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History repeating? The climate for reform in 1909

Published October 05. 2009 02:55PM

The arguments against any major health care overhaul usually begin with how to pay for it. President Obama's claim that the bill will not filter down in the way of new taxes has many skeptics.

A century ago, President William Howard Taft, our heaviest president at 300-plus pounds, was also facing tax issues. He rode to an easy victory in 1908, thanks in large part to the popular support of his fellow Republican predecessor, Theodore Roosevelt.

It was a panic year for the economy in 1908, and, like Obama, Taft was in a business recovery mode during his first year of office. In September 1909, the Tamaqua Courier was optimistic.

"When William Taft was elected to the presidency, it was predicted that shortly after his inauguration there would be a general revival of confidence and that the country would pass into an era of unexampled prosperity," the Tamaqua writer said in a Sept. 16, 1909, editorial titled A New Era of Prosperity. "Today Taft himself looking at conditions all over the country in his characteristically calm, unemotional and judicious manner says, "We are, I believe, unless all signs fail on the eve of another great business expansion, coming into an era of prosperity."

The Tamaqua writer said there were hopeful signs for such optimism. He pointed to a good growing season for farm crops and stable earnings, especially in major industries like the railroads.

Reform was also very much on the mind of the Taft administration in 1909.

Trust-busting is any government activity designed to break up trusts or monopolies. While Teddy Roosevelt is the U.S. president most associated with dissolving trusts, Taft actually signed twice as much trust-busting legislation during his presidency, eventually issuing 80 lawsuits and bringing to an end 90 trusts in one term.

Taft tried to recharge the recovery by strengthening the Interstate Commerce Commission, establishing a postal savings bank and a parcel post system, and expanding the civil service.

The Tamaqua paper saw the reforms as productive and good.

Citing President Taft, the Courier stated: "A danger that now threatens us is that the 'hum of prosperity and the ecstasy of great profits are likely to dull our interests in reforms and lead us back again into the old abuses."

The local writer said the season of prosperity actually originated with the inauguration of William McKinley. But, a portion of the people "became drunk with the prospects of unprecedented profits and the result was that the country staggered and almost fell under the weight of over-capitalization and divers others forms of financial wild-catting."

The writer hoped that hard lessons had been learned from the economic frenzy of 1908, and that financial and industrial institutions were once again firmly anchored.

"That the people will profit by their experience and take pains to foster and protect the prosperity that comes to us, there is little doubt," he said. "Like burnt children, they now fear the fire."

In order to solve an impasse during the 1909 tariff debate, Taft proposed income taxes for corporations and a constitutional amendment to remove the apportionment requirement for taxes on incomes from property (taxes on dividends, interest, and rents).

The enactment of a corporate income tax (16th Amendment) laid the groundwork for acceptance of the idea of a personal income tax.

The Courier, in an opinion on Aug. 31, 1909, saw the use of taxes to help support the aged and helpless as a positive step. Many of the writer's views are similar to today's proponents of health care reform.

"The deep-seated dread of going to the poor house crops out in stories in the newspapers daily and each time the heart vibrates with sympathy toward the unfortunates who are compelled to go to a place that we are taught from childhood to look upon with loathing," the writer stated.

He said if every man with an annual income of $20,000 was taxed, the revenue could be used "as a means toward brightening the lives of the aged man and aged woman who have worked hard and who, as a result of circumstances over which they had little or no control, find themselves in the sunset of their lives without the means wherewith to support themselves would it not be a noble charity to brighten the declining years of these people? And who could better afford to contribute to such a charity than the man who has an income in excess of $20,000?"

The writer explained his "taxing of the rich" proposal.

"Attention should be called to the fact that we can not all be successful in this world and we can not all lay aside a competency for old age," he said. "Misfortune, lack of ability, physical defects and ungrateful children - all these things may contribute to throw a man or a woman upon the barren shores of poverty when the hair has become silver and the eyes dim."

"Should the man, who has plenty, ask the cause of their misfortune or should he aid them with only the thought in mind of making their few years on this earth bright and happy for them?"

He ended with a statement which is being echoed today by many proponents of health care reform.

"To tax swollen incomes to provide for the worthy aged poor would be an act against which few men would raise their voice," he said.

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