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Gertrude Shaw

Congress Eases Taxes on Rich

Who Will Pay Ten Billion?

(27 December 1943)

From Labor Action, Vol. 7 No. 52, 27 December 1943, pp. 1 & 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

Secretary of the Treasury Morgenthau wants $10,500,000,000 more taxes in the year 1944 than were collected in the year 1943.

The tax bill recently approved by the House of Representatives provides for only $2,240,000,000 additional taxes. The bill just agreed on by the Senate Finance Committee would add $2,384,000,000 to 1943 taxes.

The Threatened Sales Tax

When the House was discussing taxes, a general sales tax was considered a possibility, and the capitalist press was jubilant at the prospect of the working people paying that $10,500,000,000 on top of what they are already paying – and can ill afford.

When the matter came before the Senate, Mr. Morgenthau appeared and assured the members of the Senate Finance Committee that he still wants that $10,500,000,000 above present taxes. He also stated that he is not exactly opposed to a sales tax, though he would prefer to raise the revenue some other way.

However, talk about the sales tax has died down. And it is not because the capitalists and their politicians have suddenly acquired the milk of human kindness toward the working people. It is because organized labor has put on its fighting mitts. Labor is demanding some relief from the burdens of war so heavily piled on it, as evidenced in the widespread demands for higher wages. With elections coming, Congress does not dare now to put more fuel on the smoldering fire of labor discontent by passing a sales tax.

Yet, to the extent that Congress did try to raise more taxes for 1944, the bills of both the House and Senate represent in the main another raid on the little man.

Another Squeeze

The House bill increases the normal income tax from six to ten per cent, proposes repeal of the five per cent Victory tax, but imposes a three per cent special tax on the nine million workers making up the low income group. The Senate bill does not increase the normal tax and favors the continuance of the Victory tax for all groups at the reduced rate of three per cent.

But this leniency is a mirage. The Senate bill disallows the post-war refund of any part of the Victory tax. And both bills don’t, let you deduct that ten per cent credit for earned income nor do they let you,take anything off for the innumerable taxes you pay on entertainment, services and commodities. So that the two per cent reduction in the Victory tax in, the Senate bill is made up for with a vengeance.

Of the innumerable taxes you pay on entertainment, services and commodities, there will be more and heavier levies in many cases.

Furthermore, both bills contain a weapon against organized labor. They Would require labor unions to file financial statements with the Treasury Department. Though the unions would still be tax exempt, to make public the financial strength of unions is to make known to labor’s enemies – if they want the information – what the fighting resources of unions are.

Lenient to the Rich

In contrast to the way the House and Senate bills lay it on where it can be least borne, they are very nice indeed to the rich corporations. They make a gesture of taking more from big business by increasing the excess profits tax from ninety to ninety-five per cent. But the methods of calculating excess profits taxes make this a mere nothing. The important thing is the basic corporation tax. This was not touched. The fact that this year big business will make $8,600,000,000 in war profits, AFTER DEDUCTING ALL TAXES and other deductibles, did not make any difference to the congressional tax makers.

Furthermore, the Senate bill makes sure that in the renegotiation of war contracts, the big corporations be given every possible credit for taxes and every benefit of every doubt – including the exemption from renegotiation of “standard products.”

When the tax question was before the House Ways and Means Committee, eight organizations, including the CIO, the Railroad Brotherhoods, the National Farmers Union, and others, presented a list of tax demands. They included the following:

This tax program of the CIO, the Brotherhoods and other workers’ organizations has many good points. However, just why should the little man earning less than $3,000 a year pay any taxes at all, with big business making a war profit haul of $8,600,000,000 in 1943? In view of such tremendous war profits, why should any working man or woman, who needs every cent of earnings to live on, pay war taxes?

Labor Action and the Workers Party agree with all tax demands which would make the rich pay for the war, but we go further and say that, in all justice, the working people should not pay any war taxes at all. Let there be, besides the limit of $35,000 on salaries, a 100 per cent tax on war profits – no profits out of the holocaust of war. If that doesn’t suffice, let the government put a capital tax on the huge fortunes of America’s “Sixty Families” – this is wealth of which the American working class has already been robbed.

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