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1936 › Franklin D. Roosevelt (Democratic) › Income and inheritance tax progressivity
Taxes levied according to ability to pay; lower taxes for 99 percent, higher at the top
pledge_forwarddirectional_stancecandidate_directevidence A Taxation similar solutions · similar reasoning
Solution
Keep the 1935-36 structure: earned-income credit, lower rates for small corporations, higher surtaxes over $50,000 and $1 million, higher estate taxes; reduce hidden consumption taxes.
Rationale
'Democracy in taxation' is the 1776 fight; the previous administration cut taxes for its friends and 'left the national debt to be paid by later generations.'
Statements (2)
Here is my principle: Taxes shall be levied according to ability to pay. That is the only American principle.
Taxes are higher for those who can afford to pay high taxes. They are lower for those who can afford to pay less. That is getting back again to the American principle--taxation according to ability to pay.
Follow-through
partialcontested among sources
The Revenue Act of 1937 closed personal-holding-company and other loopholes after the tax-evasion message; but the Revenue Act of 1938 (allowed to become law without signature) cut capital-gains rates and gutted the undistributed-profits tax, which the 1939 Act repealed. Rates on the top brackets were not cut.
Mechanisms
| Date | Type | Name | Effect | Consistent? | Source |
|---|---|---|---|---|---|
| 1937-06-01 | message | Message on tax evasion prevention charted on: Federal surplus or deficit (fiscal year) | Led to the Revenue Act of 1937 loophole closures. | yes | Message to Congress on Tax Evasion Prevention. |
| 1937-08-26 | statute | Revenue Act of 1937 charted on: Federal surplus or deficit (fiscal year) | Personal holding company and foreign-corporation loopholes closed. | yes | Revenue Act of 1937 - Wikipedia |
| 1938-05-28 | statute | Revenue Act of 1938 (became law without signature) charted on: Federal surplus or deficit (fiscal year) | Capital gains relief for the wealthy; undistributed-profits tax reduced. | no | Undistributed profits tax - Wikipedia |
Obstruction
congress The conservative coalition rewrote the 1938 and 1939 revenue acts. source
Assessments
Congress, not the President, moved the structure away from ability-to-pay in 1938-39.
Other positions on this issue
- Raise revenue by graduated income, inheritance and profits taxes, not taxes on necessities — Franklin D. Roosevelt, 1932 directional_stance
- 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
1936-fdr-taxation-by-ability-to-pay · created by claude-fable-5-1 · review: unreviewed