The 32nd President of the United States of America, “Franklin Roosevelt’s 100% plan”, was a plan to charge income tax to max, a 100% rate. It came at a time when the U.S. markets was crippling and struggling to turn a profit. Unemployment was at an all time high, basic infrastructure of the country was very poor, many families had to ration their meals.
Due to historical economic downturn doved, the Great Depression which last from 1929 until the 1930s “New Deals” series of reforms to taxation was created to resolve the U.S. budget deficit. The concept of a progressive taxation was introduced. Progressive taxation meant the more money you earned or the greater your income the higher your tax liability would be. This rationale made logical sense (I don’t know why got rid of this) , it considers the principle of equality. A progressive tax plan distributes the revenue earned by very wealthy people and funnels it down to lower class people by collecting the taxes from rich and utilising for development of economy. Tax collected from the rich would provide basic infrastructure to the poor: increasing the employment opportunities, fund government relief programs, etc.
Problem with the concept of a progressive tax plan was the issue of deciding the numeric marker for capping those who were consider rich, wealthier than others. For that solution Franklin Roosevelt introduced a historical tax called, “100 % tax” on people earning income exceeding more than $25000 which swiftly opposed by congress. So later on President Roosevelt through executive order passed the “100% tax plan” on salaries and by placing a marker-cap on income limit while achieving the purpose of tax revenue.
This 100% tax plan was the first flat tax in U.S. history. It’s intentions were to ensure the Law of equality and principle of equality not the objective of higher revenue collection. Instead for the prohibited reasoning to carry the nation out of the Great Depression.
The FDR policies and the advocacy of them was reinforced and supported by a strong and growing labor movement and a lot of Democrats of that time. We no longer have a progressive tax plan or a flat tax now. Although the U.S. economy is not in a depression or the later a recission. We still have growing budget deficit that continue to rise; it rose 17% in the fiscal year of 2018.
The Republican Party from yesterday and today dislike FDR’s solution to the Great Depression/ Today there are still mutterings of things like class warfare if a progressive tax is too be implemented again in today’s economy. People who are socialism adverse will not consider the goal of a “more equal” tax laws to be acceptable, yet they might be receptive to the same measure if presented in other terms.