable: to the extent government takes the one in the form of taxes, it intrudes on the other.[2]

Goldwater did not argue that government did not have the right to levy taxes, but taxation must not be made a class issue for the purpose of redistribution of wealth. “Government, in other words, has some claim on our wealth, and the problem is to define that claim in a way that gives due consideration to the property rights of the individuals,” noted Goldwater.[3]

At the core of tax policy was the Constitution. The Constitution addresses the responsibilities of the federal government, which will influence tax policy because Congress will spend tax money in order to pay for the necessary constitutional functions of the government. Article 1, Section 8, for example lists the powers and responsibilities of Congress. As Goldwater wrote:

With regard to the federal government, the Constitution is the proper standard of legitimacy: its ‘legitimate’ powers, as we have seen are those the Constitution has delegated to it. Therefore, if we adhere to the Constitution, the federal government’s total tax bill will be the cost of exercising such of its delegated powers as our representatives deem necessary in the national interest. But conversely, when the federal government enacts programs that are not authorized by its delegated powers, the taxes needed to pay for such programs exceed the government’s rightful claim on our wealth.[4]

Goldwater believed that the Constitution limited the powers of the federal government and therefore Congress was limited in its legislative scope. The Constitution, Goldwater argued, was “an instrument, above all, for limiting the functions of government, and which is as binding today as when it was written.”[5]

Government spending and tax policy went together and Goldwater argued that limiting spending was just as crucial as or even more crucial than cutting tax rates. He argued that “as a practical matter spending cuts must come before tax cuts. If we reduce taxes before firm, principled decisions are made about expenditures; we will court deficit spending and inflationary effects that invariably follow.”[6] Goldwater understood the virtue of a balanced budget as well as low tax rates. In fact during the 1950s Goldwater worked with Senator Robert A. Taft, who was the conservative leader from Ohio, to advance both spending and tax cuts. After Taft’s death in the early part of the 1950s, Goldwater assumed the leadership of fiscal conservatism in the Republican Party and often criticized uncontrolled spending in Congress.

In urging spending cuts, Goldwater also pushed the federal government to return back to constitutional, limited-government principles:

The government must begin to withdraw from a whole series of programs that are outside its constitutional mandate — from social welfare programs, education, public power, agriculture, public housing, urban renewal and all other activities that can be better performed by lower levels of government or by private institutions or by individuals. I do not suggest that the federal government drop all of these programs overnight. But I do suggest that we establish, by law, a rigid timetable for a staged withdrawal. We might provide, for example, for a 10 percent spending reduction each year in all of the fields in which federal participation is undesirable.[7]

Only by returning to constitutional, limited government could the nation “obtain relief from high taxes, and start making progress toward regaining their freedom.”[8]

Reducing spending and taxes would not only bring a return to constitutional government, but economic growth as well. Economic growth, Goldwater argued, “will be achieved, not by the government harnessing the nation’s economic forces, but by emancipating them.”[9] “By reducing taxes and spending we will not only return to the individual the means with which he can assert his freedom and dignity, but also guarantee to the nation the economic strength  that will always be its ultimate defense against foreign foes,” stated Goldwater.[10]

Goldwater’s conservative philosophy, which was rooted in constitutional limited government, is desperately needed today, especially with the current economic problems. The nation is emerging out of a major recession with a weak recovery that is being hindered by policies that Goldwater fought against during the 1950s and 1960s. The massive increase in regulatory activity by the federal government, the entitlement crisis, and the emergence of federal control over health care with the Patient Protection and Affordable Care Act, have all created uncertainty over the economy.

High tax rates, especially the corporate tax rate, are causing business uncertainty. The national debt crisis threatens to cripple the economy and also poses as a national security risk as the United States is in debt to various foreign nations, especially the Chinese. Currently, the national debt is over $14 trillion and Congress will decide whether or not to raise the debt ceiling this summer. In addition, Congress in the past few years has been running deficits in the trillions, and these deficits are expected to continue unless spending is reduced. Clearly the federal government has a spending problem.

Goldwater, who favored a flat tax policy, was correct in pushing for spending and tax cuts, but more importantly fighting to restore constitutional, limited government. This is the policy that is needed to solve today’s economic problems. The Conscience of a Conservative provides a policy blueprint for policymakers to follow. Patrick J. Buchanan described Goldwater’s book as “our new testament; it contained the core beliefs of our political faith…”[11] “In this sermon of fire and brimstone that is The Conscience of a Conservative, Barry Goldwater had the answers, if only we had followed his wise counsel,” wrote Buchanan.[12] Hopefully policymakers will follow Goldwater’s example and restore constitutional, limited government.

John Hendrickson is a Research Analyst at Public Interest Institute.

The views expressed herein are those of the author and not necessarily those of Public Interest Institute or Tax Education Foundation. They are brought to you in the interest of a better-informed citizenry.

[1] Barry M. Goldwater, The Conscience of a Conservative, MJF Books, New York, 1990, p. 47.

[2] Ibid., 48.

[3] Ibid., 49.

[4] Ibid.

[5] Ibid., p. 10.

[6] Ibid., p. 50-51.

[7] Ibid., p. 53-54.

[8] Ibid., p. 54.

[9] Ibid.

[10] Ibid.

[11] Patrick J. Buchanan, “The Voice in the Desert,” introduction to, The Conscience of a Conservative, MJF Books, New York, 1990, p. ix.

[12] Ibid., p. xx.