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Toon News -- korkis' kartoon korner

Jim Korkis is an award winning teacher, a professional actor and magician, and a published author. He is an internationally recognized animation historian and Disney authority.

Larry's Toon Institute PaintbrushesDONALD DUCK PAYS HIS TAXES

When you pay your taxes this year, give thanks to Walt Disney and Donald Duck. Once upon a time, there was no income tax. However, in 1942, things changed.

A year after the United States joined the Second World War, Uncle Sam was strapped for cash to pay for the war effort. The voluntary income tax had been in place for 29 years, but for Constitutional reasons, fewer than 11 percent of Americans had to pay the income tax at that time. As a result, Congress enacted into law the Victory Tax Act of 1942, which included concurrent law for automatic wage withholding. The government attempted to legitimize these new laws by citing Article 1, Section 5, Clause 2 of the Constitution: "To support Armies but no apportionment for money to that useshall be a longer term then 2 years."

This new income tax, like the Federal income tax already in existence, was delegated to the Department of Treasury. Hence, it violated the Constitution by ignoring the "separation of powers" clause by giving a Congressional power to an Executive delegate. This specific transfer of power was determined as unconstitutional by Congress on September 14th, 1787, when a motion was proposed to transfer the power of tax collection from Congress to the Treasury Department. That motion was declined.

The new legislation gave Henry Morganthau, then Secretary of the Treasury, the two voluntary income taxes that he needed Americans to voluntarily comply with. In December, 1942, Morganthau came up with a brilliant idea to encourage Americans to part with their money: by making the income tax a patriotic duty. To help implement this idea, Morganthau had John J. Sullivan, a Treasury Deptartment official, contact Walt Disney. Walt was asked to fly to D.C. to discuss an urgent special request. At first, Walt was reluctant, but Sullivan insisted until Walt agreed. Sullivan did not disclose the purpose of this meeting, and Walt assumed it had to do with the promotion of War Bonds. The next day, when Mr. Disney arrived to meet with Morganthau and Internal Revenue Commissioner Guy Helvering, it was announced that the U.S. wanted Walt to "help us sell people on paying the income tax." Confused, Walt questioned why the government just didn't jail people who did not pay the income tax. Mr Helvering retorted, "Walt, we want people to be enthusiastic about paying their taxes." Walt did not know that an unconstitutional income tax could not be used to jail American citizens for non-payment.

Walt headed back to California with a six week deadline to make a short film and get it into the theaters in February of 1943. Production on other projects was dropped, and a full time work force labored around the clock on the new film. When the preliminary storyboards were completed, Walt headed back to Washington to preview them to Morganthau.

The story started with Donald Duck, a patriotic little fellow reluctant to pay income taxes. Listening to a radio broadcast about taxes, Donald progressively realized that paying the income tax would help win the war. With a whole new attitude, Donald quickly goes to work filling out his income tax return. Donald becomes so enthusiastic about paying the tax that he races from California to Washington to submit his tax return in person.

Walt had finished his presentation. There was a brief silence and Morganthau's secretary spoke out that she hated Donald Duck. An aide stated that he expected to see "Mr. Average Taxpayer." Mr. Morganthau made no comment. Insulted and very angry, Walt defended his project and argued that using Donald Duck was like MGM loaning the talents of Clark Gable to the film project THE NEW SPIRIT because Donald was Disney's biggest star at the time. In addition, brother Roy in a memo to Walt had pointed out that since the short was being given to theaters free, the theaters who already had booked in Disney shorts would cancel and replace it with the free short. (This warning proved true and the Disney Company eventually lost over $40,000 in bookings when theaters cancelled which was a harsh blow since the Disney Studio started the fiscal year over a million dollars in debt.)

Mr. Morganthau eventually reluctantly approved the short. Since income tax payments were due March 15 (back in those days), the Disney Studio had to rush to put together the short in record time since the Treasury Department had not contacted the studio until December 18, l942 Walt later sent a wire to the Undersecretary of the Treasury stating: "From time story was phoned from Washington to completion date and into laboratory totaled only four weeks. This is fastest time ever made on any cartoon production and the fastest service Technicolor has ever given."

For the purposes of the cartoon, tax experts determined that Donald Duck was "unmarried but maintains a home in which he supports three adopted nephews under 16 years of age for whose maintenance he has a legal and moral obligation." Donald listed his profession as "actor" with an income of "$250l.00" but as the head of the family he was entitled to certain exemptions and dependent credits, so his taxes came to only "$l3.00". (Donald's shout of "Taxes to beat the Axis" underscored the patriotic need to pay taxes.) Walt ordered a full scale publicity campaign to coincide with saturation bookings at theaters. THE NEW SPIRIT was an instant success and Walt had agreed to make it "without profit" as he had for all the war related work the Disney Studios did. The Treasury Department estimated that 60 million Americans saw the film, and a Gallup Poll indicated that voluntary submission to the income tax increased 37 percent. Along with "Der Fuehrer's Face," another Donald Duck propaganda film THE NEW SPIRIT was even nominated for an Academy Award in documentary short subjects in 1943!

After the Treasury Department collected billions of dollars in new revenue, Walt Disney submitted his bill for $80,000. ($40,000 for the cost of producing the short and $40,000 for print costs. In fact these sums didn't even cover the production costs, merely some of the overhead.) The Treasury Department did not actually have these funds and Morganthau had to submit a request for the money to Congress in a defense appropriations bill. Walt was accused in Congress of being a war profiteer. Republican John Taber from the House of Representatives declared: "Can you think of anything that would come nearer to making people hate to pay their taxes than the knowledge that $80,000, that should go for a bomber is to be spent for a moving picture to entertain people?" Democrat Clarence Cannon challenged the Republicans by pointing out that Disney had donated his services free of charge and that the film normally would have cost $150,000 and that the film was an effective way of spreading the message. The House of Representatives disagreed and disapproved the appropriation on a vote of 78 to 63.

The newspaper coverage stirred public furor and the Disney Studio was flooded with negative letters often with the phrase "Not a dime for Disney". A Rhode Island woman complained to Walt that "Had you GIVEN it, your name would have been venerated, even if it is a quack, quack cartoon." The Disney Studio was forced to write off the venture as a loss. In 1943, the Treasury Department again approached Walt to make another short cartoon to encourage Americans to pay their taxes. Entitled THE SPIRIT OF '43 the short shows Donald torn between a thrifty patriotic duck (who resembles an early Scrooge McDuck) and a spendthrift, zoot-suited duck obviously with Nazi leanings. They are battling over what Donald should do with his paycheck. Donald eventually smacks the free spender and runs off the pay his taxes. This time the Treasury Department asked Congress first and they approved $20,000. That sum was not enough to make a new cartoon so some elements from the previous THE NEW SPIRIT were reused.

Although it didn't generate the publicity of THE NEW SPIRIT, THE SPIRIT OF 43 is actually a stronger film with a clearer storyline. So as you struggle with your tax forms this year, remember the spirit of Donald Duck.


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