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Gertrude Shaw

Washington Experts Plan Harder Tax Blow at Poor

Bill for Next Year Worse Than One Just Passed

(2 November 1942)

From Labor Action, Vol. 6 No. 44, 2 November 1942, pp. 1 & 2.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

The working people of this country are still pop-eyed over the tax bill just passed by Congress – pop-eyed and wondering how they will pay regular taxes, victory taxes, war bond purchases, taxes on a long list of commodities, and still be able to buy AT WAR PRICES what they need to live on.

But in the nation’s capital the theory is that THAT’S your worry.

For no sooner was the ink dry on this iniquitous tax bill than the tax experts got busy on a “BIGGER AND BETTER” one for next year.

Morgenthau has already submitted his ideas for the new bill to the Congressional committees – and we are assured by Washington reporters that it will make this year’s tax bill look like a chapter out of Paradise Lost.


The President goes further and nonchalantly tells his press conference that “officials are seriously considering a compulsory savings plan to drain off an estimated $5,000,000 in EXCESS purchasing power.”

“Excess” purchasing power – and every worker worrying how to keep his standard of living from collapsing altogether!

Undoubtedly now is the time for labor to get busy. To wait until next year – is to wait too long. Washington is hell-bent to take the shirt off labor’s back to pay for the war – AND IT MUST BE STOPPED,

We ask every worker to consider carefully what Labor Action proposes as labor’s tax program. It is either our program or Washington’s plans for lifting more and more money out of labor’s already half-empty pockets.

Labor Action comes out for a 100 per cent tax on war profits. Is there anything fairer than this demand!

The Department of Commerce reported that last year, 1941, AFTER ALL CORPORATION TAXES WERE PAID, corporation profits were 30 per cent more than in 1940 – and 75 per cent more than in 1939.

In April 1942, representatives of the Bendix Aviation Co. themselves admitted before the Vinson Committee to making as much as 122 per cent profit on government contracts. This gives a rough idea of the drift.

Maybe you think the new tax bill will fix this. You are mistaken – and how! According to figures given by Standard Statistics, known as the largest organization advising the rich on their investments, profits AFTER THE NEW TAXES ARE DEDUCTED will be MORE than they were last year.

For instance, Lockheed Aircraft, which “earned” $6.89 a share in 1941, will “earn” $10.30 in 1942; Bohn Aluminum, which “earned” $5.48 in 1941, will “earn” $9.05; Borg-Warner, which “earned” $3,20 in 1941, will “earn” $4.30; Eaton Manufacturing, which “earned” $6.20 in 1941, will “earn” $7.60. These figures include the post-war rebate that the government promises to the self-sacrificing capitalists of the nation.

Lest we forget what it is that these profits are being made out of, here is a quote from that popular book on the Battle of the Philippines entitled They Were Expendable, a quote every congressman with his hands in labor’s pockets should read:

“They were burying the dead – which consisted of collecting heads and arms and legs and putting them into the nearest bomb crater and shoveling debris over it. The smell was terrible. The Filipino yard workers didn’t have much stomach for the job, but it had to be done and done quick because of disease. To make them work, they filled the Filipinos up with grain alcohol.”

That’s what war profits come from!

That is also what war profiteering salaries come from. Labor Action stands for an absolute maximum income of $25,000 – with no “ands,” “ifs” and “buts” – $25,000 maximum BEFORE taxes and with no phony allowances.

The following is a partial picture of salary increases in 1941 over 1940: C.B. Smith of American Airlines, 49.2 per cent; Victor Emanuel of Aviation Corp., 21.7 per cent; B.H. Fleet of Consolidated Aircraft, 58.4 per cent; Walter F. Rockwell of Timken-Detroit Axle, 218 per cent; Tom Girdler of Republic Steel, 56.7 per cent (from $176,000 to $275,000); H.L. Ferguson of Newport News Shipbuilding & Drydock Co., 81.5 per cent (from $70,400 to $127,080); J. Spencer Love of Burlington Mills, 95.5 per cent from $91,939 to $179,652); Eugene Grace of Bethlehem Steel, a mere 12.4 per cent – but — from $478,14.4 to $537,734.

There are many other salaried war profiteers in Mr. Grace’s class as well as in the other categories mentioned above.

Yes, these swollen salaries come from the same gruesome source as do the war profits of these companies – profits which, by the way, are figured AFTER paying out such huge slices in salaries.

Furthermore, Labor Action stands for a government levy on capital to cover the cost of war. The accumulated wealth of America’s Sixty Families – the Rockefellers, Mellons, duPonts, Fords – is not sacred. That fleeced wealth has nothing to do with the wherewithal of life. BUT WORKERS’ WAGES HAVE.

That wealth is robbers’ swag – wealth produced by labor but never received by it. The working class has been amply taxed FOR ALL TIME in this accumulated wealth of America’s Sixty Families. It is high time to tax labor’s exploiters.

Especially so when we consider how much will be added to the pile by war profits, by war-melon salaries – and by the post-war legacies of plants built and paid for by the government which will doubtless go to such companies as the Big and Little Steels, Chrysler, Goodrich, Goodyear, etc., for a song and dance, if not for nothing.

Organized labor must come out full force against a sales tax on consumer goods, against all taxes on wages, against forced savings. LET THE CAPITALISTS PAY FOR THEIR WAR. The only tax program that accords with labor’s vital interests is that presented by Labor Action.

Labor must raise its voice now – as an independent political force – for a 100 per cent tax on war profits, for maximum salaries of $25,000 BEFORE taxes, for a levy on the wealth of the Sixty Families!

THIS IS LABOR’S TAX PROGRAM. There is no other!

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Last updated: 15 September 2014