Why the U.S. should raise taxes, just as it has in previous conflicts
American army combat platoon leader Second Lieutenant John Libs (center) of 2nd platoon, C Company, 2d Battalion, 16th Infantry Regiment, 1st Division, surveys the situation with his men from the relative safety of a watery rice paddy as they prepare to advance on a Viet Cong sniper position, Vietnam, mid 1960s.
August 9th, 2011
04:19 PM ET

Why the U.S. should raise taxes, just as it has in previous conflicts

By James Wright, ForeignAffairs.com

After the United States invaded Afghanistan in 2001 and Iraq in 2003, the costs of these wars ballooned. In 2010, the United States spent $167 billion on “overseas contingency operations” in these theaters - a figure that includes expenditures by the Defense and State Departments and the U.S. Agency for International Development but excludes spending on the Department of Veterans Affairs.

The economists Joseph Stiglitz and Linda Bilmes estimated in 2008 that the wars in Iraq and Afghanistan will eventually cost $3 trillion, and they now acknowledge that the number may be even greater. Much of the expense for these wars has been financed by debt or represents future obligations.

Now, with U.S. forces mostly out of Iraq, the debate in Washington’s foreign policy circles has focused primarily on the war in Afghanistan, with some critics, concerned in large part about the war’s costs, advocating an accelerated withdrawal strategy.

The biggest controversy in Washington this summer, however, has been over the federal budget and debt limit. It is no secret that the wars in Afghanistan and Iraq have contributed to the debt and to budget deficits. Yet other than some symbolic antiwar suggestions, no political figures have proposed actually paying the cost of these military actions today.

It is time for this to change: Congress should consider enacting a wartime surtax, as it has done for nearly all past U.S. wars.

The current arrangement is unfortunate, since it means that the vast majority of Americans share none of the costs of war; instead, the burden is shouldered almost exclusively by the men and women fighting the wars and their families.

American military personnel have suffered through multiple deployments and endured disabling casualties; their families and personal lives have been disrupted and sometimes permanently shattered. Over 6,100 Americans have died, and more than 44,000 have been wounded (a figure that only counts physical wounds).

Read: America's coming retrenchment.

In mid-July, I visited the National Naval Medical Center, in Bethesda, Maryland. The numbers of patients in the wards were as high as I have seen them in recent years, and the injuries were severe; everyone I met had been in Afghanistan, where explosives are now the Taliban’s weapon of choice. Americans insist that they “support the troops.” But for most of them, it has been a cost-free form of support.

Part of the problem, as former Secretary of Defense Robert Gates and Chairman of the Joint Chiefs of Staff Mike Mullen, among others, have pointed out, is that the soldiers serving in today’s military are not representative of the U.S. population.

They are disproportionately from small towns and rural areas, from the South, the Midwest, and the Great Plains states. And they represent a sliver of the population. About one-half of one percent of the U.S. population is in the military today; during World War II, the proportion was over 10 percent. Back then, most families, neighborhoods, and communities in the United States watched their young men go to war. Today, few Americans know anyone on the frontlines.

For the generation who established the United States, the assumption was that a democracy’s wars would be fought and paid for by its citizens. This dual obligation was supposed to serve as a restraint on entering wars and a continuing reminder of their costs.

George Washington insisted that every citizen owed a “proportion of his property” and his personal services to the nation’s military in wartime. Today’s wars, by contrast, are fought by other citizens’ sons and daughters, husbands and wives, and they will be paid for by the children and grandchildren of today’s generation. This is out of line with tradition. Beginning with the War of 1812 and up through the Vietnam War, Congress levied special taxes to pay for its wars.

Read: Globalization and unemployment.

Without a central government, the colonists who fought the Revolutionary War had to fund their efforts through debt, which was later assumed by the new government.

During the War of 1812, the anti-tax Jeffersonian Democrats insisted they could carry on the conflict without levying any new taxes, but they had to back down from that position as the war’s costs exceeded wartime revenues. The government imposed higher tariffs, a national property tax, and new excise taxes on the sale of certain goods. For the Mexican War of 1846–48, surplus tariff income covered the costs.

During the Civil War, both the Union and the Confederacy had to resort to income taxes. Some Southerners, concerned about a government with such strong confiscatory power, were especially resistant to the Confederate tax, but the necessity of collecting revenue prevailed.

In the North, the Revenue Act of 1861 marked the first instance of a federal income tax (of three percent), but the tax affected only a very small high-income group. During the war, that tax was expanded somewhat, and Congress also levied an estate tax. The Spanish-American War of 1898 was financed by, among other things, a renewed estate tax and a telephone tax.

