1942 (or 1765 before GST)

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33 Responses to 1942 (or 1765 before GST)

  1. RobK

    I wonder what various state taxes were then compared to now.

  2. Fred

    My history is a little shaky, but wasn’t there a war on or something?

  3. Roger

    Meanwhile, in 2018, the US government spent $371 billion to service its debt.

    That’s $39 billion more than it spent to cover ALL its expenditures in 1975.

  4. My history is a little shaky, but wasn’t there a war on or something?

    Which war? WW2? The war on poverty? The war on drugs? The war on waste? The war on wars?

    A war footing is always a good reason to have big government. Much like Australia’s war on climate change and war on inequality and war on …..

  5. Fred

    Again, my memory is a little shaky, but in 1942 wasn’t there a bit of a kerfuffle in Europe. Hadn’t Japan annexed parts of Asia. Didn’t America have a Lend-Lease program going on. Providing equipment worth hundreds of billions of dollars (in today’s money) to their allies.

    It was all a convenient ruse to bring on big government.

  6. Adam D

    My history is shaky as well Fred – did the war not end?

  7. Fred

    Yes it did, in 1945. So a government in 1945 should have cut taxes.

    But that’s hardly an argument against increasing revenue in 1942, unless you fall into the Lindbergh camp.

  8. Bruce of Newcastle

    Wars seem like good excuses to raise taxes.
    How about when a war starts we send all people raised taxes for the last war to fight the new war?

  9. RobK

    Korea 50-53, Vietnam 55-75 then what?

  10. max

    The American Revolution Was a Mistake
    By Gary North
    July 4, 2011

    I do not celebrate the fourth of July. This goes back to a term paper I wrote in graduate school. It was on colonial taxation in the British North American colonies in 1775. Not counting local taxation, I discovered that the total burden of British imperial taxation was about 1% of national income. It may have been as high as 2.5% in the southern colonies.

    The colonists had a sweet deal in 1775. Great Britain was the second freest nation on earth. Switzerland was probably the most free nation, but I would be hard-pressed to identify any other nation in 1775 that was ahead of Great Britain. And in Great Britain’s Empire, the colonists were by far the freest.

    I will say it, loud and clear: the freest society on earth in 1775 was British North America, with the exception of the slave system. Anyone who was not a slave had incomparable freedom.

    So, as a result of the American Revolution, the tax burden tripled.

    The debt burden soared as soon as the Revolution began. Monetary inflation wiped out the currency system. Price controls in 1777 produced the debacle of Valley Forge.

    The proponents of independence invoked British tyranny in North America. There was no British tyranny, and surely not in North America.

    https://www.lewrockwell.com/2011/07/gary-north/the-american-revolution-was-a-mistake/

  11. RobK

    Korea 50-53, Vietnam 55-75 then what?
    The cold war 45-90? Are we seeing the cost of the cold war’s military industrial complex and the new deal expenditure.

  12. I’d quote the great Milt Friedman but this was probably meant to be permanent.

  13. Pyrmonter

    @ Frank

    A man to whom the development of withholding taxes has been attributed.

  14. Tel

    The proponents of independence invoked British tyranny in North America. There was no British tyranny, and surely not in North America.

    Americans were forced to pay for the Seven Years War, not only in treasure, but they also had to send recruits to pay in blood.

    http://www.taxhistory.org/www/website.nsf/Web/THM1756

    There was a slow and steady cranking of tax collection which finally drove the Americans to revolution. It was of course, low by today’s standards, but still pissed a lot of people off. I would generally avoid using Gary North as your first historical source.

