Breitman Archive   |   Trotskyist Writers Index  |   ETOL Main Page

George Breitman

Newark Labor and the Tax Question

(15 March 1938)

From The Militant, Vol. V. No. 11, 15 March 1941, p. 4.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The coming Newark City Commission elections may very well be decided around the issue of the ever-rising tax rate, which was $4.85 last year and which is driving thousands of home owners, grocers and small shop-keepers to ruin, at the same time that it is partially responsible for the rising cost of rent for the workers.

The forces of big business in Newark, are uniting around the coalition ticket of Commissioner Byrne (Hague Democrat) and Reverend Clee (Republican who was almost elected Governor a few years ago by denouncing Hagueism) and Company.

Crying crocodile tears about the plight of small business (when what interests them alone is the taxation of the big businesses, corporations and insurance companies), they say substantially the following:

“The tax rate is high and will ruin us all if we don’t do something about it. We must put people into office who will cut the tax rate. The way to do it is to elect honest men who will cut relief, because most relief clients are ‘chiselers’ anyhow. Stop sponsoring WPA projects, because there are plenty of jobs available in private industry. Fire more school teachers. Cut down on the City Hospital. Don’t waste money on the library budget. Don’t permit erection of new schools. Cut the wages of city employees”

And so on.

Tbe Ellenstein group has no satisfactory answer to the problem either. When the pressure for reductions is put on them, they respond by cutting the same things the Byrne-Clee group want to cut: the socially necessary items which are used primarily by the workers.

Secondly, it must he remembered that the more money they spend, the more patronage they have. This is a very important consideration for a group whose main program is stay in power at all costs.

Every taxpayer is thinking about the 1941 tax rate in connection with the election. In most years, the rate is figured out and announced in February or March. Unable to answer the problem satisfactorily, City Hall has decided to get around it – by not announcing the 1941 rate until after the May 13 elections!

Our Answer

There is an answer to the problem which would cut the tax rate and at the same time provide the necessary money for relief, library, etc. This answer has been presented by the Socialist Workers Party on numerous occasions. It has not been picked up by the City Hall group, in spite of its claims that it represents the interests of the “common people,” for only a party that is really opposed to big business could espouse and tight for it. For this reason, among others, we are calling for the formation of a labor party, based on the unions and embracing the unemployed and Negro groups, and running its own candidates on an independent platform.

The 1940 budget was 55 million dollars. Of this, more than 9½ millions were for debt services, the largest single item in the Budget. Of this, part is for amortization (repayment of past bond issues) and the rest is for interest on these loans.

Step No. 1

There could be a large cut in the tax rate if the City Commission let the banks and bonding houses go without some of that money this year. The city’s bonds should he recalled and refinanced at a lower interest rate. Of course, this would mean the bonding houses wouldn’t make so much money, but it would also mean that the taxpayers would get some real relief.

The city could go further, as some municipalities have, by just declaring a moratorium on debt services. The bankers would howl about “the sanctity of contracts,” but what they would mean really is “the sanctity of foreclosures on small homes” and “the sanctity of higher rents in the workers’ districts.”

Step No. 2

The second way to reduce the tax rate is by reassessing the property of the city. Many small homes are still assessed at close to pre-depression values, while on the other hand the larger properties are assessed below their market values. Reassessment of property that would raise assessment figures on the corporations and lower them on the small taxpayers, would lower the tax rate and at the same time would make the corporations pay more in taxes, thus placing the burden of taxation where it belongs, on big business which can afford to pay it. Since the Socialist Workers Party put this program forward. City Hall has adopted a weak and distorted variant of it. In an effort to cut the tax rate this election year, they are refinancing a small part of the bonds in the sinking fund. But they are afraid to go through with refinancing all of them, although that’s the only way to get a real tax rate reduction.

And similarly, they began a reassessment of property with these results:

The 1937 total assessment of almost a billion dollars was cut 67 millions by 1938, and another 67 millions the nest year; 1940 reductions were 51 millions, and this year 53 millions. Had both big taxpayers and small taxpayers received the same proportionate reductions, this would mean the tax rate goes up the same for both.

But there was a change. Out of this reduction of almost a quarter billion dollars, the bulk of reductions in assessment were made for big business, while the reductions for the small tax-payers have been comparatively small.

This is one reason why our slogan in this election campaign is: LET LABOR CONTROL THE CITY COMMISSION! Only a labor party can win the support of the small taxpayer and form a successful alliance against the aims of big business.

Breitman Archive   |   Trotskyist Writers Index   |   ETOL Main Page

Last updated: 3 October 2015