The tax reforms of the 1920’s were the answer to the extraordinary high rates the government had imposed during World War I. Permanent income tax had only been a part of the American life for less than a decade. Income tax was introduced to the American public in 1913 at a low rate but increased to over 70% to sustain World War I. The war ended in 1918 after four years and left America in a bad place. National debt was high, work was difficult to find, and wages were low. Warren Harding ran for office in 1921 with the former Massachusetts governor, Coolidge, as his running mate. Their political platform was smaller government and a return to normalcy in which business could operate with confidence. Under Harding’s leadership, The Revenue Act of 1921 was the first of the 1920’s tax reforms passed lowering the top rate to 58 percent. …show more content…
Coolidge handled the publics property and money as seriously as he would his own. He once commented he was head of the organization that makes the greatest of all budgets – the United States government. Growing up with puritan values and conservative economic views, Coolidge efficiently continued to direct the Budget and Accounting Act of 1921 that had passed under Harding’s leadership. Coolidge was not a “yes” man. In fact, his customary answer was “no”. Coolidge and his staff worked diligently to find places to save money. Coolidge was always consistent and discipled, never changing his perspective or moral compass to please his
Roosevelt had produced the idea of The New Deal which was not just one program but a series of
- “By 1917, the top federal income tax rate had been raised to 67 percent. Though it fell in the 1920s, it would rise again during the Great Depression and, especially, World War II. In 1940, before the United States entered the conflagration, the federal income tax raised $1.5 billion ($25 billion in today’s money). By 1945, it collected $17 billion ($223 billion). The top income tax rate would not fall below 70 percent again until
Both Franklin Delano Roosevelt and Herbert Hoover had their ideas about how the economy should proceed. Although when it came to efficiency Roosevelt was the one who saved America. United States History & Government: Constitutional & Geopolitical Patterns, 2001 states “FDR and his advisors… felt that government would use pump-priming that government should take actions that would make the consuming public secure and optimistic…” (Document 5). Roosevelt wanted to get involved with the community of people and seem “down to earth.”
Beyond his persona, Coolidge mainly focused his attention on the main interest of the nation at the time: the economy. When Coolidge first came into office with Harding in 1921, the United States was going through great economic struggles. According to the Heritage Foundation, “In 1921, the unemployment rate was 11.7 percent. The national debt had shot up from $1.5 billion in 1916 to $24 billion in 1919. Gross national product decreased from $91.5 billion in 1920 to $69.6 billion in 1921.”
He often would advise businesses to not lower minimum wage and to lay off workers. He was afraid that government interference would cause more issues instead of assisting the economy. Herbert, was a very conservative man. He believed in individualism and that each man should be the bread winner for his family. In believing so he turned down many government assistance programs.
At the end of the 1920’s America was in a state of despair. The stock market crashed, thousands lost their jobs, and were struggling to provide for their families. In an effort to restore the economy legislation such as Franklin D. Roosevelt’s New Deal, proposed reforms in the banking system, monetary system and fiscal policies along with regulation security. Despite the numerous legislation that was passed to help the end the Great Depression, it only helped lessen the effects, not completely end it. There were two leaders that stood out during the Great Depression and felt that President Roosevelt wasn’t doing enough to end the depression.
Coolidge said in his inaugural message, “We cannot finance the country, we can not improve social conditions, through any system of injustice, even if we attempt to inflict it upon the rich,” (1925 Inaugural Message). He believed that while taxation was an economic issue, it was also a moral issue. A significant amount of hard-earned money was being removed from each citizen’s paycheck, and Coolidge believed the amount taken was discouraging and limiting to the taxpayer, and sought to change
After all of the corruption and greed caused by the Teapot Dome Scandal, Americans wanted a break and for everything to go back to normal. Coolidge was the perfect fix to the insanity. “Coolidge's image as an honest, frugal New Englander committed to small government helped the Republicans to avoid the worst of the backlash from the Scandal”(“The Teapot Dome Scandal”). After the Teapot Dome Scandal, Americans were begging for a return to normalcy, and Coolidge was able to offer just that as President. He was very honest, unlike the officials during Harding’s presidency, and frugal as well, which was needed to combat the greed of the Scandal.
In the 1920 landslide victory, Republican Warren G. Harding, a senator from Ohio won. He triumphed on the simple campaign assurance to a, return to normalcy, for the country. Unfortunately, supporting the Harding policy, normalcy meant government direction was pro-business, anti-regulation, and anti-tax. The Treasury Secretary, Andrew Mellon slashed tax rates to a 60% decree for the wealthiest business holders.
He was not purposefully bashing the wealthy; he only wanted to ensure happiness for as many people as possible. Roosevelt continued to have very strong progressive values until the progressive movement became unstable. Even though joining political groups was frowned upon,
Harding’s presidency during the 1920’s was filled with nothing but corruption, political schemes, and broken promises. The resolutions that he had made during his campaign never came to fruition and he ended up dying before the truth of his failure came to light. There was no true return to normalcy and many of the post-war policies stayed intact for the latter part of the decade until the start of the Second World
Warren G. Harding’s inability to generate an opinion led to his poor presidency, and it should have been clear to both his political party and the public that he was not the right man for the job. It was not just his indecisiveness that made him ill-suited for the job, however, his reliance on delegation allowed his cabinet to take advantage of him. Along with that, his pro-business policy only ushered in economic prosperity for a short amount of time, but inevitably caused an economic depression so terrible that an entire decade was decimated by it. Most importantly, however, what made him a terrible president was his lack of interest in the job, and because he was unenthusiastic about the presidency, he was unable to understand the importance
Additoninally two very notable Presidents that supported reform are Theodore Roosevelt and Woodrow Wilson. First, 16th amendment Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration. “It’s progressive because the US government can collect taxes from the citizens of the country without having to redistribute them proportionately based on the state census populations. This means the government can redistribute taxes according to where there’s most need.17th Amendment-
The 1920s were the first years of the new, modern America, with a growing consumer society and new ideas and rules. America saw many changes throughout this decade, including but not limited to social, economic and political changes. Throughout this time, new values were made with the growth of new forms of entertainment and education. After the Progressive Era, the ideas of political figures changed with a new focus on conservative politics and less labor issues. With the new ability for people to buy other products than basic needs, their money went to new inventions, causing new industries to grow.
World War 1 ended in 1914, and the United States entered the 1920s with a booming economy where people had jobs, using their newly earned money to put food on the tables, and to invest into stocks. 1924 came the election of a new president and the American people elected Calvin Coolidge: an economically conservative, laissez-faire approach to government, a person who would keep things the way they were. Coolidge did exactly what they needed at the time for a president, nothing. Herbert Hoover was elected in 1928 following Coolidge, Hoover was a republican, laissez-faire president until in 1929 the Great Depression hit. Hoover needed to act and he developed the Reconstruction Finance Corporation in hopes to turn around the plummeting economy,