Beardsley Ruml’s 1943 victory over President Franklin D. Roosevelt on tax forgiveness led to broader debates on U.S. fiscal policy. In a provocative 1946 article, he argued that taxes for revenue were obsolete and the government had other means to meet financial requirements. Taxes, according to Ruml, were tools for social and economic reform, challenging traditional public finance beliefs. Despite being the chair of the Federal Reserve Bank of New York, Ruml advocated for abolishing the corporation income tax, calling it an evil tax.
Published post-war in American Affairs, Ruml’s article reflected on the relationship between government and business, emphasizing the practical effects of taxation on businesses. He questioned the need for taxation when governments had central banking systems and could borrow to meet financial needs. Ruml outlined four principal goals for fiscal policy, including stabilizing the purchasing power of the dollar and redistributing wealth. He argued that taxes should serve the public interest and be judged based on their impact on society.
Ruml discussed the negative consequences of corporate income taxes, labeling them as harmful to production, purchasing power, and investment. He argued that corporate taxes distorted managerial judgment and created double taxation on shareholders. Ruml advocated for the abolition of the corporate income tax, citing its negative effects and calling it an evil tax that needed to be repealed. He believed that the tax did not serve public purposes and hindered economic efficiency.
While Ruml’s ideas resonated with modern monetary theory (MMT) advocates who question the importance of tax revenue, some scholars argue that Ruml’s views were not as radical as they might seem. Ruml’s advocacy for corporate tax repeal was part of a larger plan for fiscal policy that aligned with conventional business community interests. His arguments challenged traditional beliefs about taxation and government funding, emphasizing the need for taxes to serve specific social and economic goals rather than simply generating revenue.
Ruml’s article in American Affairs sparked debate about the role of taxation in government operations and its impact on businesses and society. His call for the abolition of the corporate income tax raised questions about the effectiveness of current tax policies and their alignment with broader economic objectives. While Ruml’s ideas may not have been as radical as some perceive them to be, his arguments highlighted the importance of considering the social and economic consequences of taxation in shaping fiscal policy.
