Good Reads

Who Pays War’s Price?

During World Wars I and II, lawmakers asked all Americans, even the rich, to sacrifice. Here in the 21st century, the rich get tax breaks during war-time. What happened?

By Sam Pizzigati

Health, Luck, and JusticeSteven Bank, Kirk Stark, and Joseph Thorndike, War and Taxes. Washington, D.C.: Urban Institute Press, 2008. 224 pp.

Over the past half-dozen years, over 4,000 Americans have lost their lives in a foreign war that has cost at least a half-trillion dollars. Over that same span of time, President George W. Bush has engineered a series of tax cuts that have sharply reduced federal revenues.

This wartime tax cutting, declares this new survey of U.S. wartime tax policy, “has no precedent in American history.”

Most Americans today probably don’t know that. They don’t know that America’s wealthy, in every major American conflict from the Revolutionary War through Vietnam, have had to sacrifice at least a portion of their hefty incomes or wealth to help finance the war effort.

In War and Taxes, unfortunately, co-authors Joseph Thorndike from the University of Virginia and Steven Bank and Kirk Stark from UCLA focus much more on “wartime opposition to increased taxes” than the struggles past generations have waged to make sure, as President Franklin Roosevelt put it, that “the few do not gain from the sacrifices of the many.”

One example: War and Taxes details business opposition to excess profits taxation during World War I but makes no mention of the “American Committee on War Finance,” a grassroots campaign that spent 1917 mobilizing support for a 100 percent tax on all individual income over $100,000.

Campaigns like this effort paved the way for the “soak the rich” tax policies put in place during World Wars I and II. During World War I, the federal tax rate on income in the highest tax bracket soared to 77 percent tax. In World War II, the top-bracket rate reached 94 percent. Our current top rate: 35 percent.

What explains this enormous sacrifice gap? War and Taxes never adequately confronts this basic question. George Bush could get away with cutting taxes in wartime, the authors suggest, because “historically low inflation rates, a political environment that has marginalized deficit concerns, and the elimination of the draft” have more or less “transformed the politics of wartime taxation.”

But none of these factors speak to a much more compelling difference between the first half of the 20th century and our contemporary politics: the presence then — and the absence now — of strong progressive movements that explicitly challenged plutocratic power.

These movements didn’t have, right before World Wars I and II, enough strength to “soak the rich.” But wars throw the wealthy off stride. They create new political possibilities. Well-organized progressives in World War I and World War II were able to seize those opportunities.

Just how did they do that? That history remains to be written.

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