  15. max

    Canadians will not be celebrating the Fourth of July. This may have something to do with the fact that in December 1775, the United States of America, which did not actually exist yet, sent two invading armies into Quebec, which was French Canada, in the hope that they could persuade the French to secede. George Washington thought this was a good idea. It made perfect sense politically, because the American Revolution grew out of the taxes imposed by the British government to pay for the debts it had incurred during the French and Indian War, which had led to the surrender of Quebec to the British by the French government in 1763. That war was started by George Washington in 1754 at the Battle of Jumonville Glen.
    The invasion was a failure. It was led by Benedict Arnold. Anyway, half of it was. His half was a strategic disaster.
    Americans regard Benedict Arnold as a traitor. So do Canadians. Americans see him as a traitor because he switched sides. So do Canadians.
    This is why the Fourth of July is not a holiday in Canada. It is merely July 4.
    The Fourth of July was all about war and secession. It is all about avoiding tyranny at the hands of the British. You know. The way Canada suffered.

    https://www.garynorth.com/public/11200.cfm

  16. Julian the deplorable

    I actually think they increased the top marginal tax rate to 100% on incomes over $250,000 (in 1940’s dollars).

  17. max

    Gary North:

    The Battle of Jumonville Glen is unknown to all historians except specialists in colonial America. This is a pity, because that battle was the most important military event in the history of the modern world. It literally launched the modern world. It led to (1) the French & Indian War (Seven Years’ War), (2) the Stamp Act crisis, (3) the American Revolution, (4) the French Revolution, (5) Napoleon, (6) nationalism, (7) modern revolutionism, (8) Communism, (9) Fascism, and (10) the American Empire. It was started by Virginia militia Major George Washington, age 22.

  18. The Battle of Jumonville Glen is unknown to all historians except specialists in colonial America. This is a pity, because that battle was the most important military event in the history of the modern world. It literally launched the modern world. It led to (1) the French & Indian War (Seven Years’ War), (2) the Stamp Act crisis, (3) the American Revolution, (4) the French Revolution, (5) Napoleon, (6) nationalism, (7) modern revolutionism, (8) Communism, (9) Fascism, and (10) the American Empire. It was started by Virginia militia Major George Washington, age 22.

    Bullshit. King Edward II also queefed during anal sex, did it cause a localised weather pattern that in turn led to unseasonally high rains in 1315 and the great famine…and Hitler?

  19. max

    Shorn on the Fourth of July
    By Gary North
    July 4, 2007

    “NO TAXATION WITHOUT REPRESENTATION!”

    American school children have memorized this political slogan for a hundred years. But where did it come from? From textbook writers. Nobody ever went into print with this phrase in colonial America.

    Linking taxation to representation goes back to the Magna Carta of 1215. The connection regained public attention as a result of the Stamp Act crisis of 1765—66.

    The British in 1763 had signed a treaty with France settling the Seven Years War, which was called the French and Indian War in the colonies. This war had drained the treasuries of both countries.

    The name of the war is incorrect. It refers to the dates of the official hostilities: 1756—63. It should be called the Nine Years War, because it began, not in 1756, but in 1754. It began on May 28, when an inexperienced 22-year-old Virginia militia officer led about thirty-five troops in an unprovoked surprise attack on a small group of Frenchmen commanded by Ensign Joseph Coulon de Villiers de Jumonville. The battle is called the Battle of Jumonville Glen. It took place in Western Pennsylvania.

    The previous year, the militia’s commander had established an alliance with a village of Seneca Indians. He consulted with their leader the day before the attack. The Indian had encouraged him to strike first, without warning, which he did the next morning. The French lost the skirmish. Nine were killed; 21 were captured. Thirteen were wounded, but the group of about eight Indians without warning killed them. The Virginian met with the wounded French commander to discuss the terms of surrender. Before he could formally surrender, the Indians’ leader smashed his skull with a tomahawk.

    France and England had not been at war. This was the opening salvo.

    Another 400 men soon arrived. This was not enough. He surrendered on July 3 to a French and Indian force of 600 French and 100 Indians. As a condition of his troops’ release, he signed a document admitting that the French commander had been assassinated while surrendering to him. The French word was “l’assassignat,” which the young officer later said he thought meant “killing.”

