The Machine Taxers

Abstract

Despite lack of support from professional economists, the idea of a tax on labor-saving machinery as a policy to help displaced workers had widespread popular appeal in the US throughout the Great Depression of the 1930s. A response to concerns about technological unemployment, loosely organized and widely spread across the United States, the machine tax movement evolved from conversations among friends and letters to the editor in local newspapers to policy proposals at the federal level. The grassroots effort ultimately failed. In the context of the rise of Keynesian analysis, persistent accusations of an antiprogress bias, and the provision of few details about policy applications, the machine tax proposals faded rapidly after 1940. Given familiarity with an active government role in economic policy and knowledge about taxes as tools of these policies, it should not be a surprise that machine tax ideas reappear when the labor displacing effects of technological change are a major concern. The US economy in the 2010s had these elements.