Mary Bell Archive   |   Trotskyist Writers Index  |   ETOL Main Page

Mary Bell

Sales Tax Plan Soaks the Poor

(July 1944)

From Labor Action, Vol. 8 No. 29, 17 July 1944, p. 1.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

A Midwestern front has been opened in the drive of big money against the poor working man. Calling themselves the Twin Cities Research Bureau, Inc., a group of big business men from Minneapolis and St. Paul has launched a tax scheme against labor for the post-war period. Their plan, which would lower corporation taxes and steepen those of working people, if adopted, will just about “research” labor out of its last dime through a brand new five per cent sales tax in addition to those already existing.

The Twin Cities Research Bureau, Inc., is a high-sounding, misleading name for companies like General Mills, Inc. (the Cream of Wheat Corporation), the Minneapolis-Honeywell Regulator Co., the Soo Line Railroad, the Minneapolis-Moline Power Implement Co., and many others worth over half a billion dollars. Their president is F.K. Weyerhaeuser, a representative of wealthy lumber interests.

Cooking It Up

Expense was not spared in launching this post-war plan. The Washington representative of Cowles Brothers’ Look magazine invited correspondents of the wealthy capitalist newspapers to dine on filet mignon and to wine on Scotch liquor and cocktails at the Statler Hotel. Lavishly printed explanations of the plan were given to the correspondents, along with an oral sales plea by John L. Connolly, tax expert for the Minnesota Mining & Manufacturing Co. of St. Paul. Press releases were printed in color.

The appealing ballyhoo for the plan was that “relatively heavy corporate incomes tax rates” must be continued after the war in order to reduce individual income taxes and to encourage venture capital. But the program proposed, in order to continue these “relatively heavy corporate income taxes,” to CUT the present rate from fifteen billion dollars a year to five billion! Two and two are five, you see. In order to maintain this high rate of corporate taxes, undoubtedly, all corporation excess profits taxes would be repealed, and all other corporate taxes except the basic forty per cent normal tax.

Individual income taxes would be reduced from seventeen billion to five billion dollars. That sounds like easing the burden of the poor. Except that the greatest easing occurs in the upper income brackets, especially among the wealthy with their dividends. Four per cent of the hard-earned gains of coupon-clippers would be exempted. How the lower bracket incomes are to be aided remains a little obscure.

Laying It on the Poor

While venture capital and monopolies would be freed of taxes, the plan of the “researchers” would retain the war sales taxes and throw in an additional five per cent sales tax for good measure, chiefly on those who don’t make enough now to pay income taxes.

The fathers of the plan stated: “If this two billion (to be raised by the sales tax – Ed.) or any substantial part of it is to be removed from the taxes of the low-income group on the political ground that there are more voters in that area, the free enterprise system will be seriously jeopardized.” (“Free enterprise” is what capitalists and their publicity agents call the profit system.)

All taxes would bring in an estimated total of eighteen billion dollars a year, which these business men figured would finance the government – exclusive of a new WPA and unemployment relief. Working people would contribute more than a third of these taxes.

Labor does not need a research corporation to know that business is planning for its own prosperity in such a post-war scheme – and for labor’s continued poverty. The plans of these money-mad corporations do not even foresee jobs for workers after the war. Labor should free itself now from its no-strike bonds, raise its standard of living and place the tax burden squarely on the shoulders of those who can best afford to pay it, the big corporations! Labor should demand a one hundred per cent tax on all war profits above five per cent of their invested capital!

Mary Bell Archive   |   Trotskyist Writers’ Index  |   ETOL Main Page

Last updated: 13 December 2015