Conservatives should be leery of jumping into wars not only because American power may become overextended—especially in a time of fiscal crisis—but because war makes government expand rapidly at home, even in areas outside of national security. Although conservatives routinely criticize Franklin Delano Roosevelt’s New Deal for ushering in the era of big government, the deeper origins of the American welfare state lie in the warfare state.
During wars—especially big conflicts that require mobilization of the entire society to fight them—interest groups see the government doing things it didn’t do, or wasn’t allowed to do, previously. After the conflict, newly empowered bureaucrats and constituency groups benefiting from wartime expansion lobby to keep at least some of the new measures in place. The creation of the Food Administration during World War I, for example, ultimately led to the expectation in the farm sector that government regulation could prop up farmers’ incomes.
Even more fundamental, however, is the impact that war has on a government’s ability to finance its expansion at home. The potential for tax revenues determines how big government can grow and the number and size of programs that can be supported. (Even deficit financing is based on confidence in the government’s ability to raise funds through taxes.) And war is the force that has most often led to new and greater sources of nourishment for Leviathan. According W. Elliot Brownlee, author of Federal Taxation in America: A Short History, “moments of sweeping change in tax regimes have come invariably during the nation’s great emergencies—the constitutional crisis of the 1780s, the three major wars [the Civil War, World War I, and World War II], and the Great Depression.”
A case in point is the income tax, one of the most intrusive and economically irrational taxes a government can impose. One commissioner of Internal Revenue went so far as to say in 1871 that the income tax was “the one of all others most obnoxious to the genius of our people, being inquisitorial in its nature, and dragging into public view an exposition of the most private pecuniary affairs of the citizen.” Unlike sales or excise taxes, which inhibit consumption, the income tax penalizes economically productive work and the just rewards for it—thereby dragging down prosperity.
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