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December 2nd, 2017 
Awake Goy Republican and Democratic leaders in Congress had no such fears. The heat they felt came from newspaper publisher William Randolph Hearst, the powerful media magnate who had emerged as the national sales tax notion’s most fervent advocate.
Hearst had no particular philosophical affection for taxing sales. Neither did any of his fellow wealthy Americans. They simply wanted Congress to put in place an alternative to taxing income. Their income. Americans, Hearst wrote in a nationally circulated March 1932 editorial, must “carry on a sustained crusade Morning, Evening, and Sunday against the present Bolshevist system of income taxation.”
The Democratic Party majority on the House Ways and Means Committee would obediently oblige. Lawmakers on the panel repudiated the Hoover administration and nixed any income tax hike. They passed instead an almost all-encompassing national sales tax, a 2.25 percent manufacturer’s excise levy on everything but food.
What happened next would floor top Democrats and their calculated bid to position the party as a reliable partner for America’s rich and powerful. Powerful Democrats — like the Wall Street financier Jacob Raskob — had simply gone too far. Americans would push back. They would mount the first national political surge against plutocracy since the Great Depression began.
The surge broke out almost as a matter of spontaneous political combustion. From across the nation, average Americans began bombarding congressional offices with angry complaints about the pending new national sales tax. In the face of this surprise bombardment, rank-and-file Democrats in Congress would suddenly rediscover their inner displeasure at America’s staggering concentration of income and wealth. They would join with Representative Fiorello LaGuardia from New York and other progressive House Republicans to kill the national sales tax by a stunning 223-153 margin.
Amid shouts of “soak the rich!” on the House floor, this unexpected majority would go on to raise the top tax rate from 25 percent on income over $100,000 to 63 percent on income over $1 million. The new higher tax rates, notes tax historian Elliot Brownlee, would double the effective tax burden on America’s richest 1 percent.
House Democratic majority leader Henry Rainey would not be happy about any of this.
“We have made a longer step in the direction of communism,” he told his House colleagues, “than any country in the world ever made except Russia.”
But Rainey remained above all else a savvy politician. He saw clearly that Americans overwhelmingly supported higher taxes on the nation’s wealthy, and now he would make the best of a bad situation. The evening after the crushing defeat of the sales tax proposition, he would go live on national radio and position the new taxes on the rich as a fiscally prudent step toward balancing the federal budget. He would also do his best to convince Americans that the rich had now sacrificed quite enough.
Lawmakers in the House, Rainey told the nation, have raised income taxes on the wealthy “to the very breaking point.” Even “the most violent advocate of ‘soaking the rich’ ought to be satisfied,” the Democratic majority leader would pronounce.
“We have ‘soaked the rich,’ I assure you,” Rainey would repeat for emphasis at the close of his radio address.
In fact, the soaking had been more a quick rinse. Taxes on the nation’s wealthy would remain, even after the increases, substantially lower than top rates in effect during World War I. The bulk of the tax dollars the new revenue legislation would raise would come from new and increased excise taxes, some on luxury items like furs but most on everyday items like chewing gum and lubricating oil.
Even so, the 1932 tax fight did mark a turning point. The rich and their political enablers had reached for the brass ring, a national sales tax. The American people had slapped them down.
In Albany, the state capital of New York, an ambitious governor took notice. Just two weeks after the tax brouhaha in Washington, Franklin D. Roosevelt, a leading candidate for the 1932 Democratic Party nomination, would begin a remarkable series of addresses that aligned his candidacy four-square with America’s grassroots push against plutocracy.
The first of these addresses, broadcast April 7 in NBC’s Lucky Strike Hour, would champion the “forgotten man at the bottom of the economic pyramid” and blast away at political leaders who “can think in terms only of the top of the social and economic structure.”
The next month, at a commencement address at Georgia’s Oglethorpe University, Roosevelt would deliver a stirring call for “bold, persistent experimentation” to aid the “millions who are in want.”
“Do what we may have to do to inject life into our ailing economic order,” the Presidential hopeful would explain, “we cannot make it endure for long unless we can bring about a wiser, more equitable distribution of the national income.”
The New Deal had begun.
Could a defeat of the GOP tax plans of 2017 signal a similar new egalitarian upsurge? Maybe. But first we have to deliver that defeat.
Source Article from https://popularresistance.org/the-unpredictable-consequences-of-the-republican-tax-plan/
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