Federal Revenue Legislation, 1943–1944

The Revenue Act of 1943 will be remembered not only as the first one in history to be vetoed by the President, but also as the cause of an outburst in Congress against the executive capable of affecting the fortunes of the Democratic party in the 1944 elections. The significance of this last act in the drama (to date) may be clarified if we review the fiscal situation of the United States at the time, the Administration's tax proposals, and the revenue legislation actually resulting.In January, 1943, the President's budget message estimated expenditures of $100 billion for the fiscal year ending June 30, 1944. Tax revenues for the same period were estimated at $35 billion. The President made three recommendations: (1) raise $16 billion in new tax revenue, or savings, or both, (2) simplify the income tax, and (3) put taxes on a pay-as-you-go basis. In the summer and fall of 1943, Congress enacted legislation to carry out certain parts of the last two proposals. Public discussion had forced on it some consideration of collecting taxes currently.