    The officer was Lt. Col. George Washington.

    And the war came.

    As a result of the war, which was mostly a naval battle for control over the West Indies, the French surrendered their claims to territory in North America, but not to the British. In 1762, France had surrendered its territory to its ally, Spain. When Napoleon defeated Spain four decades later, France got this territory back, which he sold to the United States.

    The French after 1763 were no longer a threat to the colonists. So, the immediate benefits of having British troops stationed in the colonies fell rapidly. “What have you done for us lately?”

    Then, in 1765, the British Parliament imposed a small tax on colonial paper. Official transactions had to be printed on taxed paper. So did newspapers. So did playing cards. The paper had to receive an official government stamp from tax collectors sent to the colonies.

    This, I would argue, was the most shortsighted political decision of the British Parliament in the eighteenth century. The tax alienated three groups: lawyers, newspaper publishers, and card players.

    The media response was immediate. “We shall not submit to such tyranny!”

    Tax collectors were chased out of town, tarred and feathered by mobs, and otherwise treated in ways that would get you sent to jail for ten years today.

    It was a widespread tax revolt. Most colonists decided that they were not going to pay. The problem was, they needed plausible excuses not to pay, other than the real ones: “We have been manipulated into mob action by lawyers and the media, and we love to play cards.”

    So, they invented some arguments. This was the main one: “The British Empire cannot lawfully impose internal taxes. It can lawfully impose only external taxes, such as on trade.” This was a very good argument, because it meant that smugglers would have to be tried in colonial courts, and juries would not convict.

    https://www.lewrockwell.com/2007/07/gary-north/shorn-on-the-4th-of-july/

  20. max

    CONCLUSION

    When the textbook writers coined the phrase, “No taxation without representation,” they baptized its opposite: “Taxation with representation.”

    I am willing to make a deal with the Internal Revenue Service. I’ll give up my right to vote in U.S. elections if the Federal government will cut my taxes to 1%.

    I’ll even pay 2.5%, because I live in the South.

    How about you?

  21. Zatara

    So, as a result of the American Revolution, the tax burden tripled.

    Bullshit again. There was no personal income tax in the US until the Civil War, a century after the revolution. The income tax was then abolished after the Civil War and wasn’t reinstated until the ‘progressive’ Democrat Wilson did in it 1913 to pay for all his social giveaway programs.

  22. Zatara

    Korea 50-53, Vietnam 55-75 then what?

    Johnson’s “Great Society.” A huge explosion in the size of the federal government and its extremely expensive, destructive, and invasive social programs

    Virtually every political battle that rages today has roots in the federal expansion and experimentation that began in the 1960s.

  23. max

    Zatara
    #2990634, posted on April 18, 2019 at 2:00 am
    So, as a result of the American Revolution, the tax burden tripled.

    Bullshit again.

    Zatara do you know that inflation is a tax.

    Our Continental Congress first authorized the printing of Continental notes in 1775. The Congress was warned against printing more and more of them. In a 1776 pamphlet, Pelatiah Webster, America’s first economist, told his fellow men that Continental currency might soon become worthless unless something was done to curb the further printing and issuance of this paper money.

    The people and the Congress refused to listen to his wise advice. With more and more paper money in circulation, consumers kept bidding up prices. Pork rose from 4¢ to 8¢ a pound. Beef soared from about 4¢ to 100 a pound. As one historian tells us, “By November, 1777, commodity prices were 480% above the prewar average.”

  24. Confused Old Misfit

    tax

    Define “tax”:

    A tax (from the Latin taxo) is a mandatory financial charge or some other type of levy imposed upon a taxpayer (an individual or other legal entity) by a governmental organization…

    1. A contribution for the support of a government required of persons, groups, or businesses within the domain of that government.
    2. A fee or dues levied on the members of an organization to meet its expenses.
    3. A burdensome or excessive demand; a strain.

