Written by Walter Hecht   

Paying for more war(s) in the Middle East. Continuing to wage war(s) on borrowed money will lead eventually to inflation. The Vietnam War is a good example.

To help pay for that war, in 1968 LBJ instituted with the consent of Congress a 10% surtax on Federal income taxes for a period of one year. It helped but was not sufficient. Richard Nixon opposed the surtax, and it was repealed. In 1971, Nixon imposed wage and price controls to fight inflation while the Vietnam War continued. The controls were not effective.

To combat the continuing mild inflation, in 1974 President Ford introduced a voluntary program, Whip Inflation Now (WIN) with WIN buttons. That program was not effective. During the Carter administration, inflation accelerated to new heights because of the lingering effects of Vietnam and two oil price shocks. Carter was defeated by Reagan who broke the back of inflation by means of a short and sharp recession.

Today some argue for further involvement in the Middle East to protect us from ISIS or for other reasons. If the proponents of war offer no methods of paying for intervention, then they can be safely ignored. If we are to fight again, I suggest a surtax, modeled on LBJ's Vietnam era tax. Federal income taxes are computed as they are now. Then a 10% additional amount is added to the total tax. I would add a 10% surtax to the 95% of tax payers at the bottom of the income scale. I would divide the top 5% into two categories, with the group in the top 95 to 99% paying a surtax of 15% and the top 1% paying an additional 20%.

The purpose of the surtax would be to reduce the deficit and pay for the war(s), not leaving payment for future generations and possibly causing inflation, which hurts people on fixed income the most. I actually wrote to President Nixon in 1971 arguing in support of a renewed surtax. He passed my letter to Treasury who responded that a different method of combatting inflation had been selected. A surtax now would have the additional benefit of deterring some of the war proponents from speaking in favor of a war that they might be required to help pay for.