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Jack Ranger

Tapping the Wall St. Wire

A Tax-and-Debt-Ridden World

(8 November 1948)

From Labor Action, Vol 12 No. 45, 8 November 1948, p. 3.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

A picture of a debt-and-tax-ridden world such as has probably never before been seen in history emerges from figures compiled by a committee of U.S. government experts at the request of Congress. Capitalism, in the bare few centuries of its existence, has managed in every country to place a veritable Alp of debt and taxes upon the backs of every man, woman and child – not only those now living, but for generations to come. Most of the debt and taxation burdens are traceable directly to the hideous wars which accompany the capitalist system step by step down its bloody way to ruin.

This situation, according to the Institute of Life Insurance, from the long-run point of view has a direct bearing on the financial welfare and security of all the peoples of the world, now and for generations hence – their incomes and earning powers, their savings, their standards of living, and the whole structure of family life. (The Institute cannot conceive of a future freed from capitalism. – J.R.)

“The worldwide extent of the public debt and tax burden makes it a problem of the first magnitude for virtually all nations, large and small,” declares the institute. “The major cause of this situation is the war and its astronomical cost. Neutral nations have been severely affected as well as belligerents. The problem for a time showed signs of easing as public expenditures in various nations declined from the peaks with the end of the war, but government outlays, as in this country, are displaying a renewed uptrend due to the international situation.”

$1.00 out of every $4.00

The experts’ figures, which are for central governments only, and do not include state and local figures, compare the years 1936 and 1946. One measure of the burden is that in nearly a score of nations the tax burden in each one in 1946 was the equivalent of $1.00 or more out of every $4.00 of their national incomes in that year. In a few cases (including France) the 1946 tax burden was the equivalent of MORE THAN ONE-HALF the national income in that year.

The United States, which had been well down on the list before the Second World War, led all nations in the per capita tax burden in 1946 with $313. Russia was second with $297, and the United Kingdom third with $279.

In the public debt burden (which the taxes help to carry), the United States in 1946 was second only to Britain. The British public debt was the equivalent of $2,095 per capita, and that, of the U.S. $1,830 per capita. Canada was third with $1,365 per capita; Australia fourth, $845 per capita.

The Institute noted that in 1939 Germany led the world in the per capita tax burden with $157, equivalent to approximately $1.00 of every $3.00 of German national income in that year. Russia was in second place with $129 per capita. In contrast, the U.S. was in 15th place with a 1939 tax burden of $43 per capita, equivalent to approximately $1.00 out of every $13 of American national income in that year.

From 1939 to 1946 the per capita American tax burden increased over sevenfold, or far more than that of any other nation, and the per capita debt burden grew more than fivefold. The Institute noted that aggregate state and local taxes in the U.S. in 1946 were the equivalent of just under $80 per capita, or more than a fourth of the equivalent per capita federal government figures.

No one doubts that so long as capitalism exists the tax-and-debt burden will grow increasingly heavy.

Just consider this: In 1939 the total U.S. national budget was $8,700,000,000. In 1949, Dewey and Truman are agreed, the U.S. budget for war preparations along will reach $20,000,000,000, and the total budget more than twice that. Even allowing for the doubling of prices, one sees that the overhead costs of maintaining capitalism are mounting at a jet-propelled rate.

Preparations for the First Atomic War will wring higher taxes from the American workers. The slight tax cut permitted the masses as a sop in preparation for the 1948 elections, and as a bribe to hold back the drive for a new national labor party, will in all likelihood be withdrawn by the 81st Congress and even heavier taxes imposed. This will be a certainty if American and Russian imperialism fail to reconcile their current differences.

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