    : a charge usually of money imposed by authority on persons or property for public purposes
    b : a sum levied on members of an organization to defray expenses
    2 : a heavy demand

    Nowhere can I find a reference to “inflation” as a “tax”.

  25. Nowhere can I find a reference to “inflation” as a “tax”.

    Guess what, a general dictionary doesn’t specialise in economics. You might read “a dictionary” literally and conclude that quantum physics is quite wrong (it isn’t).

    Tough luck, inflation is a tax.

    https://en.wikipedia.org/wiki/Seigniorage

    Australian currency and M1 growth since the 1996 Federal election: 6.24% and 6.41%. Inflation was not that high but if you held physical currency only, your depreciation probably exceeded the official inflation rate.

    The demonisation of George Washington is a little far fetched for me but to look at the American revolution with fresh eyes and ask if it led to a net increase or liberty or not is a good idea and a good habit to learn.

    The US Continental Currency collapsed. It is a great example why the crackpot MMT theory simply does not work.

  26. Confused Old Misfit

    IF you are considering that “inflation” is caused by government either adding a “seigniorage” cost to its cost of money production or by increasing the money supply relative to demand then I will grant you that.
    There are some that consider “inflation” to be an indicator of a deficiency in the supply side of the general market.
    That is to say, too much money chasing after too few goods.

    Nevertheless a “tax” is, in the common parlance of those of us in the hoi polloi, an imposition imposed on us by the governing authority for the reputed purpose of supplying goods and services for the common benefit but in actual fact it is to supply the governing authority with funds that are, allegedly, returned to us as “entitlements” or “credits” through the kindliness of that governing authority.
    That the funds reaped in the “tax” harvest were, are and remain ours is a concept that seems to have escaped, or has been surrendered, by a great many esteemed economists.

  27. Seignorage is taxation. Stop being salty about this.

    That the funds reaped in the “tax” harvest were, are and remain ours is a concept that seems to have escaped, or has been surrendered, by a great many esteemed economists.

    The government has no money – correct.

    However, the idea that we own the money once it is handed over is a nice sentiment, nothing more.

  28. max

    John Maynard Keynes was a crackpot, but even he occasionally said something right:

    Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.
    Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.

  29. max

    The tendency of taxpayers to revolt against high taxes causes tax collectors to try to hide the tax burden so that the taxpayer will hardly be aware of what is happening to him.

    Perhaps the most cleverly hid­den tax is inflation. When the na­tional government fails to cover its expenditures through taxes, it must borrow the difference, either from individuals or the central bank. If the latter, a multiple of that debt is likely to be added to the money supply, which is infla­tion. Inflation usually is accom­panied by rising prices and ero­sion of the purchasing power of the dollar. Since 1939, the dollar has lost about half of its purchas­ing power. This is a tax upon sav­ings, as truly a tax as any of the many other ways of raising rev­enue. From a political standpoint it has the advantage of being hid­den. Also, it is possible to make people believe that the cause of inflation is the raising of prices by greedy businessmen or of wages by labor unions.

  30. max

    the most insidious of all taxes — the inflation tax. Simply put, printing money to pay for federal spending dilutes the value of the dollar, which causes higher prices for goods and services. Inflation may be an indirect tax, but it is very real — the individuals who suffer most from cost of living increases certainly pay a “tax.”

  31. Confused Old Misfit

    By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.

    Not really. We DO notice!

    Seignorage is taxation. Stop being salty about this.

    Sure, when you start being a little (a lot?) more nuanced with your proclamations.

    …the idea that we own the money once it is handed over is a nice sentiment, nothing more.

    In the broadest definition of ownership is that he who controls or can direct the control of the resource, owns it. In this broad sense the citizens controls the use of the resource of money through their vote.

  32. There is no need for nuance. Inflation is a stealth tax.

    God knows why the hell you are arguing about this.

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