Franklin D. Roosevelt persuaded Congress to pass the Wealth Tax Act in August, 1935. It was a progressive tax that took up to 75 percent on incomes over $5 million. In a speech he made in October 1936 Roosevelt claimed that the tax had created a great deal of hostility: "The forces of organized money... are unanimous in their hate for me - and I welcome their hatred. I should like to have it said of my first administration that in it the forces of selfishness and of lust for power met their match."

Many wealthy people used loopholes in the existing tax code to evade these taxes. According to William E. Leuchtenburg, the author of Franklin D. Roosevelt and the New Deal (1963): "The outcry from high-income brackets obscured the fact that much of Roosevelt's tax program was sharply regressive. His insistence on payroll levies to help finance social security cut into low-income groups, and his emphasis on local responsibility for unemployables helped stimulate the spread of the regressive sales tax. The share of upper-income groups remained fairly constant through the thirties, and the share of the top 1 per cent even increased a bit after the passage of the Wealth Tax Act."