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Gertrude Shaw

Our Tax Program: Soak the Rich!

Taxes on Low Incomes Equal Wage Cuts

(22 March 1943)

From Labor Action, Vol. 7 No. 12, 22 March 1943, p. 1.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

While the workers are digging into their pockets and coughing up plenty dor taxes, Congress is busy with its various new tax plans. There is quite a raft of them – the Ruml plan, the Carlson bill, the Robertson bill, to name a few. There is also talk of increasing the tax rates and of imposing a national sales tax – showing which way the wind is blowing.

All of these schemes and any of them will carry out the fundamentally unfair policy of saddling onto the working people the main burden of financing the war. Even the tax plans of the AFL and CIO accept that boss policy and offer nothing basic to lighten the taxes on the workers.

Basically there is no reason why the working people should bear ANY of the fantastic cost of this war. The working people should not be taxed at all – neither on their wages nor on what they buy as consumers. There are other sources for war taxation – much more ample than a worker’s wages.

There are, first of all, the stupendous war profits taken in, hand over fist, by industry – about which readers of Labor Action have a good idea. All profits are unclean because they come from the exploitation of labor. But war profits are of a particularly filthy character.

Every cent of war profits should be confiscated by the government. War profits must be abolished in toto. That is one source for financing the war.

An equally vast source is the accumulated wealth of America’s “Sixty Families.” These tremendous fortunes – comprising the ownership of perhaps ninety-five per cent of the total wealth – are absolutely scot-free of taxes, the Morgans, Rockefellers, Mellons, Fords, duPonts and all the branches of their family trees, own the bulk of the banking, industrial and farming wealth; of the utilities, of wholesale and retail business, and whatever else you can think of.

But all these fortunes – the extent of which one cannot even imagine – running into hundreds of billions of dollars, are considered holy – in themselves never to be taxed (except when passed on in inheritance). It is only the annual profits on this enormous untaxed wealth that the tax collector nibbles at. THEREFORE, THERE MUST BE A YEARLY LEVY ON THIS ACCUMULATED CAPITAL. Let the Sixty Families disgorge – instead of working people getting themselves into debt trying to pay taxes and to meet the cost of living with frozen wages.

Another logical source for financing the war is the salaries of the “captains of industry” – RUNNING INTO SIX FIGURES. In 1941, Eugene Grace, president of Bethlehem Steel, “earned”(?) $537,724 and Tom Girdler of Republic Steel got a “wage” of $275,000 – besides the income from various other sources.

But in July 1942 – IN THE MIDST OF THE WAR BOOM – 16,000,000 American workers were still earning less than $16 a week, and the average war wage was $37 a week.

Which of these categories is better able to pay taxes – the “captains of industry” or the “deck hands of industry”? HEAVY TAXES MUST BE PLACED WHERE THEY BELONG – ON THE HIGH INCOME BRACKETS, including salaries and other sources of income.

The above three points form substantially the tax plan of the WORKERS PARTY and have the wholehearted support of Labor Action. To abolish war profits by 100 per cent confiscation – to tax the six-figure incomes down to four figures – to levy yearly taxes on accumulated fortunes – this is a tax program for the whole working class. Such a plan carries out the eminently just principle that the workers should not be made to finance the war as well as bear its other burdens.

However, this just principle certainly does not occur to the law-makers. If a true representative of labor proposed it in Congress, it would undoubtedly produce paroxysms of wrath. With congressmen – as with the National Association of Manufacturers – the Ruml plan is one of the favorites because it will “forgive” the 1942 taxes. Since profits in 1942 were a lush growth, the rich would be getting away with murder under the Ruml plan.

True, the workers would also be “forgiven” their 1942 taxes. But —

President Roosevelt has asked for $16,000,000,000 additional taxes in 1943. And while he opposes the Ruml plan, his basic scheme is similar to that of Congress – hit low incomes as hard as possible. Already there is talk in Congress of increasing the income tax rates and of imposing a sales tax. With the influence that the National Association of Manufacturers has upon the “representatives of the people,” you may be sure that they will see to it that the load of new taxation is put on labor’s back just as was done in 1942. The “forgiveness” of 1942 taxes would very soon be forgotten by the workers – staggering under a new load made even heavier by the “forgiveness” to the bosses of their 1942 taxes.

The tax plan of the AFL and the CIO is very similar to the Robertson bill. The idea of this bill is to cancel only the 1942 normal and surtax on all incomes, and not the entire tax. This would “forgive” the workers the entire tax because they pay only normal and surtax, but would make those subject to higher taxes pay them.

As a temporary expedient, this plan seems to have something to recommend it. But it does not seek to solve the tax question on a principled working class basis. On the contrary, the AFL and CIO leadership are accepting the capitalist idea that it is just to tax the working people to pay for the war. Here is another instance of the class collaboration of union officialdom. It compromises with the powers that be – and gives labor the small end of the compromise.

All the tax schemes up for congressional consideration contain the pay-as-you-go feature. Superfically, pay-as-you-go looks like a plan to accommodate the workers. But is it? Isn’t it rather a plan to get the workers’ money while the getting is good? For politicians know – as well as you do – how uncertain a thing is employment.

To make assurance doubly sure, any tax bill passed will undoubtedly authorize the bosses to withhold at least twenty per cent of a worker’s wages each week, to be applied on his income tax. To wait until 1944 for workers to pay taxes on their 1943 wages might be waiting for mass resentment to reach explosive form. This essentially is the intention of the Roosevelt Administration.

Such is the array of bills before Congress. While the tax question is up before the lawmakers – who will, as usual, protect “sacred” wealth and profits, it should also be on the floor of every union local – for discussion from the point of view of the workers. Labor Action suggests a rank and file discussion of the following proposition:

Why should the workers – whose wages are being squeezed in a pincer movement – bear an unsufferable tax burden when (1) war profits are enormous; (2) incomes in six figures are not taxed enough; (3) the hundreds of billions, accumulated by the Morgans, Rockefellers, Fords, Mellons, duPonts from labor’s sweat, are not taxed at all, except for local realty taxes.

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