Shared Sacrifice, Shared Glory

Sam Pizzigati

May 28, 2004

It's true: During World War II, there was 94 percent marginal income tax rate. And what's more, the president had originally proposed a 100 percent tax rate. In those days, everyone made contributions for the war, and the wealthy made the biggest ones. Labor journalist Sam Pizzigati argues that this shared sacrifice from the top down helped define the "Greatest Generation" and pulled the country—including the elites—together in wartime.

Sam Pizzigati is editor of Too Much, a newsletter devoted to capping excessive income and wealth. His new book, Greed and Good: Understanding and Overcoming the Inequality That Limits Our Lives, will be published in July. He can be reached at editor@toomuchonline.org.

On Memorial Day, we honor soldiers. Not this year. We will honor, this holiday weekend, an entire generation.

This generation now has its own monument, the new National World War II Memorial. The 16.1 million Americans in uniform who fought—and won—World War II didn’t win the war alone, the new monument’s creators remind us. They had help from the home front. Housewives pounded rivets. Kids collected aluminum. Families went without staples at the dinner table. During World War II, everyone seemed to be making contributions. Everyone, at some level, seemed to be making sacrifices.

Even the rich. All Americans were asked to pay more in taxes during World War II, and the wealthy were asked to pay the most of all, more in taxes than any Americans had ever before paid. In 1943, America’s most affluent households faced a 93 percent tax rate on all their income over $200,000. The next year, 1944, the nation’s top tax rate would rise even higher, to 94 percent on income over $200,000—the highest rate in American history.

A 94 percent tax? We scan this figure today with no small measure of disbelief. We who live in an era where politicos routinely equate taxes with tyranny cannot imagine a Congress of the United States ever imposing a tax rate so lofty. But here’s the truly incredible part. Back during World War II, many Americans, including the president of the United States, wanted our nation’s top tax rate to rise even higher.

How high? In 1942, only a few months after Pearl Harbor, President Franklin D. Roosevelt proposed a 100 percent top marginal tax rate. At a time of “grave national danger,” the president advised that April, “no American citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year. Roosevelt was proposing, in effect, what amounted to a maximum wage—at an income level that would equal, in our contemporary dollars, about $300,000.

Imagine, for a moment, what would happen today if John Kerry—suddenly inspired by FDR’s bold example—were to propose a 100 percent tax on income over $300,000 to help wage the war against terrorism. Kerry would be hooted off the political stage, maybe even tagged a terrorist himself for trying to disrupt and destroy the American economy.

FDR's 1942 income cap proposal, interestingly, invoked no such feverish reaction. The nation, most Americans agreed, faced an emergency. All Americans needed to do their part. Some Americans were sacrificing their lives to stop fascism. The least the rich could do, as even some rich Americans agreed, was sacrifice some fortune.

"I regret," announced Hollywood starlet Ann Sheridan, “that I have only one salary to give for my country.”

The opposition to FDR’s income cap proposal would go about its business behind the scenes. The mandarins on the House Ways and Means Committee would quietly refuse to give the president’s cap any serious consideration. But Roosevelt would not be deterred. Shortly after Labor Day, he repeated his call for a $25,000 income limit, “the only practical way of preventing the incomes and profits of individuals and corporations from getting too high.” Congress would eventually relent and tilt in the president’s direction. The Revenue Act of 1942 would leave America’s most fortunate paying taxes on income over $200,000 at a tax rate well over 90 percent. The war years would go on to become, notes historian John Witte, “the most progressive tax years in U.S. history.”

Today, by contrast, we are waging a war amid what have become the least progressive tax years in modern U.S. history. Pulitzer Prize-winning tax analyst David Cay Johnston estimates that our nation’s wealthiest households are now paying federal income taxes at a mere 17.5 percent rate, after exploiting all available loopholes. America’s richest households in 1943, after exploiting all available loopholes, paid nearly 78 percent of their total incomes in federal tax.

Americans during World War II, in other words, expected wealthy households to pay more than four times as much of their incomes in wartime taxes as we do today.

Those World War II Americans were onto something. High tax rates on high incomes do not, of course, insure war-time victory, either against fascism or terrorism. But high rates on high incomes do send a message. High rates announce in no uncertain terms that sacrifice will be universal, that all Americans—even our highest and mightiest—will be expected to do their part, to give of themselves in some way that counts.

In World War II, Americans did give of themselves, at the battlefield and on the homefront. Those who made that effort we now honor. Sixty years from today, will our grandchildren honor us? Will they stand in awe of our common spirit, our unstinting sacrifices to create a world where peace and justice reign? That hardly seems likely.

At the new World War II Memorial dedication, the American Battle Monuments Commission will be asking us to celebrate the “high moral purpose and idealism” of an entire generation. We ought to do that honoring not just by cheering, but by remembering. We ought to be remembering just how the “Greatest Generation” became great. Our parents and grandparents shared sacrifice, from the top down. We should, too.