from the Committee on Ministry and Counsel
The Victory Tax and What It Bought
by Marian Franz
Marian Franz, a Mennonite, served as Executive Director of the National Campaign for a Peace Tax Fund for 23 years. This piece was originally written as a column in the Peace Tax Fund Newsletter, Fall 1993, and was reprinted in A Persistent Voice: Marian Franz and Conscientious Objection to Military Taxation (2009).
This year is the 50th anniversary of the 1943 “Victory Tax.” This pay-as-you-earn tax on employees’ salaries made the employer a tax collector and was enacted to meet the costs of World War II. Let’s review the historic connection between war and taxes.
Only ten percent of the War of 1812 was funded by taxpayers. The rest came from borrowing and from the sale of public lands. When the war was over, so were the taxes.
The Civil War revived the Internal Revenue Service, as President Abraham Lincoln imposed the first tax on personal income. Military expenditures mounted to 95 percent of the federal budget. If you earned $800 or more, you paid three percent in taxes. Eight years after the war ended, so did the taxes.
World War I military expenditures soared to $35 billion. In 1913, the Sixteenth Amendment to the Constitution was deemed necessary to allow the government to impose income taxes directly on a reluctant population. World War I punched a significant hole in the psychological and institutional barriers between war and peace. At the suggestion of the Bureau of Internal Revenue, thousands of clergymen preached on taxes in their sermons. Only the relative brevity of U.S. involvement in the “war to end all wars” deflected the rush toward more and more centralized government powers. Even so, when the war was over, so were the taxes.
World War II and its 1943 “Victory Tax” struck at the heart of tradition in the United States, as influence and power were thrust upon the military. The war was an organizational and psychological watershed for the military and the nation. A massive effort was initiated by civilian officials to organize and rally society around military-type principles. Education and cajoling were needed to herd millions of citizens into the pool of taxpayers for the first time. Aiding in this effort were the print media, pastors in their pulpits, and the arts. The government hired Irving Berlin to compose a song, “You see those bombers in the sky? Rockefeller helped build them; so did I. I paid my income tax today.” Even the quackings of Donald Duck helped citizens come to terms with the new taxes. Between 1939 and 1945, the number of taxpayers grew from 4 million to 43 million. This time when the war was over, taxes were not.
Now the Cold War is over and still new patterns are developing. After other wars, the U.S. packed its bags, went home, and closed military production facilities. Sometime during the Cold War, however, the nation forgot, mentally and emotionally, how to retool for peace. In the 50th year of the Victory Tax, military research and development spending takes 60 percent of all the nation’s research funds. All other causes together – health, energy, science, transportation, space, agriculture, education, poverty programs, the environment, etc., – rate a mere 40 percent.
We have become the world’s largest arms merchant. Profits and jobs drive our sale of conventional arms. Nine million people now make their living on the military payroll. The vigor of an economy fueled by war industries has been a defining experience for an entire generation. This reality has breached the historic divide between civilian and military life and values.
As the Center for Defense Information ruefully observes, military metaphors pervade our language. More and more, our government has adopted fundamental aspects of military culture: its language, forms of organizational structure, decision-making processes, modes of thought, and regimentation. These are employed to approach and address a growing list of non-military problems and situations.
Let us assume that all planned post-Cold War cuts in nuclear weapons will be implemented. If so, in ten years, or by the year 2003, we will still have 8500 nuclear warheads, or the equivalent of 96,000 Hiroshimas. Why? There are only 3000 cities that size. We can take comfort that at least we’ll build no new nuclear weapons, right? Wrong. The Pentagon will spend $350 billion over the next ten years in research and development of new nuclear weapons as it continues to plan for nuclear war.
We acknowledge the inevitability of death and taxes. It is the connection between the two which grieves and activates the conscience.
Have we considered what portion of our federal taxes and investments is used for military purposes and how these might be used for making peace? Do we live out our testimony against violence and against military training and preparation for war as being inconsistent with the creative work of the living God? (From our Query on Peace, (Handbook of the Ann Arbor Friends Meeting, p. 56.)