Redistribution of Income

August 25, 1972

Report Outline
Public resentment against taxation
Redistribution in Nation's Tax History
Growing Pressures for Tax Revisions
Special Focus

Public resentment against taxation

Tax Reform as Major Issue in Election Campaign

How americans share—or fail to share—in the nation's wealth is shaping up as Topic A of the 1972 presidential campaign. Beginning with the Democratic primaries, political commentators perceived that the voters believed that the country was somehow out of whack. According to conventional wisdom, the disenchantment sprang from a wide range of inequities. Despite a rebounding economy, unemployment stayed well above 5 per cent. Wages were rising but their buying power was being held down by inflation. Hunger and poverty continued to co-exist with enormous pools of wealth, in spite of massive welfare programs. And there was a special resentment against taxation. The Harris Survey reported in June 1972 that 68 per cent of the people it polled subscribed to the notion that “the rich get richer and the poor get poorer”—in contrast to only 48 per cent who felt that way in 1966.

All of these dissatisfactions were bound up in the “new populism” espoused by Gov. George C. Wallace of Alabama and Sen. George S. McGovern of South Dakota. Both promised a new economic order with full employment and, above all, a redistribution of the national income through tax reform. President Nixon has proposed to put a floor under incomes through a “negative” income tax. The President has also suggested that a value-added tax might be imposed to replace or ease local property taxes. The 1972 Republican Platform, adopted Aug. 22, pledged the party during the next session of Congress “to pursue such policies as revenue sharing that will allow property relief” and “further tax reform to ensure that the tax burden is fairly shared.” However, Nixon is not expected to advocate specific tax revisions until the Treasury Department drafts a set of proposals, due by the year's end.

After his nomination as the Democratic presidential candidate, McGovern struck what many expected to be the keynote of his campaign. He said in his acceptance speech at Miami Beach on July 14:

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