War taxation expanded in the twentieth century as major wars became even more expensive. The bill for World War I totaled some $32 billion. With a “pay as you go” philosophy, Congress raised a significant amount of revenue by expanding income taxes (establishing very high rates for the wealthiest Americans), inheritance taxes, and war profits taxes on businesses. Debt, however, still covered most of the war’s costs.

World War II witnessed the most massive mobilization in U.S. history - military and fiscal. The U.S government spent some $200 billion on the war; by 1945, military expenses equaled over 37 percent of GDP and nearly 90 percent of federal spending.

Read: Tent revolt in Tel Aviv.

The government held large public bond drives, and the number of Americans paying income taxes grew dramatically as the threshold for income taxes was lowered and as the implementation of the withholding tax assured payment.

During the Korean War, House Speaker Sam Rayburn, a Democrat from Texas, insisted that the United States should not finance the war with debt. “I think the boys in Korea would appreciate it more if we in this country were to pay our own way instead of leaving it for them to pay when they get back,” he said.

Republican leaders such as Senator Robert Taft and Congressman Richard Nixon agreed, and Congress approved President Harry Truman’s war tax. In 1968, a bipartisan congressional vote also supported a surtax when President Lyndon Johnson belatedly asked for taxes to pay for the war in Vietnam. Johnson’s aversion to this tax was part of his reluctance to ask for any sacrifices for the Vietnam War - except from the disproportionately blue-collar army that was fighting it.

Since 9/11, no national leaders have proposed that the country actually pay for the current wars. In fact, the theme from the outset has been to reduce taxes - a response without a wartime precedent in American history. And for the last two years or so, the mantra in Congress has been to not impose any additional or restored taxes on anyone. Only recently has the financial cost of the wars even been part of a public discussion.

It is long past time for Americans to affirm their common responsibility and share in some way in the sacrifice of war. Congress should consider enacting a surcharge on individual and corporate taxes that would retire the debt accumulated by these wars, pay their current operating costs and establish a fund that would provide for veterans. This new tax could be deferred until the still fragile U.S. economic recovery gains strength. It would conclude when the wars have ended and the debt and obligations have been met.

A surtax would spread this cost over multiple years, and the rate could be applied progressively. Soldiers and their families should be exempted for some number of years for every year served, and families with casualties who had been principal taxpayers or dependents should receive a permanent exemption. A war tax would not mean that all Americans were sharing the full burden of war, but it would be a start.

President Woodrow Wilson’s Treasury secretary, William Gibbs McAdoo, took issue with those who resisted special taxes to pay for World War I. “Should we be more partial and tender to those who are protected in safety at home,” he asked, “than we are to those who make the supreme sacrifices for us in the field of battle?”

Who has asked for sacrifice today? The country’s political leaders might be surprised at the willingness of Americans to share, in some clear way, in the burden of war. After all, this is the United States’ historic legacy.

The views expressed in this article are solely those of James Wright. For more excellent long-form analysis, visit ForeignAffairs.com

Editor's Note: James Wright is Professor of History, President Emeritus of Dartmouth College, and the author of a forthcoming book on the history of U.S. wars and those who have fought them. A former U.S. Marine, for the last six years he has been visiting and counseling in military hospitals and involved in programs supporting veterans.

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soundoff (28 Responses)
  1. Justin

    I totally agree. But if you let the tea party tell the narrative, they've already been taxed enough. This is the worse congress I've ever witnessed.

    August 9, 2011 at 6:37 pm | Reply
    • SteveB

      Most Americans would say they don't want to pay more taxes. The Tea Party has just made that their mantra. I'm not part of the Tea Party, but I will tell you I'm tired of paying more and more taxes for every new idea the government can dream up. While the economics might suggest a tax to support the cost of the war is justified, I don't think any President would think twice about going to war just because it means Americans would be taxed more. We don't typically go to war or not go to war because of the financial cost. I don't think a war time tax would change anything other than how Americans spend their money here in America.

      August 10, 2011 at 12:23 pm | Reply
      • Ren

        I agree with the premise..the history..but..some of these taxes still do exist..which means anything coming into place..will not go away..please investigate this...CASPIAN SEA OIL LINES..this was a Bush n ..Chaney ..undertaking.Starting in 1999....money was funded to pay for these expensive lines..where is the money..where is our investment..why is no one talking About this..since the American.people paid with our money and our young American Blood. To defend ..someone..anyone..can u give the American people the truth..

        August 10, 2011 at 12:34 pm |
    • BostonDawg

      Yes exactly – you moron.... had the tea party not held their ground the US debt would have been downgraded to AA – the democrats would have continued to receive a blank check and the country's debt would have been significantly increased and you would be happy as a pig in s hit..... you are probably part of the 51% of American taxpayers who pay absolutely nothing in taxes. Those big bad successful people who get up and go to work everyday and believe in personal responsibility and hard work and faith, etc. are just so mean because they pay almost all of the taxes in this country so that most don't have to pay a penny and an increasing number don't even have to go to work.

