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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: Tom Clarke who wrote (24354)	7/13/2000 10:27:05 AM
From: Neocon	Read Replies (2) \| Respond to of 769670

The world has changed a great deal. Inflation alone might account for a good portion of the need for new revenue, just as one could live in upper middle class comfort in the 20s on $7500 a year. As I mentioned, our position in the world changed, and we became the bulwark of the Free World. There are other factors. Last summer I was in Raleigh, and went to a state museum. One of the things that struck me was that the main aim of the Progressive movement in that state in the 30s was to build paved roads. Paved roads were controversial, and one was considered a moderate leftist for wanting the state government to make sure that they were provided! Thus, in a similar way, the infrastructural improvements in a rapidly industrializing economy, for example in harbors and interstate highways, would have placed more demands on the budget than were expected in the agrarian economy of the 19th century. It is true that regulatory expansion and subsidies had something to do with the growth of the Federal Government. However, many of those were enacted prior to the New Deal, without a lot of controversy. Most farm subsidies began prior to the First World War, and important regulatory agencies, like the Interstate Commerce Commission, date from the 19th century. Whether well or ill- advised, the Federal Government was already involved in such activities, because, I think, the growth of the Union changed the perception of the relationship of the Federal Government with the states. After all, as new territories entered the Union, they were accepted by the Federal Government, which had participated in their administration as territories. Thus, instead of the states creating the Union, the Union created most of the states.........

To: Tom Clarke who wrote (24354)	7/13/2000 11:52:41 AM
From: nihil	Read Replies (1) \| Respond to of 769670

If Neocon refuses to answer, I'll be glad to. Except in wartime, the Federal revenue was mostly duties on imports. While we often were thought to have a protective tariff, on the whole it didn't work and became a revenue tariff. Jackson paid off the national debt as a result of the "tariff of abominations" and had to start a subtreasury system to store the surplus after deauthorizing the Band of the United States. Money was given back to the states. The government also sold a lot of land for cash (specie circular). This sound finance led inexorably to the Panic of 1837 in which many states were essentially bankrupt. During the Civil War, the U.S. issued large numbers of Greenbacks (not gold backed). Started the National Bank System which required backing of bank notes with U.S. Bonds. We paid for the war mostly by borrowing. And adopted an income tax! After the war we returned to deflationary finance and eventually returned to a gold standard in 1873 (another big depression). High tariffs continued to prevail. In 1894, under the Democratic Wilson Tariff, the income tax was adopted to finance reduction of duties. Because of the direct taxation provisions of the Constitution which required direct taxes to be allocated among the states in proportion to population, writing income tax laws was difficult and the laws were invalidated by the Supreme years after they had done the job. The 16th Amendment did the legalizing job just in time to allow for big tax increases during WWI.