National Wealth and National Income

April 20, 1935

Report Outline
Plans to Share Wealth and Share the Income
Growth and Concentration of the Nation's Wealth
Volume and Distribution of the National Income
Difficulties Inherent in Plans for Sharing Wealth
Special Focus

Plans to Share Wealth and Share the Income

Senator Huey Long's Scheme to Make Every Man a King

For Many Months United States Senator Huey P. Long of Louisiana has let pass no opportunity, in or out of the Senate, to publicize his plan to “share the wealth.” By imposing a sort of capital levy on great fortunes and a limitation on incomes and inheritances, he would so redistribute the wealth of the nation among the whole population as to end poverty and provide everyone with the necessaries and conveniences essential to a decent standard of living or, in his words, “make every man a king.” The practical methods by which this objective might be accomplished have not been clearly outlined, but long apparently anticipates no difficulty on this score. He said on the radio on March 31, 1935: “I could spend all night on details, but I refuse to concede that people who listen to me are so devoid of common sense that they would believe that if we have things in abundance, there is any real trouble in handing them over to the people needing them.”

While Senator Long has been spreading the idea of sharing the wealth, Dr. F. E. Townsend of California has been promoting a plan to pay substantial government pensions to persons 60 years of age or over, thus, according to the preamble of the bill embodying the plan, “supplying to the people a more liberal distribution and increase of purchasing power … improving and stabilizing gainful employment … stimulating agricultural and industrial production and general business.” The Townsend program called originally for a pension of $200 a month. As revised in a new bill introduced on April 1, 1935, by Rep. McGroarty (D. Cal.), that sum would be the maximum amount, but the size of the pension would vary from month to month according to the volume of funds available for distribution. The bill provides for creation of a special fund into which would be paid the proceeds of a 2 per cent tax on the gross dollar value of transactions of virtually every nature, an additional 2 per cent tax on inheritances and gifts, and an additional tax equal to one-tenth of present federal income taxes. After payment of administrative expenses and contributions to a reserve fund, the remainder of the special fund would be distributed pro rata each month among those entitled to pensions. Rep. Buck (D., Cal.) asserted on April 13 that individual pensions under this scheme would be only $50 a month.

Burdens and Problems Involved in the Townsend Plan

Supporters of the Townsend plan have estimated that a 2 per cent tax on all transactions and transfers would yield $9,600,000,000 annually at the present time and $18,700,000,000 on the basis of the volume of business in 1929. The plan is calculated to stimulate employment and business by requiring that pensioners engage in no gainful pursuit and that they agree to expend the entire amount of the pension within the United States during the month in which it is received. Persons with net incomes in excess of $2,400 a year would not be eligible for pensions, and those with independent incomes of less than that amount would have their pensions reduced by the amount of such income. Under the original plan to pay $200 a month to all persons 60 years of age or over regardless of their financial status, it was estimated that the cost would be $24,000,000,000 a year.

ISSUE TRACKER for Related Reports
Economic Crises
Economic Development