“The increased buying capacity involved in the twelve to seventeen billion dollars of increased wages and salaries will result in inflation unless much of it is siphoned off in taxes.” (Congressman Whittington of Mississippi, July 17,1942, page 6347)

 “Mr. Speaker, I strongly favor and advocate the enactment of a pay-as-you-go income tax law for individual income tax payers…Seventh.  Such a plan would currently take excess earnings and thereby be somewhat beneficial as a deterrent to inflation.”  (Congressman Ploeser of Missouri, October 6, 1942, page 7689)

 “The most important thing we have before us is the compulsory savings plan to try to get money for bonds, but. In addition to that, it seems to me that even before we go to that the problem of raising money by voluntary contributions should be pressed to a far greater extent than the Secretary of the Treasury has pressed it.”  (Senator Brown of Michigan, October 7, 1942, page 7883)

 From a letter to Senator George, the Chairman of the Senate Finance Committee, written by President Roosevelt on October 3, 1942, we have an indication of what the enforced savings programs were for:
 “Both employment and the income from which contributions are made are at a very high point-the highest since the inauguration of the system.  In fact, the volume of purchasing power is so great that it threatens the stability of the cost of living.  The increase in rates at the present time is not only in accord with the necessities of the social security system itself, but at the same time would contribute to the non-inflationary financing of the rapidly mounting war expenditures.  The accumulation of additional contributions would be invested in United States Government securities and would thereby assist in financing the war.” (Congressional Record, October 9, 1942, page 7893-94)

 “I feel confident that Congress should, in the future, provide for additional revenue by enforced savings rather than taxation and so my amendment would require that all the money yielded by the Victory Tax should be refundable as a savings after the war.  In other words, the perfecting amendment would transform the 5-percent Victory tax amendment wholly into a provision for enforced savings.”  (Congressional Record-Senate, October 9,1942, page 7985; Senator Downey of California)

The other side of the story, as told by Senator Danaher of Connecticut on page 7988-89 of the Congressional Record dated October 9, 1942:

“There were those of us, nonetheless, who felt, out of our experience with people, that the average individual would be simply incapable of saving enough money out of each pay check or each salary payment to have on hand the accumulation necessary to meet the taxes to be imposed upon him under the high rates levied by the bill….
 Mr. President, in an effort to take into account the urgent need of the Government for revenue, particularly if the war be protracted to the point where annually there will be available to the Treasury many billions of dollars of interest-free borrowings, and at the same time reach as many as possible of those who otherwise would contribute nothing because of being exempt for whatever reason….
 Above all, Mr. President, if we could make every individual citizen in the United States a bondholder, if we could make every individual citizen in the United States the possessor of a stake in our economic structure, it would follow that the forces which would otherwise tend to repudiate the ultimate post-war debt would be mitigated.  Obviously, if at the end of this war we find some $200,000,000,000 of necessary War-bond financial output concentrated in the hands of comparatively a few people-say 4 or 5  or 6 percent, or lets say 10 percent, if you choose-the fact remains, Mr. President, that all the remaining people of the country will be unwilling to tax themselves the enormous sums which will be required to amortize those outstanding funds and to pay interest and service charges in them.  Unless all citizens have some interest in that particular economic structure, an unfortunate condition will result.”

    Further Explanation

            See Also:
Social Welfare
Social Security
Enforced Savings
Victory Tax