The Revenue Act of 1935 was one of the bills passed for the Second New Deal. Franklin Roosevelt wanted to make a fairer taxing system since the beginning of his presidency, and when Huey Long started advocating for a redistribution of wealth, Roosevelt decided to create his own bill. Huey Long said that it was unfair that the rich men had enough money to help countless numbers of people and kept it for themselves. FDR wanted to win over Long’s supporters by creating the Revenue Act, a bill that would harshly tax the wealthy elite. The bill proposed, higher rates on corporations, a tax on bonds, and another estates tax for the rich. FDR sent his bill to Congress and hoped for the best.
Congress wasn’t very keen on passing a bill that punished the rich this much. After nearly 2 months of debating, Roosevelt received a very toned down version of his Revenue Act bill. The bill took out many parts of Roosevelt’s plans, and ended up cutting down the proposed tax rates substantially. Without many other options, Roosevelt passed the Revenue Act in 1935.
Roosevelt received lots of reactions from many people. The bill made Roosevelt very hated among the wealthy elite. The rich thought that Roosevelt was trying to rob their power, and thus decided to evade these taxes. This led to more and more cases of tax evasion throughout America as the rich tried to retain their wealth. The Revenue Act had many loopholes, so in 1937, the government started to crack down on those who didn’t comply with the law. They revised tax laws and regulations for the American people.
The issue of tax rates between the rich and FDR is similar to what we see today. The rich argue that they shouldn’t have to give up most of their money, and there are groups which want the rich to have higher tax rates. However, the most recent tax bill that our president created has reduced the tax rate nationally for all tax brackets, especially the rich. It will be interesting to see the future tax rates based off of this choice, and see if they decrease more or increase.
Sources:
https://www.worldhistory.biz/modern-history/81729-revenue-act-of-1935.html
https://apps.irs.gov/app/understandingTaxes/student/whys_thm02_les05.jsp
I enjoyed reading your post, as I found the topic very interesting. However, I would like to point out that Wealth Tax introduced by the Revenue Act of 1935 taxed the highest incomes at a rate of up to 75%. In comparison, the highest tax bracket in 2018 (singles who earn more than 500,000 or couples who earn more than 600,000) is taxed at a rate of 37%. This shows how outrageous the act was.
ReplyDeleteSource: https://apps.irs.gov/app/understandingTaxes/student/whys_thm02_les05.jsp