Friday, Mar. 12, 1943
No letters today but lots of news. More rationing for butter, meat, and cheese beginning April 1. Cooking fats too. Mary Meade offered helpful recipes, including a chicken and avocado salad that sounds pretty luxurious. Meanwhile, the Chicago Tribune reported, there were “riotous debates” as Congress tried to repeal President Roosevelt’s executive decree capping salaries at $25,000. The decision to withhold taxes from paychecks was another hard fought issue. The GOP-dominated Congress now had high hopes for a skip-a-year proposal that would keep the 20% withholding provision but exempt people with taxable incomes under $20,000 from paying tax for 1942. Anyone with taxable income over that amount could pay tax for 1942 or 1943, whichever year had the higher taxable income. America’s income tax structure today reflects the choices Congress made in 1943 to fund WWII. (Ditto health care. But that’s another story.) The goal was worthy – – a pay-as-you-go war that would hold down debt. Corporate taxes were as low as 25% for the first $5,000 taxable income to 40% for taxable income over $50,000. Until fairly recently, corporate taxes provided about 1/3 of the revenue for the federal budget. Today, thanks to outsourcing, offshoring, and tax havens have reduced that to under 10%. As a result, corporations have shifted the burden to salaried workers and payroll taxes.