Amid shouts of "soak the rich!" on the House floor, this unexpected majority would go on to raise the top tax rate from 25 percent on income over $100,000 to 63 percent on income over $1 million. The new higher tax rates, notes tax historian Elliot Brownlee, would double the effective tax burden on America's richest 1 percent.
House Democratic majority leader Henry Rainey would not be happy about any of this.
"We have made a longer step in the direction of communism," he told his House colleagues, "than any country in the world ever made except Russia."
But Rainey remained above all else a savvy politician. He saw clearly that Americans overwhelmingly supported higher taxes on the nation's wealthy, and now he would make the best of a bad situation. The evening after the crushing defeat of the sales tax proposition, he would go live on national radio and position the new taxes on the rich as a fiscally prudent step toward balancing the federal budget. He would also do his best to convince Americans that the rich had now sacrificed quite enough.
Lawmakers in the House, Rainey told the nation, have raised income taxes on the wealthy "to the very breaking point." Even "the most violent advocate of 'soaking the rich' ought to be satisfied," the Democratic majority leader would pronounce.
"We have 'soaked the rich,' I assure you," Rainey would repeat for emphasis at the close of his radio address.
In fact, the soaking had been more a quick rinse. Taxes on the nation's wealthy would remain, even after the increases, substantially lower than top rates in effect during World War I. The bulk of the tax dollars the new revenue legislation would raise would come from new and increased excise taxes, some on luxury items like furs but most on everyday items like chewing gum and lubricating oil.
Even so, the 1932 tax fight did mark a turning point. The rich and their political enablers had reached for the brass ring, a national sales tax. The American people had slapped them down.
In Albany, the state capital of New York, an ambitious governor took notice. Just two weeks after the tax brouhaha in Washington, Franklin D. Roosevelt, a leading candidate for the 1932 Democratic Party nomination, would begin a remarkable series of addresses that aligned his candidacy four-square with America's grassroots push against plutocracy.
The first of these addresses, broadcast April 7 in NBC's Lucky Strike Hour, would champion the "forgotten man at the bottom of the economic pyramid" and blast away at political leaders who "can think in terms only of the top of the social and economic structure."
The next month, at a commencement address at Georgia's Oglethorpe University, Roosevelt would deliver a stirring call for "bold, persistent experimentation" to aid the "millions who are in want."
"Do what we may have to do to inject life into our ailing economic order," the Presidential hopeful would explain, "we cannot make it endure for long unless we can bring about a wiser, more equitable distribution of the national income."
The New Deal had begun.
Could a defeat of the GOP tax plans of 2017 signal a similar new egalitarian upsurge? Maybe. But first we have to deliver that defeat.
This article originally appeared on Inequality.org.
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