I’m all for taxing the rich. They seem to have found enough loopholes when it comes to keeping their money anyway. Of course, I reserve the right to reconsider this position if I ever wake up with a billion dollars and several accountants telling me I’m technically incorporated in Luxembourg. For now, though, I can enjoy the long history of governments looking at extremely wealthy people and deciding they needed rules specifically for them. Here are 20 times governments passed laws to cut the rich down to size.
1. The Tax Bracket Built For One Billionaire
President Franklin Roosevelt signed the Revenue Act, commonly known as the Wealth Tax Act, on August 30, 1935. The law set the top rate at 79%, which consisted of a 4% normal tax and a 75% surtax. It hit any income over $5 million. There was only one taxpayer who met this requirement: John D. Rockefeller Jr. One law, one man.
2. The Sherman Act Passed Almost Unanimously
The Sherman Antitrust Act was signed into law by President Benjamin Harrison on July 2, 1890, after passing the Senate 51-1 and the House of Representatives 242-0. The law made illegal any “contract, combination…or conspiracy, in restraint of trade,” and empowered federal prosecutors to dismantle trusts, huge combinations of companies that could dominate an industry. For many years, the act was not well enforced. Standard Oil wasn’t broken up until 1911.
3. Japan's Family Empires, Dissolved By Law
Japan’s parliament passed the Anti-Monopoly Act on April 14, 1947, under the Allied occupation commander Douglas MacArthur. Prior to 1945, four family cartels called zaibatsu, including Mitsui and Mitsubishi, dominated Japan’s heavy industry and finance. The new law broke up the zaibatsu holding companies and expropriated the stock owned by the families. The companies survived, regrouping as looser networks of firms called keiretsu, but the families no longer held personal ownership stakes in them.
4. Britain's Budget That Broke The House Of Lords' Veto
When British Chancellor of the Exchequer David Lloyd George introduced his “People’s Budget” in 1909, it proposed a super-tax on income above £5,000 and a 20% tax on unearned increase in land value. The House of Lords, unelected and aristocrat-dominated, rejected it altogether, breaking with constitutional convention. After the resulting political crisis and two general elections, the budget was finally enacted in April 1910. This conflict resulted in the Parliament Act 1911, which abolished the House of Lords’ ability to veto money bills forever.
5. Rome Capped How Big A Senator's Ship Could Be
The tribune Quintus Claudius put forward a law, the Lex Claudia, in 218 BC, which was supported in the Senate by a fellow senator, Gaius Flaminius. This prevented senators and their sons from having any merchant vessels bigger than 300 amphorae, or around 225 bushels, barely sufficient to carry grain from their estates. In other words, politics was fine; building a shipping empire on the side was not. Many circumvented this by employing freedmen as owners of their fleets.
6. The Land Law That Got Tiberius Gracchus Killed
In 133 BC, Plebeian Tribune Tiberius Gracchus enacted the Lex Sempronia Agraria, which limited the amount of public state land that could be occupied by any individual to 500 iugera, or approximately 310-325 acres. Wealthy landholders had been seizing this public land and turning it into large plantations manned by slaves. Gracchus was killed during the political violence that followed the reform the same year. The land commission it created continued to distribute plots in subsequent years.
7. England's 'Dead Hand' Law Against Tax-Free Church Land
In 1279, King Edward I passed the Statute of Mortmain. Landowners had been giving land to the Church, which never died or paid feudal dues, placing it in what was called “mortmain,” or dead hand. This kept the crown from collecting the feudal payments and services that normally came due when land changed hands. After this act, one needed to obtain a paid royal license to transfer land to the Church.
8. Glass-Steagall Split Wall Street's Banks In Two
After the Pecora Committee’s Senate investigation of Wall Street stock manipulation, President Franklin Roosevelt signed the Glass-Steagall Banking Act into law on June 16, 1933, mandating that commercial banking be completely separated from investment banking. Thus, J.P. Morgan was split into the commercial bank J.P. Morgan and the new investment bank Morgan Stanley. Glass-Steagall also created the Federal Deposit Insurance Corporation to insure deposits.
9. Florence Banned Its Own Nobles From Power
In January 1293, the Florentine reformer Giano della Bella engineered the enactment of the Ordinances of Justice. The magnates, the violent, aristocratic families which had long controlled Florence, were thus excluded from holding executive office, except upon the condition that they gave up their nobility and enrolled themselves in a guild of one of the trades. Being noble had effectively become a political liability. The statute provided for the appointment of a Gonfaloniere, a senior official charged with enforcing the new order, with a military force of 1,000 men to aid him in carrying out his sentences against the magnates who refused to submit.
