Facts & Figures on War Finance, Second Edition, 1942

Foreword To the task of victory, this nation, its people, their enterprise and industry have dedicated themselves. The price will not be cheap. Victory will be bought with blood and tears which are beyond valuation. It will also be bought with dollars—more billons of dollars than have ever been spent by any nation on earth—more billons than any people have ever found themselves called upon to provide—so may billons as to be beyond the comprehension of all but a few.

Nothing must detract from our concentration on the job ahead. At the same time we must not for an instant forget, or lose sight of the fact, that a great part of the battle must be fought not with guns and planes and tanks on foreign soil but with common sense, vision and courage right here at home.

The Nation must find the dollars to pay for the war without destroying or seriously impairing she very economy by which it has been free. To do this job on the home front, the American people must not only accept, but must rather see to it, that the Nation adopts several fundamental policies:

1. The saving of every possible dollar not necessary to the war and not absolutely essential to the needs of the people. This means immediate and rigid economy on the part of government, federal, state and local.

2. The imposition of maximum necessary taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. es upon all of the people and their industry without working inequitable or unbeatable hardship on any part and without destroying or stifling the system of free enterprise which produces the nation’s income through which it has achieved the highest standard of living ever known and only through which, after victory, it can advance to new frontiers.

3. Along with a broadly based, realistic system of taxation—one of the most equitable and effective bars to inflationInflation is when the general price of goods and services increases across the economy, reducing the purchasing power of a currency and the value of certain assets. The same paycheck covers less goods, services, and bills. It is sometimes referred to as a “hidden tax,” as it leaves taxpayers less well-off due to higher costs and “bracket creep,” while increasing the government’s spending power. —to adopt all other practical anti-inflationary measures.

4. To conserve all national resources, human, natural, financial and, while winning the victory for Democracy, to also preserve and prepare Democracy for peace.

Lewis H. Brown, President of the Johns-Manville Corporation has said, “The methods by which we finance this war will, to a greater extent than ever before in the history of the world, affect the economic situation in the post-war period.” To contribute in small part to needed debate and consideration and to clarify the problem and the facts which relate to it, this brief summary, Facts & Figures on War Finance, has been compiled by Tax Foundation.

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