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On Funding Wars

A reader writes:

History and facts, again, escape this woman. The top marginal tax rate in 1941 was 81 percent on incomes greater than $5 million (about $72 million in today's dollars). In 1942 and '43, it was 88 percent on $200,000 per year ($2.6 million today). In '44 and '45, it was 94 percent on $200,000 ($2.3 million today). The Greatest Generation did more than just save pennies to buy war bonds... most everyone paid more in taxes and some 40 million people paid taxes for the first time. From the Treasury's Web site:

Even before the United States entered the Second World War, increasing defense spending and the need for monies to support the opponents of Axis aggression led to the passage in 1940 of two tax laws that increased individual and corporate taxes, which were followed by another tax hike in 1941. By the end of the war the nature of the income tax had been fundamentally altered. Reductions in exemption levels meant that taxpayers with taxable incomes of only $500 faced a bottom tax rate of 23 percent, while taxpayers with incomes over $1 million faced a top rate of 94 percent. These tax changes increased federal receipts from $8.7 billion in 1941 to $45.2 billion in 1945. Even with an economy stimulated by war-time production, federal taxes as a share of GDP grew from 7.6 percent in 1941 to 20.4 percent in 1945. Beyond the rates and revenues, however, another aspect about the income tax that changed was the increase in the number of income taxpayers from 4 million in 1939 to 43 million in 1945.

See the complete history of tax tables here.

Another writes:

I love the right's worship of "The Greatest Generation," which of course earned its reputation for sacrifice under America's only three term president, who governed the economy in ways that even most liberals would today find shocking, shipped a generation of American men overseas to fight and die using a conscription policy that no politician would dream of suggesting for our pampered culture, rationed consumer goods including food (can you imagine how Americans would react to a ration on sugar today?), told Americans to go outside and plant vegetables in their yards (and then eat them!), and yes, saved America from the Great Depression and the world from Hitler.

The Greatest Generation did indeed earn the respect of those of us who follow, but let's not forget that we were lucky enough to have leadership that made the sacrifice mean something profound.