Eisenhower-Era Marxist-Confiscatory Taxation: Requiem for the Rhetoric of Rate Reduction for the Rich
137 Pages Posted: 29 Dec 2012
Date Written: 1996
The Right's renewed agitation for liquidation of progressive income taxation in the United States prompts reexamination of its deservedly obscure predecessors’ arguments during the period between the Roosevelt and Reagan Administrations. Attention focuses on the extent to which businessmen’s rhetorical struggle against the New Deal survived into the post-World War II period. Such ideological sediments help explain how the Right has been able to resurrect the conservative fiscal theology of the 1880s and 1920s during the 1980s and 1990s by availing itself of a discourse that was muted but never disappeared during the early post-World War II era. The historical account shows that today’s anti-progressive-tax rhetoric embodies no analytical or social policy advances over earlier, cruder variants. The history begins with an exploration of why, despite capital’s prediction of the dire consequences of the continued imposition of wartime “confiscatory” taxes on the rich, the Eisenhower Administration and Republican-controlled Congress failed to reduce the rates in the Internal Revenue Code of 1954. The analysis proceeds to an empirical dissection of widespread claims that high and progressive rates were enforced and impoverished the rich. Then a forgotten episode in the history of anti-progressive taxation is disinterred — the intersection of a constitutional movement to cap income tax rates at 25 percent and a more general attack on progressive taxation as the outgrowth of a Marxist conspiracy. The focus then shifts to the seemingly counterintuitive phenomenon that the liberal Democratic Kennedy-Johnson Administration, rather than the big-business Republican Eisenhower Administration, took up Andrew Mellon’s mission by initiating the process of lowering the highest rates. As an offshoot of this rate-reduction strategy, the rhetoric in support of tax preferences for highly compensated corporate executives is scrutinized. As a counterpoint to current congressional propaganda in favor of more regressive modes of taxation, the Article concludes with an empirical overview of the possibilities and limits of progressive income taxation.
Keywords: progressive income taxation, Eisenhower administration, Kennedy administration, Andrew Mellon, Karl Marx, Internal Revenue Code of 1954
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