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Friday, April 22, 2005

FDR's 100% Tax

In 1942, only a few months after Pearl Harbor, President Franklin D. Roosevelt proposed a 100 percent top marginal tax rate. At a time of “grave national danger,” the president advised that April, “no American citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year. Roosevelt was proposing, in effect, what amounted to a maximum wage—at an income level that would equal, in our contemporary dollars, about $300,000.

Imagine, for a moment, what would happen today if John Kerry—suddenly inspired by FDR’s bold example—were to propose a 100 percent tax on income over $300,000 to help wage the war against terrorism. Kerry would be hooted off the political stage, maybe even tagged a terrorist himself for trying to disrupt and destroy the American economy.

FDR's 1942 income cap proposal, interestingly, invoked no such feverish reaction. The nation, most Americans agreed, faced an emergency. All Americans needed to do their part. Some Americans were sacrificing their lives to stop fascism. The least the rich could do, as even some rich Americans agreed, was sacrifice some fortune.

"I regret," announced Hollywood starlet Ann Sheridan, “that I have only one salary to give for my country.”

The opposition to FDR’s income cap proposal would go about its business behind the scenes. The mandarins on the House Ways and Means Committee would quietly refuse to give the president’s cap any serious consideration. But Roosevelt would not be deterred. Shortly after Labor Day, he repeated his call for a $25,000 income limit, “the only practical way of preventing the incomes and profits of individuals and corporations from getting too high.” Congress would eventually relent and tilt in the president’s direction. The Revenue Act of 1942 would leave America’s most fortunate paying taxes on income over $200,000 at a tax rate well over 90 percent. The war years would go on to become, notes historian John Witte, “the most progressive tax years in U.S. history.”

Today, by contrast, we are waging a war amid what have become the least progressive tax years in modern U.S. history. Pulitzer Prize-winning tax analyst David Cay Johnston estimates that our nation’s wealthiest households are now paying federal income taxes at a mere 17.5 percent rate, after exploiting all available loopholes. America’s richest households in 1943, after exploiting all available loopholes, paid nearly 78 percent of their total incomes in federal tax.
How times change when you have the Devil and his pseudo-Christian minions running the show.

Jack Clark 9:38 PM [+]  
Post #111423113575303302

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