From Labor Action, Vol. 5 No. 12, 24 March 1941, pp. 1 & 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
As soon as the ink was dry on the President’s message to Congress last week asking for seven billion dollars to implement the “all-out aid to England” program, the proposals as to how this money should be raised came thick and fast. Rumor has it that they boil down to two main propositions Either or both is being given serious attention by those “patriots” who measure the extent of their patriotism by the degree to which they can increase their bank accounts. One is a 5 per cent payroll tax to be levied each week on all those earning $25 a week or more. This tax would be deducted at the source. That, is, the employer will deduct it from your paycheck and you will get your regular weekly pittance minus; the 5 per cent. In the course of a year, it is estimated that such a tax can raise several billion dollars. The other proposal is for a national sales tax to be placed on all articles that enter into commerce. A two or three per cent sales tax on everything you buy could also raise several billion dollars.
If either or both of these measures is adopted the government’s credit will be maintained in a sound position, industry can go ahead and “pay-triotically” produce the munitions required to save democracy without worrying about its incentive to produce being destroyed, for there will no longer be any necessity to talk about higher taxes on corporations and excess profits taxes and such annoying things. Isn’t this a small sacrifice to maintain our way of life? Besides, you won’t even notice it. This argument of the reactionaries was given sharp emphasis by the President in his “Aid to Democracies” speech on March 15, when he said, in speaking about everybody sacrificing: “Yes, you will feel the impact of this gigantic effort in your daily lives. You will feel it in a way that will cause lo you many inconveniences.”
And these “inconveniences” will be very, very noticeable: A worker making $25 a week would have $1. deducted from his payroll every week, if the payroll tax goes through. If the national sales tax should also be passed, that will place an additional burden on the worker, who is already having a hard enough struggle to feed, clothe and shelter his wife and children. Assuming that $20 out of a worker’s $25 weekly income spent on goods and services that would be subject to sales tax, that would mean (on the basis of a 2 per cent sales tax) an additional 40 cents a week cut in wages. $1.65 a week, or more, in new taxes may not sound very much, but for a worker getting only $25 a week, this is tremendous sum. someone getting $125 a week or a corporation executive receiving the measly stipend of $2,500 a week can very easily afford to pay five times, or 100 times, what the worker making $25 a week can afford to pay. Both a payroll tax and a sales tax are vicious, reactionary types of taxes. The burden falls most heavily on those who can least afford to pay them. this is a direct violation or the accepted principle of taxation, that taxes should be based on ability to pay.
Moreover, this does not take into account at all the fact that prices are rising and promise to rise much more rapidly in the future. Wholesale commodity prices arc already more than 29 per cent higher than they were at the outbreak of World War II on Sept. 1, 1939. Retail prices are beginning to catch up to wholesale prices. Meat prices have risen, in some cases, more than 25 per cent in the same period. The cost of living on the average throughout the country has gone up more than 3 per cent and will now start to rise in all earnestness. To which must be added the fact that with the establishment of priorities in aluminum and other metals, we will just begin to feel the impact of the war economy in coming months in the form of shortages of many things that the consumer needs.
Some will grant that these new taxes are very unfair, but, they want to know, how else can we pay for the cost of the war program? The answer is simple. The big corporations in 1940 made the highest profits they have made since 1929, even after making deductions for higher taxes. Why not, Mr. President, take these billions of dollars of profits and use them to pay for the cost of your and their “Aid to England” program? And if the 60 families that run this country and control the lion’s share of the wealth won’t turn out munitions to preserve “democracy” unless, they can make their 8, 10 and more per cent profit, WHY NOT, MR. PRESIDENT, HAVE THE GOVERNMENT TAKE OVER THEIR FACTORIES AND PLACE THEM UNDER THE MANAGEMENT OF THE WORKERS?
You won’t do this, Mr. Roosevelt for the simple reason that your desire to defeat Hitler is, and must be, subordinated to your desire to maintain the profit system. If you dared to take any steps against profits, your real bosses – not the American people, but Wall Street and the 60 families – wouldn’t like it. They might even get rid of you as no longer useful to them. We say that you can’t preserve democracy and profits, Mr. President. One or the other will have to go.
And by the way, did you know that while you were speaking about all of us sacrificing to help the cause of democracy (read: American imperialism), your Congress is considering ways and means of lightening the burden of the excess profits tax? Yes, this same excess profits tax that was such a swindle last October that you couldn’t count on it to raise more than a little chicken feed in a year when corporations were making huge profits, is now to be reduced. New exemptions and deductions are to be allowed.
If the meaning of this isn’t clear to you, Mr. Roosevelt, it certainly will be clear to the workers of this country. When you speak of sacrifice, what you mean is that the workers should sacrifice. They should pay for the cost of your war; they should stop striking to improve their conditions so that nothing will interfere with your program of making American imperialism supreme throughout the world. This is pure hypocrisy and we are confident that the workers of this country will recognize it for what it is and will act accordingly.
Last updated: 4.12.2012