Largest tax hike in history comes in October 1942

Nothing like a good war to pump up the economy. But, as we have found out again and again, pumping up the economy often leads to inflation.

World War II had barely gotten underway when inflation began spiraling upward. Wage and price controls were imposed early in 1942.

“Regulation of wages is one partial check on inflation. Another is price controls so tight that people can’t use their money to bid up costs. Another is taxation so heavy there won’t be any more money to spend than there are goods to buy,” said H.R. Baukhage in the Advocate’s national column.

When wage and price controls proved ineffective, higher taxes were set. On Oct. 21, 1942, President Roosevelt signed into law what was then the largest tax increase in U.S. history. The Revenue Act of 1942 was expected to bring in $26 billion to fund the war and reduce consumer spending.

Major provisions of the Act included increasing the federal income tax rate from four to six percent plus an additional 5 percent “Victory Tax” on anyone reporting more than $624 per year. The personal exemption was reduced from $1,500 to $1,200 for married couples and from $400 to $350 for dependents.

On top of that were surcharges ranging from 13 to 82 percent. For example: A married couple reporting $2,000 above the exemptions and deductions would pay the six percent normal tax, plus an additional 16 percent surcharge for a combined rate of 22percent.Filersreporting$200,000 would pay a combined tax of 88 percent. Of course, no one in Laurel had that kind of income.

There also were increased excise taxes on liquor, beer, wine, cigarettes, cigars, lubricating oil, train and bus fares, and many other items.

And to make sure Uncle Sam got his share first, a withholding tax was imposed on wage earners making more than $12 a week. Prior to that time,peoplepaidtheirtaxesquarterly.

To alleviate the growing rubber shortage, the Office of Price Administration proposed to create a national stockpile of passenger car tires.

The plan included five steps: 1) rationing of all tires including used tires and recaps; 2) reduce driving through gasoline rationing; 3) compulsory inspection of tires to prevent abuse; 4) denial of gasoline and tires to drivers who persistently violate the “Victory Speedlimit”of35mph;5)ridesharing wherever possible.

Another proposal was to require car owners to have no more than five tires for each car. Extra tires were to be surrendered to the government to build up the stockpile.

Amajorchangewasintheworksfor the draft law. In September 1940, under legislation sponsored by Nebraska Sen. Edward Burke and New York Representative James Wadsworth, Congress approved the nation’s first peacetime draft for men between the ages of 21 and 36.

In October 1942 President Roosevelt persuaded Congress to lower the draft age to 18. This was expected to add 1.5 million teenage boys to the armed forces.

African-American men, incidentally, were excluded from the draft until 1943 at which time they could be drafted into labor units such as supply, maintenance and transportation.Asthe fighting intensified, the ban on Blacks in combat was lifted.

In other news of October 1942: The Advocate contained several notices of properties to be sold at a sheriff’s sale for delinquent taxes.

Among these were 16 parcels belonging toCarlosGoltz.Fifteenofthese wereinStewart’sAdditionandonewas in Goltz’ First Addition.

LocatedwestofElmStreet,bothadditions were started by Carlos’ father, Alexander C. Goltz.

Maurice“Mo”Christensen,aformer Belden school superintendent, was seriously injured when the plane he was pilotingcrashlandedatCorpusChristi, Texas. Christensen was training ito be a pilot in the Naval Reserve Air Corps.

“What is so rare as a day in June?” asked Editor Allison. “It’s one of those lazy fall days of Indian summer such asweareexperiencingrightnow.Corn pickingisbeing slowed because of the excessive moistureloss through the pores of the skin of pickers. In other words sweat is slowing operations.” Obviously, the editor was not concerned with offending Native Americans. Nowadays, the term“Indiansummer”isoftenreferred to as “second summer.”

Another thing slowing the corn harvest was a shortage of help due to the war. All three of Chris Dahl’s sons were in the service. Several soldiersin- training came home on furlough to help pick corn. On Oct. 29, the Laurel schools closed for a week so students could help. While some farmers used mechanical corn pickers, many still picked by hand using horse-drawn wagons instead of tractors. Some farmers preferred horses because the animals could be trained to stop and start without a driver.

Auctioneer Fred Jarvis advertised a horse sale at the Pavilion on Oct. 23: “40 to 60 good horses. Several good teams. Plenty of horses to fill your corn picking needs.”

‘’Oneofthecasualtiesofwarisroadside romance,”saidEditorAllison.“No more waiting lines at favorite parking spotsandnomoremeetingsofsomeof our amorous old battle axes with their boy friends of 50 years or more along the side roads. Tire shortages, coming gas rationing, saving of automobiles, have definitely put the run on Dan Cupid. Alack and alas. No more juicy stories to be told. Yes, we know of one old buzzard but we haven’t got around tohimyet.Timewillbringoutthefacts. Either time or a shotgun.”

Wouldn’t think roadside romances between old battle axes and their boy friendsof50yearswouldresultinmany shotgun weddings.

Fortunately shotgun shells were nearly impossible to find. And if the song had been written in 1942, some of the old battle axes’ husbands might be singing “You Can Have Her, I Don’t Want Her.”