Glotzer Archive | Trotskyist Writers Index | ETOL Main Page
From Labor Action, Vol. 7 No. 41, 11 October 1943, pp. 1 & 4.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
The Treasury Department has just submitted to Congress the highest tax bill in American history. The over-all amount called for in this new bill is $10,560,000,000, a scaledown from the sixteen billion dollar bill proposed last January and thereafter reduced again to twelve billions.
The new bill calls for some simplification in making out tax returns, but this is rather unimportant When placed against the fact that it proposes to increase the taxes on all incomes, resulting in the heaviest pressure against all low-income groups, that is, the workers.
The biggest opposition to the new tax bill comes from big business and its spokesmen in the House and Senate. They object to any increases in taxation upon corporations and big incomes, even though rebates are planned for them, and even though the new tax rates proposed for corporations still give them profits equal to those made in the boom year of 1929.
The big business opposition has formulated its program: a national ten per cent sales tax on all retail goods!
This program was presented to the House Ways and Means Committee by M.L. Seidman, chairman of the taxation committee of the New York Board of Trade, a big business organization. This sales tax program was immediately supported by reactionary Representative Taber, New York Republican, who also called for “economy” and the cutting of the government budget by $4,158,000,000.
The Treasury Department is willing to eliminate the victory tax, now counted in on the withholding tax, but proposes to raise the latter tax to twenty-four per cent from the present rate of twenty per cent.
It is in the reduction of exemptions that the new tax bill proposes to hit hardest at the workers. The program calls for a reduction in exemptions of married couples to $1,100 instead of $1,200, and to cut the exemption for each child from $350 to $300.
Income taxes would start at twenty-seven per cent in place of the present twenty-two per cent (nineteen per cent income tax, plus three per cent victory tax.)
These new taxes will be accompanied by a forced savings provisions for incomes ranging between $2,000 and $25,000.
The fight in Congress against the new bill on the grounds that it places too heavy a burden on big business and the rich has made its passage unlikely.
The congressional hatchetmen are now gunning for the removal of Morgenthau as Secretary of the Treasury. Bad as his tax programs have been for labor, the congressional reactionaries are convinced that his programs demand too much from the boss class.
They are out to put the whole burden of the war on labor, on those least able to carry it and those who have received the butt end of the “equality of sacrifice” program.
That is why they are championing the sales tax and an increase in taxes on low incomes.
The New York Times argues that statistics of the Treasury Department show that “four-fifths of all the income of the nation is going to people earning less than $5,000 a year.” The fact that this income is divided among almost the whole population of the country (the upper bracket incomes go to an extremely small number of people) is ignored. The reason for this is that the New York Times as well as its big business brothers want the financial burden for their war to be placed on the shoulders of the working class.
This is proved in another way. Even the Treasury Department has admitted that black market buying is done chiefly by those whose incomes are above $3,000 a year. This means that the overwhelming majority of the working class is unable to purchase the vast amount of goods sold in this market, most of it going to the upper income group.
In the upper income bracket, of those making more than $25,000 a year, 110,000 of them still have an average of $30,000 left after taxes.
Yet the millions who earn less than $1,000 a year have only $866 left after taxes. This includes both single and married people with families.
In the incomes ranging from $1,000 to $3,000, the average yearly wage left after taxes is only $1,930, which is less than what is required for a family to buy its necessities of life. It is upon this overwhelming mass of people, running into the tens of millions, that big business and its congressional and press mouthpieces demand that a ten per cent sales tax be placed.
In either case, whether the ten per cent sales tax, or something less than this, is passed, or whether the Treasury tax program in its present or modified form is passed, labor will get it in the neck.
Labor Action urges its own program on taxes: Take the burden off the backs of the low income groups and the poor, who make up almost the entire population of the country. Place the burden on those who can carry it!
Labor Action 1943 Index | Writers’ Index
Encyclopedia of Trotskyism | Marxists’ Internet Archive
Last updated on 8 July 2015