How Donald Duck Made You Pay Income Tax

by Jim Korkis, contributing writer
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It has been said that the only two things that are certain in life are death and taxes. However, for those of us who struggle with paying taxes, much of the blame should go to 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.

Some 7 million taxpayers who had never filed income taxes before were added to the tax rolls. This new income tax, like the Federal income tax already in existence, was delegated to the Department of Treasury.

The new legislation made Henry Morganthau, then Secretary of the Treasury, realize that he needed to find a way to get Americans to voluntarily pay their taxes in order to cover the ever rising costs of the war. He came up with the brilliant idea to make paying the income tax a patriotic duty. His goal was not only to educate people on how to fill out the tax forms and how simple it was but to emphasize the need for taxes to be paid to win the war.

To help implement this idea, Morganthau had John J. Sullivan, a Treasury Department official, contact Walt Disney. Walt was asked to fly to D.C. to discuss an urgent special request.


Walt created the The New Spirit after a request from the Treasury Department to get people to start paying income tax again.

At first, Walt was reluctant, but Sullivan kept insisting 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 Walt arrived to meet with Morganthau and Internal Revenue Commissioner Guy Helvering, it was announced that the U.S. government 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 called long distance back to his Burbank studio from Washington on Thursday December 18, 1941. He spoke with story man Joe Grant and director Ben Sharpsteen about the new tax picture to try to springboard some ideas.

Walt explained, "The Treasury Department wants us to make a film. This a big order. By that I mean it is a tough job to handle… making people like the fact that they have to pay income tax. It is going to tell how the tax problem plays its part in this war. The Treasury Department wants to put on a nationwide campaign before March 15 and this film will be run in all theatres."

The phone call continued with ideas for what the storyline would be for this short and it was decided that using Donald Duck might be a good idea because of his everyman popularity at the time.

Walt continued, "They need all the help we can give them and they are anxious to get it. Stick to Donald Duck as the main idea. Donald talks to the radio voice and between them they tell the story of the income taxes. "This means that we will be running into over-time to do the short but we've got to move it through. We must pull out our best men for this thing regardless of what they are doing. I want the best men and the men who can work with speed and economy. Don't forget that we are making this on a cost basis and this film will have to cost as little as possible."

It was Morganthau who inadvertently came up with the title for the short. Walt said, "The Secretary suggested this thought… it was a new spirit. That might be a good title for this picture."

Walt headed back to California with a six-week deadline to make a short film and get it into the theaters by February of 1942. 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 a new character representing "Mr. Average Taxpayer." Doing so, he explained would emphasize the seriousness of the situation.

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 called The New Spirit because Donald was Disney's biggest and most popular superstar at the time and that people related to him.

In addition, Walt's 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 $1 million 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 only contacted the studio on December 18, l941.

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."

Wilfred Jackson, who directed the cartoon, remembered, "We were given an absolutely ridiculous, completely impossible deadline for a cartoon with full animation of the Duck in a good-sized part of it, considering the way production procedures were set up in the Disney organization and the way we had all been trained to make Walt's cartoons for him."

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 "$2501.00" but as the head of the family he was entitled to certain exemptions and dependent credits, so his taxes came to only "$13.00". Donald's address on the form is "1313 Hollywood Blvd, Los Angeles, California." He writes check No. 13 for the $13 dollars he owes on the "13th National Bank" on "February 13, 1942". Traditionally in the Donald Duck shorts, 13 is an unlucky number bringing bad fortune.

Donald's shout of "Taxes to beat the Axis" underscored the patriotic need to pay taxes. The full running time of the short is 7 minutes 21 seconds with a total 662 feet of animation. Of that, roughly 389 feet is the Donald Duck animation portion with the remainder of the film done in limited animation, camera moves on still art with optical effects and voiceover narration that was all common techniques used in the animated films Walt made for the government.

It was also common for Walt to re-use animation from previous films to save time and expense. In this short, Walt re-used the whirlpool from The Sorcerer's Apprentice sequence from Fantasia (1940) but it is painted black, white and gray and swallows a swastika.

The catchy theme song Yankee Doodle Spirit was composed by the studio's Oliver Wallace who co-wrote it with Cliff Edwards who sang it. The final shot of the film is a reverse zoom that reveals a watercolor wash sky of multicolored clouds that form the United States flag.

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 for only "out of pocket" costs. Such an agreement did not cover the indirect costs of overhead such as supervision, light, heat, taxes or depreciation. In the future for government work, Disney used the phrase "without profit."

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. The New Spirit was even nominated for an Academy Award in the documentary short subjects category in 1943!

After the Treasury Department collected billions of dollars in new revenue, Walt Disney submitted his bill for $80,000. That total included $40,000 for the cost of producing the short and $40,000 for print costs. In fact these sums didn't even cover the full production costs.

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 Walt 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.

Senator Sheridan Downey from California said:

"The Treasury Department was thinking of the morale, not of our soldiers and sailors but of the taxpayers when it sought the influence of Donald Duck to stimulate and encourage tax payments. Poor Donald too is now in the doghouse placed there by a slim majority in the House of Representatives.

