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1932 › Franklin D. Roosevelt (Democratic) › Income and inheritance tax progressivity

Raise revenue by graduated income, inheritance and profits taxes, not taxes on necessities

pledge_forwarddirectional_stancecandidate_directevidence A Economy & Fiscal PolicyTaxation similar solutions · similar reasoning

Solution

Taxation "on the principle of ability to pay": graduated income, inheritance and profits taxes; oppose taxes on food and clothing that fall on consumers per capita.

Rationale

Consumption taxes shift the burden to consumers of necessities regardless of income; in the 1920s the Republicans repealed taxes on abnormal profits and incomes so the war debt was not reduced.

Statements (1)

1932-07-30 · Radio address from Albany on the Democratic platform · generalcandidate_direct ✓ verified

This is a declaration in favor of graduated income, inheritance and profits taxes, and against taxes on food and clothing, whose burden is actually shifted to the consumers of these necessities of life on a per capita basis rather than on the basis of the relative size of personal incomes.

Source: Radio Address on the National Democratic Platform From Albany, New York (1932-07-30)

Follow-through

partial

1933 relied on consumption taxes (beer tax, NIRA reemployment excises, AAA processing tax) contrary to the pledge; the 1935 Revenue Act raised top surtaxes, estate and corporate taxes but was diluted; the 1936 undistributed-profits tax followed. Progressive in direction, regressive in the first years.

Mechanisms

Date	Type	Name	Effect	Consistent?	Source
1933-06-16	statute	NIRA reemployment taxes charted on: Federal surplus or deficit (fiscal year) · Gross domestic product (nominal, annual) · Unemployment rate (BLS, 1948–) · Unemployment rate (NBER series, 1929–1942)	Financed public works by excises, pending repeal revenues. Careful estimates indicate that at least $220,000,000 of additional revenue will be required to service the contemplated borrowings of the Government. This will of necessity involve some form or forms of new taxation.	no	Message to Congress Recommending Enactment of the National Industrial Recovery Act.
1935-08-30	statute	Revenue Act of 1935 charted on: Federal surplus or deficit (fiscal year) · Gross domestic product (nominal, annual) · Unemployment rate (BLS, 1948–) · Unemployment rate (NBER series, 1929–1942)	Higher surtaxes on incomes over $50,000, graduated corporate tax, estate tax increases.	yes	Franklin D. Roosevelt: Domestic Affairs \| Miller Center

Obstruction

congress Congressional conservatives diluted the 1935 wealth tax. source

Assessments

partial William E. Leuchtenburg — Franklin D. Roosevelt: Domestic Affairs | Miller Center

The redistributive 1935 bill was watered down by conservatives in Congress.

Conservatives in Congress, however, watered down the proposal considerably.

Other positions on this issue

Steeply increased income and inheritance taxes — Norman Thomas, 1932 directional_stance
Defense of the undistributed-profits tax as a loophole-closer; correct imperfections if found — Franklin D. Roosevelt, 1936 specific_pledge
Taxes levied according to ability to pay; lower taxes for 99 percent, higher at the top — Franklin D. Roosevelt, 1936 directional_stance

1932-fdr-taxation-ability-to-pay · created by claude-fable-5-1 · review: unreviewed