      August 10, 2011 at 8:00 pm | Reply
      • LT Fang

        The stat of "51% of Americans pay absolutely no tax" is false.

        http://www.sodahead.com/united-states/the-myth-that-47-of-americans-pay-no-taxes/question-1986041/

        August 11, 2011 at 4:27 am |
  2. jack lynn

    Bilmes and Stiglitz showed that there are also long-term costs for taking care of the veterans for decades into the future. We should have a tax that is ONLY dedicated to veterans care, because history shows that will be cut after the wars finally end and we move on to other conflicts.

    August 9, 2011 at 10:37 pm | Reply
  3. j. von hettlingen

    Four years ago the then Democrat Congressman David Obey called for a tax to pay for the war in Iraq. Two years ago he reiterated the same concern and called for a tax to pay for Afghanistan.

    August 10, 2011 at 6:48 am | Reply
  4. Onesmallvoice

    If they raise taxes to pay for all of these useless and unnecssary wars, just guess who'll foot the bill? The poor, the elderly and the middle class as always, not the wealthy! All of this just to crush Islam and make it a thing of the past, if possible!

    August 10, 2011 at 9:02 am | Reply
    • BostonDawg

      The poor, the elderly, and the middle class pay almost nothing in taxes. The top 10% of the taxpayers pay 70% of the taxes. Over half of the people that work in this country pay absolutely nothing in taxes. I am so sick and tired hearing about how the poor and elderly will have to pay this debt when we have a president whose only goal in life is to compile as much debt as humanly possible in his 4 years in office such that at some point the taxpayers who have not even been born yet will eventually pay down the debt. It becomes more and more apparent everyday that our inner cities are becoming third world countries but idiots like you somehow think they are the ones that will bear the brung of this debt issue. What is even more apparent is that the only thing the poor contribute to this country is the creation of more poor people. One would think that at a time when America should be progressing and evolving even more we find that the country is being destroyed from within.

      August 10, 2011 at 7:56 pm | Reply
      • JayV

        That's twice you've made the false claim that 51% of Americans pay no taxes. It wasn't true the first time you said it, and I can't imagine it's gotten any truer since.

        August 29, 2011 at 1:08 pm |
  5. Thor

    ...but of course you won't post my comment!

    August 10, 2011 at 11:48 am | Reply
  6. fernace

    Our occupations in Iraq & Afghanistan need to end , troops need to come home! Then those on the Super-Panel with ant guts should be willing to streamline the military budget, cut all the blubber & use the surplus a) to help pay down deficit b) to help pay for veteran care, which will be crucial with so many coming home! Loopholes, taxbreaks,excemptions,subsidies for the rich & large corporations need to cease! All necessity programs need to be scrutinized & better monitored for those "working the system"! Research & pet projects need to also be scrutinized! We can leave no stone unturned, if we want to get back on our feet! Then there has to be a budget mandate that prevents these kinds of disasters to happen again! That's what citizens who go through bankruptcy do & our country is bankrupt!!

    August 10, 2011 at 12:29 pm | Reply
  7. fernace

    Sorry, "any" not "ant"!

    August 10, 2011 at 12:32 pm | Reply
  8. Alexander

    This is a very thoughtful article appealing to the founding principles of the United States, War for
    Independence, George Washington, Jefferson, Adams, etc...

    The problem is that the current wars - predominantly Iraq, Afghanistan, and Lybia but also few other
    recent minor skirmishes - DO NOT FIT into the historical parallels to which the author appears.
    These wars are wars of choice, wars of opportunity, wars for special interests, and wars resulting
    from refusal to admit simple foreign policy blinders (e.g., support of Mudgaheddin/Taliban in
    Afghanistan in 198x and 199x). These new wars have nothing to to with the United States national
    survival and well being. Citizens of the Unites States have very little to say when starting these
    new wars (although some of them were temporarily confused by the rhetorics, and some still
    remain confused), and therefore Citizens of the United States SHOULD NOT OWE ANY EXTRA
    TAX BURDEN in support of these new wars.

    August 10, 2011 at 3:09 pm | Reply
  9. Lawrence of Massachusetts

    Case for not raising taxes, but perhaps implementing tax reform.

