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The Cold War and the Income Tax (1963) would not exist if Edmund Wilson had not been a fool with money. In German, luftmensch is an impractical intellectual, a man with his head in the clouds. That was Edmund Wilson. Not much remembered today, from the 1930s until his death in 1972, Wilson was inescapable in American letters. Wilson wrote on modernist literature (Axel’s Castle), the Great Depression (The American Earthquake), Native Americans (Apologies to the Iroquois), and the literature of the American Civil War (Patriotic Gore). He learned Hebrew in order to write about the Dead Sea Scrolls.
Wilson wrote a classic history of Communism, To the Finland Station: A Study in the Writing and Acting of History, which is still worth reading. Wilson was never a member of the Communist Party, but in 1932, the worst year of the Great Depression, Wilson voted for the Communist ticket of William Z. Foster and James Ford for President and Vice President. Thereafter, Wilson would vote for the Socialist Party’s Norman Thomas in his many runs for the White House.
The poet Stephen Spender described Wilson as “a man of great brain power.” Spender could not have been thinking about how Wilson handled money. From 1946 to 1955 Wilson did not file a tax return. Like many freelance writers, Wilson (saddled for life with the childhood nickname “Bunny”) lived hand to mouth for years. At the beginning of The Cold War and the Income Tax, Wilson describes how for several years he earned too little to need to file. (He was wrong. Wilson would eventually learn to his horror that a tax return must be filed even if the filer owes no tax.) Later, when he went to work as a staff writer for the New Yorker magazine, Wilson comforted himself with the thought that his salary was subject to withholding. As for the tax he owed on his freelance earnings, Wilson told himself he could catch up later.
By 1955, worry had drilled far enough into Bunny’s thick, brilliant skull that he consulted a lawyer. The appalled lawyer suggested that the only way to resolve Wilson’s tax problems might be for Wilson to take out citizenship in another country. The lawyer said that Wilson faced heavy fines and as much as five years in prison.
Wilson describes his tax troubles in a short book published in 1963, The Cold War and the Income Tax: A Protest. It is a personal, even crotchety, book. The book is unintentionally funny because it originated not out of principle but because Wilson was a ninny who did not pay his taxes. There are repeated outbursts of crankiness. The IRS kept Wilson’s financial transactions under close watch after Wilson and the IRS arrived at a settlement. Wilson grouses that when he claims a deduction for a business lunch, the IRS should accept that it was a business lunch—no questions asked. Even the most benign tax system in the world cannot operate that way. A not unsympathetic reviewer at the time commented that even if the income tax supported only spending that Wilson approved of the IRS would still have to use many of the tactics Wilson found intrusive.
Interestingly, Wilson says nothing about the misuse of IRS audits for political purposes. US Presidents, including Franklin D. Roosevelt, Richard Nixon, and George W. Bush, have ordered audits of political enemies. Conservatives associated with the Tea Party have accused the Obama Administration (correctly or not) of audits aimed towards removing the tax free status of right-wing political groups. FBI Director J. Edgar Hoover arranged for audits of the Reverend Martin Luther King, Jr., Grapes of Wrath author John Steinbeck, and opponents of the Vietnam War, among others. Of course, much of this was not known, or hadn’t yet occurred, when The Cold War and the Income Tax was published.
Wilson also recounts some diverting anecdotes about taxpayer encounters with the IRS. My favorite is of a taxpayer whose analyst prescribed sexual intercourse as a cure for neurosis. The taxpayer tried to take a medical deduction for his visits to call girls—and nearly succeeded.
Your Tax Dollars at Work
How much of our taxes go to the military? That’s hard to say. The Department of Defense budget for fiscal year 2016 is $586 billion. But that number does not tell the whole story. The War Resisters League informs us that the $586 billion figure overlooks the national debt. We are still paying off past military spending. So, throw in another $518 billion in FY 2016 as our latest installment payment on military expenditures in the past.
But that’s not all. Military spending also goes on outside the DoD. Military spending outside the DoD comes to $182 billion in FY 2016, again, according to the War Resisters League. There is military spending hidden in the nooks and crannies of the budgets of the Department of Homeland Security, the National Security Foundation, NASA, the State Department, the FBI, and elsewhere. The USDA’s Bureau of Poultry Inspection may have a paramilitary wing for all we know.
Total all these figures and this year’s military spending comes to a stroke-inducing $1.3 trillion, or 45% of the total federal budget.
