F. Scott Fitzgerald’s tax returns, D.C.’s would-be Gatsbys, and the new defense scandals

image The Solomon Scandals mentions F. Scott Fitzgerald—rather fittingly, given his family’s ties with the Washington area, the main setting of the novel. He and Zelda are even buried in suburban Maryland, and their daughter, Scottie, wrote for the Northern Virginia Sun newspaper and was married to a Washington real estate man.

Where else could Scandals itself unfold but the D.C. area? At a gossip columnist’s suicide party at the Watergate, Scandals’s narrator looks over the crowd of Washington lawyers and lobbyists and reflects: “There was Wendy Blevin, the party-party girl, the local Daisy, entertaining a roomful of stodgy, would-be Gatsbys without the guts to set up a still.” Few if any illegal stills exist in D.C., probably—rather, piles of tax money. Just how well is Washington spending it for the taxpayers?

Like any other citizen, Scott Fitzgerald himself had a first-hand interest in the matter, through a not-so-voluntary relationship with a major D.C. bureaucracy, the Internal Revenue Service, and a friend has just passed on an American Scholar article based on Fitzgerald’s tax returns. Four salient facts emerge.

image First, while hardly a miser, Fitzgerald was not quite as much a spendthrift as legend has it—so much of the money went unavoidably for expenses such as his wife’s medical bills. Second, little correlation existed at times between his earnings and the literary merit of his work. “The 1929 ledger,” says William J. Quirk, the author of the magazine piece, “recorded items as small as royalties of $5.10 from the American edition of The Great Gatsby and $0.34 from the English edition.” Third, inflation over the years has been horrendous. During most of Fitzgerald’s career, he typically earned $24,000 a year or about a twentieth of today’s equivalent. Fourth, compared to today, he paid a strikingly small percentage of his income in taxes. “Over Fitzgerald’s working life,” reports Quirk, “he reported a total of $449,713 in gross income, and he paid $24,666 in taxes—thus the effective tax rate of 5.5 percent.”

imageWhy have taxes gone up? In part because of the New Deal and its legacy, and I can understand. I want to see us invest in, say, a well-stocked national digital library system. Spent well, taxes can beget wealth in the private sector through better schools and the rest and open up new opportunities for the nonrich, the Jay Gatsbys as they existed back in Minnesota, or as cash-strapped young veterans. But then there is the wrong kind of spending—such as on Sy Solomon’s rickety buildings, which may or may not fall down. His Vulture’s Point complex houses IRS workers, of all people. In any event, Vulture’s isn’t exactly the most cost-effective use of tax money: why not build something right the first time?

Scandals is fiction, but in real life, we have wasteful wars—in terms of both lives and money—and always, always, we have defense scandals. “Even two decades after the Hunting Lodge Affair,” reporter Jon Stone writes in his memoirs, “some Washingtonians still snicker about Morrison Blevin,” Wendy’s father. “He calculated he’d win five fighter plane contracts for every thousand ducks the generals bagged at his place on the Eastern Shore.” In the grand Washington tradition, the Washington Post today tells us that “nearly half the members of subcommittee on Pentagon spending” are under investigation as part of the newest scandal, involving “more than 30 lawmakers and several aides.”  My theory is that Washington crooks are like cockroaches—you see just a fraction of the total scurrying around in hidden places.

If even someone like Fitzgerald had trouble living within his means, imagine the typical citizen and today‘s tax burden. Assuming that all of Washington went clean, I doubt we could push the effective tax rate down to the 5.5 percent that Fitzgerald paid over the years, but I do suspect it would be considerably lower than today.

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David Rothman

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