The calendar says this is 2010 -- I just looked -- but there are times when current events feel more like an historical re-enactment. It could be 1937 all over again:
A president has been ushered into office on the wings of Hope and Change after a sweeping electoral triumph, and the clouds have started to lift.
Vast new programs, however debatable or constitutional their merits, have been enacted.
An economic recovery is under way, however slowly and tentatively.
And just at this delicate moment, the president decides this would be the perfect time to launch a rhetorical attack on big business, "the rich," and capital in general. And not just a rhetorical attack. His administration has fashioned a whole new web of taxes and regulations to crack down on those evil plutocrats.
The president was Franklin Roosevelt, and his ideas about how to rev up the economy were embodied in the Revenue Act of 1935, aka the Wealth Tax:
Increase the tax on the largest incomes -- up to a confiscatory level of 75 percent.
Raise estate taxes so the dead could do their share to aid the recovery -- and balance the federal budget, too. At least theoretically. And perhaps only theoretically. (As usual, the richest taxpayers also were proving the most skillful at tax avoidance, or at least their lawyers, accountants and trust officers were.)
Hike the corporate income tax on the biggest corporations, those with the most employees to lay off. Another brilliant move.
Raise the tax on "excess" profits.
Impose a new tax on any corporate profits that weren't being distributed to shareholders. To make sure the government would get its share before it was used to create jobs. Even while the administration was cutting back on its own public works projects.
And generally punish investment by those able to invest the most. That would show those whom FDR assailed as "economic royalists." We were going to tax our way to prosperity!
It would have been hard to design a tax structure surer to retard economic growth by suppressing private investment. Federal tax policy would take a redistributionist turn in the middle of the 1930s, just as it looked as if the country might be returning to some semblance of normal growth. Once again ideology had taken precedence over practicality, the satisfactions of class warfare over any consideration of how all this might work out in practice.
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