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Gertrude Shaw

Congress Out to Soak Workers with 10% Sales Tax

New Tax Plan Is a Wage Cut for All Labor

(1 November 1943)

From Labor Action, Vol. 7 No. 49, 1 November 1943, p. 2.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

There are more ways of cutting wages than by the direct method of cutting wage rates.

Every time prices go up ten points real wages do down ten points. High prices are a wage cut. And there is no roll-back in sight.

Also, every worker sees in his pay envelope that the income taxes he is now paying are an actual monetary wage cut. In addition, to the extent that bond-buying is compulsory, this too is equivalent to an income slash in the sense that the worker cannot use that money for his immediate needs.

These are huge slices right out of a worker’s pay.

But now there is the threat of a ten per cent sales tax – which can mean nothing else but a brand new ten per cent wage cut on top of all the rest.

This new burden is being pushed onto the working people because the Administration wants to raise for war financing $10,500,000,000 more taxes in 1944 than this year – and big business. Wall Street, America’s “Sixty Families,” the rich, want you and me to pay most of that $10,500,000,000.

The National Association of Manufacturers has made it clear to its political servants in Congress that the NAM “believes fiscal and tax policies should be adopted that will ... encourage the system of free enterprise.” That is the way the capitalist class says: “Hands off our war profits!”

Both Republican and Democratic politicians now considering the tax question in the House Ways and Means Committee, hear their masters’ voice.

Thus the committee has rejected the idea of increasing individual income tax rates on higher income brackets. It has likewise refused to raise estate and gift taxes.

It has no intention of increasing corporation taxes and even balks at stepping up excess profits taxes.

But the committee did retain a three per cent victory tax on the incomes of nine million families who earn so little that they do not come within the income-tax-paying brackets.

The Associated Press reported from Washington on October 25:

“Without the adoption of a federal retail tales tax or some other new levy there appears very little likelihood the new revenue bill now being drafted would provide more than $2,000,000,000.”

That leaves $8,500,000,000 of the $10,500,000,000 that the Administration wants to prosecute the war. With the exception of on increased liquor tax and other small items, “some other new levy” is just talk.

The big boys are out for that ten per cent “federal retail soles tax.” They are out for another ten per cent slash in the buying dollar of the people.

And they are not all Republicans on the House Committee which is so willing to take $8,500,000,000 more out of workers’ wages. Chairman Doughton is a Democrat. Representative Robertson, chief advocate of the sales tax, is also a Democrat.

The propaganda batteries of big business have, of course, opened up a ceaseless barrage to get public opinion “used” to the idea of a steep sales tax. The main argument – if it can be called that – is that a sales tax will “retard inflation.”

When big business reaches into the workers’ pockets, it uses “inflation” as its excuse.

This new attack on wages in the form of a sales tax must be fought by labor with all it has. It is not enough for Murray and Green to “lobby” in Washington. That method has won little for labor.

Labor can really take vigorous and telling action against the sales tax. The unions are in a position to expose it as the scheme of big business to duck taxes and pass them on to the people.

Furthermore, the rank and file of organized labor can hold public meetings to protest the passage of the sales tax and bring into the fight all the common people who will suffer from it.

Labor’s tax fight needs to go beyond the mere aim of defeating the sales tax.

The existing tax load is already unjust and unwarranted. It should be lifted from labor’s back.

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