10. Samuel Insull's Utility Empire Got Legislated Apart
President Franklin Roosevelt signed the Public Utility Holding Company Act into law on August 26, 1935. In the 1920s, eight holding companies owned 73% of America’s investor-owned electric utilities, with Samuel Insull’s $3 billion pyramid of interconnected utility companies at the top. Insull’s empire collapsed in the 1929 crash, wiping out small investors in the process. Insull was tried for fraud, but acquitted. The new law authorized the Securities and Exchange Commission to restrict holding companies to a maximum of two tiers. This meant that many of the largest holding companies would have to be broken up.
11. Even Railroads Wanted This Anti-Rebate Law
On February 19, 1903, President Theodore Roosevelt signed into law the Elkins Act, proposed by Senator Stephen Elkins, which made it a federal offense for railroads to offer secret shipping rebates to trusts like Standard Oil, which then could use those discounted rates to outcompete smaller, independent operators. There was a hefty fine on both the railroad and the shipper. In fact, many railroads favored the act since they were being forced to give rebates as well. When even the companies being regulated want the regulation, something has sure gone sideways!
12. Solon Canceled Athens' Debts And Freed Its Slaves
In 594 BC, the Athenian chief magistrate Solon enacted the “Seisachtheia” or “shaking off of burdens.” This legislation canceled all outstanding land debts, prohibited the use of a citizen’s own person as a loan’s security (which had led to debt slavery), and repurchased Athenians sold abroad into slavery. Solon also constructed a four-tier, property-based political system that broke the aristocratic monopoly on state offices, and turned down demands for a complete redistribution of land.
13. Regulators Finally Got To Set Freight Rates
Congress passed the Hepburn Act with some resistance (led by Senator Nelson Aldrich), but with Theodore Roosevelt’s help, on June 29, 1906. It granted the Interstate Commerce Commission (the federal agency responsible for regulating railroads) the power to establish maximum rates of transportation. It also forbade railroads from giving free passes to politicians. Free rides were over.
14. The First Ban On Corporate Campaign Cash
On January 26, 1907, Congress passed the Tillman Act, named for Senator Benjamin Tillman. It banned corporations and national banks from making direct contributions to federal campaigns, the first federal ban on such giving. At first, enforcement was weak. The law had no federal agency like today’s FEC dedicated to enforcing campaign-finance rules, so policing violations was difficult. The principle held. The rules would be strengthened and expanded over the decades that followed.
15. Henry VII Tried To Stop Landlords From Erasing Villages
Wealthy landlords across England were enclosing village commons, demolishing peasant cottages and turning farms of 20 or more acres into sheep pastures, as wool prices rose. Parliament under King Henry VII responded by passing the Act Against Pulling Down of Towns in 1489. The act ordered wealthy landlords to reconstruct any abandoned houses or lose half of their profits from the land to the Crown. Local landlord-magistrates, however, tended to ignore the law.
16. France Taxed Châteaux By Counting Their Windows
In November 1798, as part of its reforms in post-revolutionary France, the ruling Directory imposed the Door and Window Tax. Rather than audit people’s incomes, the state just counted the number and size of the windows and doors of each property. Grand, glass-laden châteaux of the aristocracy contributed significantly. Humble peasant huts made little or no impact. Your tax bill was, quite literally, written all over your house. The tax remained until 1926.
17. Britain Taxed Aristocratic Fortunes At Death
Britain’s Chancellor, Sir William Harcourt, saw his Finance Act 1894 become law on July 31, 1894. This imposed a progressive “Estate Duty,” or death tax, on the property left behind by the deceased to their heirs. The highest rate was 8% of any estate exceeding £1,000,000. Landed aristocratic families were compelled to pay tax on the worth of ancestral properties, which contributed to the protracted dissolution of Britain’s great country houses over the subsequent decades.
18. The Law That Patched Sherman's Loopholes
On October 15, 1914, President Woodrow Wilson signed the Clayton Antitrust Act, legislation designed to fill loopholes in the 1890 Sherman Act. The act prohibited price discrimination, exclusive dealing contracts, and interlocking directorates, where the same individuals served on the boards of competing firms. It also declared that “the labor of a human being is not a commodity,” shielding peaceful labor unions from antitrust prosecution.
19. A Former Speculator Was Put In Charge Of Policing Wall Street
Joseph P. Kennedy Sr., a former stock speculator, was the first chairman of the U.S. Securities and Exchange Commission, which was established by the Securities Exchange Act that President Franklin Roosevelt signed on June 6, 1934. The legislation mandated that publicly traded companies disclose their financial data and made both insider trading, wash trades, and manipulative stock pools illegal. Roosevelt had a former insider running the rules for insiders.
20. The Income Tax That Never Went Away
The Revenue Act of 1913, also known as the Underwood Tariff Act, was signed by President Woodrow Wilson on October 3, 1913. This law lowered protective tariffs that had enriched domestic industrial cartels and also created a progressive federal income tax. The personal exemption of $3,000 for singles and $4,000 for married couples was set high enough that less than 2% of U.S. households paid any income tax at all.
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