"He had blithely and happily donated his services in the interest of national defense. So, too, had his talented master and creator Mr. Disney. For only a portion of the out-of-pocket money a film of incalculable propaganda value was given our Government.

"Publicity experts say that advertising of equal worth could not be secured by the Treasury for many times the $80,000 it cost. I hope Mr. Disney and his associates will not believe that the Government of the United States and the people of this Nation are as ungrateful and as unappreciative as the vote in the House of Representatives would seem to indicate."

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. Roy admonished Walt about just doing a handshake deal and stressed the need to get proper contracts in place beforehand with the terms spelled out.

Chicago Tribune newspaper drama critic Ashton Stevens wrote, "When a movie laughs you into making out an income-tax return—and borrowing money to pay it on the line, that isn't just pecuniary propaganda—that's magic that partakes of the miraculous."

Thornton Delehanty of The New York Herald wrote, "Walt Disney's first production for the Treasury Department should go an incalculable way toward easing the grief and dismay with which the public customarily views its income taxes."

Ashton Stevens of the Chicago Tribune praised the Disney film for changing "the national bellyache into a national bellylaugh."

Walt received a letter from the War Activities Committee that estimated over 33.5 million people had seen The New Spirit in the 11,800 movie theaters in which it had played.

A three-page comic strip version using 67 panels illustrating a portion of The New Spirit was published in the March 10,1942 issue of Look magazine. The March 16, 1942 issue of Life magazine had a three page article on the film with 24 storyboard-type drawings telling the story.

Within six months in 1943, the Treasury Department again approached Walt to make another short cartoon to encourage Americans to pay their taxes.

Titled The Spirit of '43 as an allusion to The Spirit of '76, the short shows Donald torn between a thrifty patriotic duck (who resembles an early version of Scrooge McDuck) and a spendthrift, zoot-suited duck obviously with Nazi leanings who encourages Donald to waste his paycheck at the Idle Hour Club. Donald eventually wallops 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 but it was agreed that Walt could re-use the majority of the animation from the previous short (since it had been a year since audiences had seen it) and in this way, Walt would be compensated somewhat for most of the animation he had previously produced.

Jack King, a top animation director at the studio was named director of the tax short sequel. He was assigned several animators to the project including Disney legend Ward Kimball. Joe Grant who had written the first short with Dick Huemer and the legendary Carl Barks were assigned to develop the new story.


The Spirit of '43 short becomes a clear classic story of good versus evil much like the traditional angel and devil on a person's shoulders arguing over an action

The last half of The New Spirit was reused in The Spirit of '43. Roy Disney advised against the reuse, saying in a telegram to Walt that, "Regarding Treasury requests for some new material and their plans to reuse last half of New Spirit I recommend that you advise against any secondary use of New Spirit principally on the basis that its effectiveness because of reuse of old material which will be recognized will be lessened with the public and for that reason is poor economy."

He also recommended that the film be kept shorter than the first film not only for financial reasons but because, "…with so many Government pictures crowding the screen time message can better put over by being short." It ended up being six minutes with roughly half the length reused animation.

The Spirit of '43 is considered to be a stronger film than The New Spirit because Donald doesn't just interact with a radio announcer but with the spendthrift and the thrifty versions of himself. It becomes a clear classic story of good versus evil much like the traditional angel and devil on a person's shoulders arguing over an action. The film is better paced and filled with more gags but the backgrounds are simplified and, at times, monochromatic.

Clarence Nash does the voice of Donald Duck and Cliff Edwards, most famously known as the voice of Jiminy Cricket, does the singing voice over in both films.

Fred Shields does the radio announcer voice in The New Spirit. Shields also provided the narrator voice for many Disney shorts including Donald's Decision, Saludos Amigos, How to Play Baseball, How to Play Golf, El Gaucho Goofy and many others.

The ending narration from The Spirit of '43 was "…taxes to beat to earth the evil destroyer of freedom and peace. This is our fight. The fight for freedom. Freedom of speech, of worship. Freedom from want and fear. Taxes will keep democracy on the march."

As a tie-in with the two income tax PSAs, the Disney Studio worked jointly with the Treasury Department on a children's book, The Victory March that was published by Random House in 1942.

The inside back cover of the book had a sleeve that held a war savings stamp album contain a ten cent savings stamp to get kids started on buying and saving the stamps. The plot of the book was Donald Duck and his friends rescuing and protecting their saving stamps from the Big Bad Wolf who was depicted as a Nazi.

The New Spirit (Donald Duck) 357 is a part of a series of 10 screen prints done by artist Andy Warhol in his Ads series that was done in 1985 in an edition of 190.

Like most of the images used in the Ads series. Warhol was commenting on the impact of mass media and in this case, the use of it for government gain. Donald Duck is featured in the middle, in front of a repeated image of Donald giving the sense that he is moving just like in an animated cartoon.

The two Treasury Department PSAs were made in a different era when the entire country rallied against a common enemy. During that period, the Disney Studios relied heavily on these government-funded projects to help keep the studio financially afloat and the artists employed and busy. Since these shorts were produced for the government, the Disney Studio never copyrighted them which is why they often appear on public domain collections of short cartoons.