The US never demobilized after WW2, but we tax workers instead of rich people & corporations

Feb 14, 2024 19:40

During FDR's first term, as the US recovered from the Great Depression, federal tax receipts were always less than 5% of GDP. Since FDR's death in 1945 as WW2 was ending, federal tax receipts have ranged between 13-20% of GDP. Last year they were 16% of GDP, about in the middle of this 80-year range. Although marginal income tax rates have gone up and down over the decades, we keep on taxing the US economy at roughly the same proportion as we did during WW2, as though our government were constantly fighting a global war.

One big difference between now and 1945 is that we tax the rich far less: the top income tax rate for individuals was 94% in 1945, today it is 37%. Corporations paid up to 40% in 1945, 21% today. While the rich & corporations pay far less, workers pay far more! Payroll taxes for Social Security & Medicare took only 2.0% of workers' paychecks in 1945, but take 15.3% today.

And now the federal government again owes WW2 levels of debt -- we've only exceeded today's debt as a proportion of GDP during 1945-1946, and we're projected to grow our debt past WW2's levels later this decade. Again, as though our government were constantly fighting a global war.

It's as though we never stopped fighting WW2, although the number of US residents dying from combat has declined, with occasional bursts of combat deaths in Korea, Vietnam, Afghanistan, and Iraq. And occasional combat deaths & injuries all over the planet, like the recent three deaths in Jordan. We still have over two million soldiers in uniform distributed around the globe.

Why has the US maintained a WW2-sized government for another 80 years after we defeated our enemies? Didn't we utterly destroy Germany and Japan? Well, sure, but then we immediately turned against our former allies, the Soviet Union and Communist China. They were great pals in the fight against fascism, but oh no they were communists!

But then decades later communism fell ... but decades after that we're still maintaining a WW2-sized government in 2024, and we still view capitalist Russia and capitalist China as our rivals, claiming that they're "authoritarian" while we're "free". Somehow swapping between Biden and Trump every four years is "freedom", while the vast majority of our votes are practially meaningless due to the Electoral College and gerrymandering. Somehow we're the "free" country even though we imprison about 2x as many as Russia, and 5x as many as China, when measured per capita.

Based on tax rates, Russians pay less in taxes than US residents, would that make Russians more free? Chinese pay roughly the same as US residents (China is now "communist" in name only, it has almost as many billionaires as the US).

The US isn't alone in maintaining WW2 levels of government taxation, borrowing, and spending. The rate of deadly violence may be less right now than it was during WW2, but we never did let go of the wartime spending and wartime military and global rivalry. The US believes in projecting its power worldwide and now into space, while denying its rivals the same.

war is profitable, forever war, wartime, global studies bug

Previous post Next post
Up