    1 53% of Americans pay zero Federal Income taxes – this is unsustainable
    2 30+ million illegals in this country pay zero federal income taxes – this is criminal
    3 America has the highest corporate tax rates among industrialized nations in the world - this has casued US corporations to take operations and jobs oversease – this is counter intuitive to raise corpporate taxes

    What we need is some common sense tax reform - AND, sorry, we need to get those 53% of Americans and those 30+ million illegals on the tax rolls, even if for a small amount. A more balcned way to raise taxes is to go to a federaL CONSUMPTION TAX –MAYBE A 1% OR .5% FEDERAL SALES TAX -

    August 10, 2011 at 4:23 pm | Reply
    • Lawrence of Massachusetts

      I would not make a case for raising taxes simply becasue of the idiotic was we are in - we could save more money if we just ended our occupations and brought all our troops hime NOW. Our mission in Iraq was to find WMD – there wasn;t any - call it a day and pull out nOW Our mission is Afghan was to get the people who hit us on 9-11 – we have done that – no need to stay there supporting a corrupt regime which will fall apart when we leaVE WHETHER THAT IS IN 1 YEAR OR 25 YEARS Afghan is a tribal country and always will be

      End the charade in Libya - The US funds 75% of NATO – soeven if we are not doing the finghting any more, we are paying for it.. Pull the funding plug and see if our NATO colleagues keep up the fighting doubt it

      August 10, 2011 at 4:27 pm | Reply
    • JayV

      The reason that half of Americans pay no federal income tax is because... they're too poor to owe any. Why doesn't anyone who keeps repeating this number say it the other way around? "Half of America is too poor to be taxed." I guess when you say it that way it has a different spin to it.

      August 29, 2011 at 1:10 pm | Reply
  10. Delos

    The main reason these war's were ran off the book's was because without shared sacrifice this keep the average american out of the way.

    August 10, 2011 at 4:43 pm | Reply
  11. Peikovian

    Why don't we just kill the rich and dress up in their clothes?

    August 10, 2011 at 6:37 pm | Reply
  12. Erky

    These wars are nothing more than a massive transfer of wealth to the uber rich defense corporations, contractors and wall st. The poor pay for it by sending their children off to war, the middle class eventually picks up the financial tab and the rich folks rake in the dough. And another thing, in NO article I've read in the US media (including the sold out liberals) has anyone addressed the question, how many innocent people have been killed in Iraq and Afghanistan? Probably millions. Not a single so called Christian leader has stood up and called it out. These wars have resulted in moral and financial bankruptcy of this nation. Millions of innocent people killed in response to the actions of a few fanatics – talk about indiscriminate.

    August 10, 2011 at 7:13 pm | Reply
  13. BostonDawg

    "these wars have resulted in the moral and financial bankruptcy blah blah".... Obama has added more debt than in the prior 16 years prior to his election, enough said. You don't want the transfer of wealth to people that work, you want the transfer of wealth that have no intention of ever working and quite frankly have no incentive to ever participate in what most would call being an American.... that and the elderly receive 3 to 5 times more in benefits than they ever put into the system yet they cry foul "I paid in my whole life"..... so they bought a pint of ice cream for 40 years and now the rest of us have to give them a gallon of ice cream a week for the next 25 years..........

    August 10, 2011 at 7:50 pm | Reply
  14. Peikovian

    James Wright has only gone part-way. Raise taxes, double salaries, cut the work week, nationalize industry, create production quotas, leave the nation undefended, inflate the money supply, loot the stores, shoot your neighbors. That about covers everything we require to be like other nations, most of them in the failed orbit of the French colonial trading empire.

    August 10, 2011 at 10:25 pm | Reply
  15. krehator

    Negative!

    The more you give to big brother, the more they waste. They never give anything back either. Instead they just shift it around and cook the books. They just lower taxes in one area and raise them in another. Why? People are tools and cannot tell the difference.

    August 11, 2011 at 6:01 am | Reply
  16. Invictus

    How about we stop thinking the only solution is raising taxes and cutting social security. How about looking for different ways to cut the deficit. For example Iraq is currently auctioning off their oil reserves. China, Russia and other countries with the excelption of US oil companies have purchased they reserves for billions of dollars. Why has the US not received any of these monies to pay the debt. We were consistently assured by the politicians that the revenue from the war woulld more than pay it off. How about selling the post office to the private sector? How about taking the federal retirement funds and pouring them into social security. What about reducing the federal employee work force and ineffective department/agencies. Let's try other alternative solutions!!!!!

    August 11, 2011 at 10:01 am | Reply
  17. JayV

    How much are we paying in taxes already, to support the war in Iraq? 5 or 6 billion a month or something like that? I don't want to "share the burden" of a war for corporations. Why is it they start the wars but we're the ones who have to fight them? We already pay: in corpses. Enough is enough.

    August 29, 2011 at 1:17 pm | Reply

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