August 30 - Taxing the Rich

On this day in Labor History the years was 1935. 

That was the day that President Franklin Delano Roosevelt signed the Revenue Tax Act, more popularly known as the “Wealth Tax.” 

The act reformed the federal income tax to raise rates on the wealthiest in the nation.

Those making over $5 million could pay taxes up to seventy-five percent. 

In a speech to Congress that summer, Roosevelt had explained his thoughts on wealth and taxes. 

The President said,

“Wealth in the modern world does not come merely from individual effort;

it results from a combination of individual effort and of the manifold uses to which the community puts that effort.

The individual does not create the product of his industry with his own hands;

he utilizes the many processes and forces of mass production to meet the demands of a national and international market.

Therefore, in spite of the great importance in our national life of the efforts and ingenuity of unusual individuals,

the people in the mass have inevitably helped to make large fortunes possible.

Without mass cooperation great accumulations of wealth would 'be 'impossible save by unhealthy speculation.

As Andrew Carnegie put it, "Where wealth accrues honorably, the people are · always silent partners."

Whether it be wealth achieved through the cooperation of the entire community or riches gained by speculation—in either case the ownership of such wealth or riches represents a great public interest and a great ability to pay.” 

Although President Roosevelt tried to win over the nation's wealthy by quoting industrialist Andrew Carnegie, he did not gain their support. 

Not surprisingly many of the national’s wealthy lobbied for and used tax loopholes to evade paying the new rates.