Illustration by T.M. Detwiler.On March 23, Democratic House Committee Chairs Carolyn Maloney and Gerry Connolly called attention to an increasingly dire emergency. “Based on a number of briefings and warnings this week about a critical falloff in mail across the country, it has become clear that the Postal Service will not survive the summer without immediate help from Congress and the White House,” in a statement.
Medicines are going into people's homes through the post office,' he says. 'Even in ordinary times, there's 1.2 billion packages of medicine,' and '.
The Democrats are pushing debt forgiveness and financial aid for this most vital part of our public infrastructure. But there’s an additional step that can be taken that doesn’t add to the deficit or compete with other priorities: an excess profits tax. Since we are now in “,” according to the White House, it’s important to recall some fiscal lessons from previous wars. One month before entering World War I, with the nation already mobilizing for the conflict, President Woodrow Wilson an excess profits tax designed to curb war profiteering and raise revenue from the rich. By 1918, corporations were being taxed from 30 to 80 percent of their estimated excess profits. Simultaneously, the maximum income tax rate was hiked to 77 percent, a 1,100 percent increase over the 1916 rate.
The government took over the railroads for the duration of the war. At the end of the conflict, the railroad unions fought a for their permanent nationalization.
Meanwhile, the excess profits tax remained in effect until the inauguration of Warren Harding in 1921.The tax, however, had been unevenly and loosely implemented, allowing banks and corporations, especially munitions makers, to disguise profits. In 1934 a special Senate committee headed by North Dakota’s Gerald Nye labeled them “” and investigated their role in pushing the country into war. (The young Alger Hiss was one of the committee’s lawyers.). The United States declared economic war on the Axis powers with the passage of the in March 1941. Nine months later, after Pearl Harbor, War Powers Acts passed by Congress preserved the 1940 excess profits tax and its 7 percent limit. In addition, President Franklin Roosevelt struck back against the people he called “,” signing an executive order in October 1942 that authorized a 100 percent “” on incomes over $25,000 (about $390,000 today).
Although Congress repealed it five months later, it was popular with some sectors of the public. The coronavirus pandemic has produced a profiteer whose power to exploit the emergency far exceeds that of the steel industry or munitions makers during the past century’s world wars. Amazon’s business volume and earnings, of course, are growing at an almost incalculable speed, but there’s a bigger story: The current crisis is almost certainly an extinction event for tens of thousands, perhaps hundreds of thousands, of small businesses and franchises. This will hugely expand Amazon’s domination over retail distribution, especially as home delivery permanently increases its scope. Amazon is becoming the largest monopoly in world history.Today’s progressive Democrats should be at least as bold as Wilson, Roosevelt, and Harry Truman and draft a new excess profits tax bill in the House, with Amazon particularly in mind.
Here’s a revenue stream that could not only save the Postal Service but rebuild it after years of budget cuts and unfair competition with FedEx and UPS.Socialists, of course, need to go much further and recognize that Amazon has become an essential infrastructure, along with privately owned power and communications systems. Some progressives like Elizabeth Warren urge trust-busting and forceful regulation. But the Debsian solution is this: Nationalize the infrastructure of the digital age—including Amazon and private delivery services—and operate it as a series of democratically administered public utilities.