Twenty Cents out of every Dollar of the income of the people is the cost of government in the United States (Oct, 1932)

I think this is an ad against government spending, but honestly it’s so mild and informative that it’s hard to tell. Whereas today we have crazy ass ads like this one (video) from Herman Cain, who at one point in this election season was the Republican front runner.

Twenty Cents out of every Dollar of the income of the people is the cost of government in the United States

THE United States, your State, your City or your County must depend on taxation to pay its current expenses, to carry on its undertakings, to pay off its bonds.

Every one—rich or poor—bears a share in the tax burden.

Some pay income taxes, estate or inheritance taxes, specific duties or excise taxes. But all are taxed indirectly by the necessary inclusion of taxes in the cost of food, clothing, rent, merchandise, transportation and other necessities obtained through the merchant, the landlord, the transportation companies and others who, themselves, are taxed.

While the population of the United States increased by 29 per cent between 1913 and 1931, the expenditures of Federal, State and Municipal Governments increased by 375 per cent.

The only sources from which money can be obtained for the payment of such expenditures are the men, women and children of the country—by taxation, direct or indirect. Bond issues merely postpone the day when the expenditure must be paid for—by taxes, for there is no other method.

The only control over such expenditures rests with representatives of the people chosen for executive or legislative positions by the voters in their own communities.

Governmental expenditures constituted 8 per cent of the national income in 1913 and 20 per cent of the national income in 1931.

Expenditures by Federal, State and Municipal Governments equal 1/5 of the income of the American people—one day’s income out of five.

Metropolitan Life Insurance Company Frederick H. Ecker, President

One Madison Ave., New York, N. Y.

6 comments
  1. JMyint says: November 5, 201211:13 am

    Today the bottom 47%, you know the ones that don’t pay income taxes, pay 27.5% of their incomes in federal taxes.

    This add still doesn’t explain itself other than to say taxes went way up for no particular reason. But there were many reasons such as paving roads, national electrification, improvements in services, a better national defense and repayment of war bonds. All things that I am sure the people are in favor of like the $660 a year each taxpayer has to pay for the war.

  2. mcubstead says: November 5, 20124:01 pm

    If I recall correctly, it’s been a while since I had that course, but this is one of a series of ads promoting the stability of the company. The depression was still ongoing, so the few stable insurance companies started advertising the fact they backed (funded) their policies by purchasing government bonds and other government backed investments. In the 30’s most people were clueless about how life insurance and other long term deals were funded. People couldn’t understand why banks were failing; companies were going broke daily, and their personal saving were lost, but insurance companies were growing larger. They were educating the public and providing the sales staff a response to ”Yea, but you’ll go bust before I die”. To that rejection the staff could respond, “No we invest your premiums in government bonds, and as long as there are taxes, those bonds will pay out.”

    While the wording today seems a lot off point, at the time the company was covered in the news about as much as Apple or Facebook is today. They had carried the notes on such projects as the Empire State Building, the Rockefeller center. Remember over a third of the population had just lost it all to “Bad or worthless stocks” and yet every day this company was putting 100’s millions into major public projects. There were also several congressional inquiries as to where that money came from. I suspect these ads were also an indirect reply to those questions.

    FYI You should see all the medical and personal health care ads they produced in this time period. Many people give them credit for inventing public health awareness ads.

  3. Charlie says: November 5, 20129:30 pm

    Thanks, mcubstead for an excellent explanation. That makes a lot of sense.

  4. Toronto says: November 6, 20124:45 pm

    Yes, thanks, mcubstead!

    Modern US and Canadian governments sometimes think they’ve found another way to repay bonds instead of through taxes – through the sell-off of public resources. Be it “surplus” schools, national parks, or in Ontario’s case, a toll highway, these bright ideas are almost always anti-democratic and bad for the country in the long run if not sooner.

  5. quadibloc says: December 16, 20123:29 am

    Today, taxes are about half of the GNP. So this ad might seem amusing, but it is true that the government taking two tithes of the national income rather than just one is, at least in the abstract, already excessive as a mere overhead cost. Of course, the government does provide useful and necessary services, so this isn’t a simple issue.

  6. Charlie says: December 17, 20123:31 pm

    According to the OECD US Taxes are about about a quarter of the GDP, not half. (The US GNP and GDP are roughly equal) http://www.oecd-ilibrar…

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