At least, the Pentagon does not blow all this money in one place. US military bases, much like Sherwin-Williams paints, cover the world. They include an increasing number of new bases in Africa. The sun never sets on the American Empire any more than on the British Empire before it.
By the time US armed forces withdrew in 2011, the Iraq War had cost more than $2 trillion, according to the Costs of War Project at Brown University’s Watson Institute of International and Public Affairs. That amount will surge as $6 billion in benefits is paid to Iraq War veterans over the next four decades. And no price can be put on the 4,486 American and 134,000 Iraqi lives lost during the war.
The price for the Iraq War has been high. But in return, American taxpayers received—what? Not greater safety. Saddam Hussein had no WMDs and had nothing to do with 9/11.
The world is less safe today than before the 2003 US invasion of Iraq. Toppling Saddam Hussein unleashed the killers of the Islamic State. Now the US is out to crush the Islamic State (and/or unseat Syria’s Bashar al-Assad). The US has been bombing Islamic State targets in Iraq and Syria since late 2014. These bombing runs aren’t cheap. Air Force Times reports the total cost of US air strikes as of late 2015 at $5.5 billion.
US boots are back on the ground. Special operations forces were dispatched to Syria late last year. This is the first sustained deployment of US troops in Syria, a sovereign country with which the US is not at war.
The initial cohort was 50 special forces. We do not know the current number. However, Reuters reported on April 1 that the Pentagon may greatly increase the number of special forces in Syria.
About 100 special forces are also in Iraq. In October, a member of Delta Force was killed during a hostage rescue mission in Iraq. Do not expect him to be the last casualty.
The US also, notoriously, supports local forces in the Syrian civil war. US support for indigenous forces (the fabled “Syrian moderates”) has not been notably successful. In October, the Los Angeles Times reported that the CIA-armed Fursan al Haq (Knights of Righteousness) is now fighting the Pentagon-backed Syrian Democratic Forces. It’s a little like the annual Army-Navy game if the teams were allowed to use machine guns on the field.
Overshadowed by the conflict with the Islamic State is the war in Afghanistan which as it enters its fifteenth year is the longest war in US history. Here, at least, there is good news. Compared to the trillions of dollars spent in Iraq, the National Priorities Project reports that the cost of the US war in Afghanistan has been a modest $732 billion to date.
At one point in The Cold War and the Income Tax, Wilson asks why the American public does not “bring pressure to bear in an outbreak of popular feeling” to end the nuclear arms race. The same could be asked today. News that the United States plans to spend $1 trillion over the next thirty years modernizing our nuclear arsenal sparked hardly a murmur of comment, let alone protest.
The trouble is that it’s unpatriotic to suggest that the US shouldn’t run the world. Suggest cutting military spending and you will be told that the world needs American leadership. Whether the world wants American leadership is beside the point. “Superpowers Don’t Get to Retire” , you see, according to the cover story by the neoconservative Robert Kagan in the May 26, 2014 New Republic. Kagan, a cheerleader for the Iraq War, applies the credo of Spider-Man to the United States: With great power comes great responsibility. Americans are so pacific that we yearn to set down the burden of world leadership, but that is a temptation we must not give in to.
Kagan has endorsed Hillary Clinton for President.
“Only the Little People Pay Taxes”
When The Cold War and the Income Tax was published in 1963, the highest marginal individual income tax rate was 91%. Today it is 39.6%…for those who pay it.
Leona Helmsley, the hotel magnate and “Queen of Mean,” infamously declared that “Only the little people pay taxes.” The words ought to be chiseled above the entrance of Mossack Fonseca, the law firm the Panama Papers have outed as the facilitator of worldwide tax dodging by the superrich. Likewise, Donald Trump has boasted that when it comes to taxes: “I pay as little as possible.”
Helmsley was wrong in her own case; she was jailed for tax evasion in 1989. However, generally speaking, she was correct. Helmsley merely overlooked the fact that occasionally the 1% have to make an example of one of their own. Otherwise, the rubes might tumble to the fact that the game is rigged.
If anything, the record for corporations is even worse. CNN estimates that 20% of large corporations pay no taxes. As arcane a matter as corporate inversion has become an issue in the 2016 presidential campaign.
We owe the irascible Bunny thanks. There is something appealing in the idea of writing a diatribe against the IRS in order to raise money to pay one’s delinquent taxes. And it cannot be said too often that our vast military establishment only exists through gouging average taxpayers. The 1% the military exists to serve pay the least to support it. Most of us will never suffer through Wilson’s ordeal with the IRS. But our taxes support the war machine, just the same.