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The tax we love to hate; good or bad? American or un-American? The federal income tax has provoked intense debate, but it has paid for wars and funded America's rise as a superpower. (times past).

In this world, nothing can be said to be certain, except death and taxes.

--Benjamin Franklin

Death and taxes may be certain, but we don't have to die every year.


Taxes have long been a ripe subject for sardonic humor. But few Americans are laughing in the days leading up to April 15--the deadline for filing federal income-tax returns. The complicated forms, the math anxiety, the resentment over giving up part of their paychecks --all contribute to Americans' fear and loathing of income taxes.

In popularity, the tax may rank below dental work. But Americans asked for it literally. When there was no federal income tax more than 100 years ago, a movement arose to create one. Many in the middle and working classes were convinced that the wealthy needed to pitch in more to pay the country's bills, especially the costs of wars. To the non-wealthy, an income tax seemed fairer than a tax on property or sales.

Opponents have criticized the tax as an unfair penalty for success, a blank check for spendthrift politicians, and a bloodsucking leech feeding on wage earners and businesses.

But advocates have viewed the income tax as a source of national unity and strength. "I like to pay taxes," said legendary Supreme Court Justice Oliver Wendell Holmes. "With them, I buy civilization."


In America's first 100 years, lawmakers rarely entertained the idea of a peacetime national income tax. They paid for government operations with a sales tax and tariffs on imports. It was not until 1862 that President Abraham Lincoln and Congress began using income taxes to pay for the Civil War.

But the tax expired in 1872, even as the economy was undergoing the Industrial Revolution. A nation of farms was making way for cities. Wealth was shifting from farmers to businessmen and other professionals. The question arose: Should the rich be taxed more than the rest?

Laborers and small farmers were increasingly saying yes. In 1893, a Congressman from Tennessee, Benton McMillin, argued the case for an income tax rather than a sales tax:

Are we going to put all of this [tax] burden on the things men eat and wear, and leave out those vast accumulations of wealth? ... And yet when it is proposed ... to shift it from the laborer who has nothing but his power to toil and sweat, to the man who has a fortune made or inherited, we hear a hue and cry raised.

The hue and cry reached a crescendo in 1894, when Congress passed a new income tax: Any money earned over $4,000 was taxed at 2 percent. In Eastern cities, where most of the nation's rich resided, the wealthy blasted the new law as class warfare, an attempt by lower-income Americans to use government to grab at their wealth. In an editorial, The New York Times called the income tax "vicious, inequitable, unpopular, impolitic, socialistic," and even "un-American."

But it was the U.S. Supreme Court's criticism that hit hardest. In 1895, the Justices ruled that the tax was unconstitutional, and struck it down.


The income tax would not stay down. By 1909, the federal debt topped $100 million--a huge amount at a time when the average worker earned $597 a year. And the popular belief that the rich were shirking their fair share of taxes had only intensified. National leaders also viewed the proposed tax as a mechanism for raising quick money in the event of war.

To override constitutional issues, income-tax supporters made a push for a 16th Amendment to the Constitution: "The Congress shall have power to lay and collect taxes on incomes." It was added in 1913.

In general, Americans did not find the new tax revolting. For one thing, 99 percent did not have to pay the first year, since there was no tax on incomes below $20,000 (an amount equal to $341,819 in today's dollars).

The need to pay for a new war also helped rally support, as the U.S. entered World War I in 1917. One celebrity made a highly publicized wartime contribution: Famed singer John McCormack appeared at a New York City collection office with a big smile and a check for $75,000 to cover his income taxes. "America gave and America taketh away," he told reporters.

It took another war for the income tax to spread to the American masses. As U.S. involvement in World War II became likely, Congress reached out beyond the wealthy to the middle class, requiring those with lower incomes to help shoulder defense and war costs.


Despite America's wartime patriotism, officials worried that people wouldn't pay their taxes. So the U.S. Treasury enlisted Donald Duck. It paid Disney to produce the 1942 short film The New Spirit, which 32 million people saw. In it, Donald is told that paying his income tax is "not just your duty, but your privilege."

The Treasury also got help from songwriter Irving Berlin, who wrote the ditty "I Paid My Income Tax Today."

You see those bombers in the sky, Rockefeller helped to build them, So did I/I paid my income tax today.

Most Americans sang along. In 1939, they had filed about 4 million income-tax returns. That number reached nearly 50 million by war's end in 1945. As economists Stanley S. Surrey and William C. Warren wrote:

Almost overnight, [the tax] spread from country club district down to the railroad tracks and then over to the other side of the tracks.

Wartime income-tax practices spilled into the postwar years, funding the country's growth into the world power it is today. The revenue was bankrolling not just war efforts, but a vast expansion of domestic programs. This year, the government expects to collect more than $1 trillion in personal income taxes, the current price to pay for civilization.

Where's My Money?

Figure out those numbers on your paycheck stub, and you'll take a small step toward understanding taxes. Below is the breakdown of a stub from an Upfront teen adviser in Indiana who works at a fast-food joint (we altered personal details). With many teen jobs, the government may be sending you money during tax season, not the other way around. If you earned less than $4,550 In 2001, you're likely entitled to a refund of all the federal income tax withheld from your paychecks last year. Fill out the 1040EZ form (while reading all the fine print), mall it before the April 15 deadline, then wait for your refund check. --Elizabeth Mayer


QUIZ 4 Use with HISTORY, pages 28-30. Multiple Choice.

1. For much of its history, the federal government raised income from tariffs on imports and (a) the sale of land (b) a sales tax on consumer goods (c) the sale of U.S. manufactured goods to other countries (d) the sale of minerals to other, countries.

2. The first income tax helped finance the (a) Revolutionary War (b) War of 1812 (c) Civil War (d) French and Indian War.

3. During the Industrial Revolution, wealth shifted to businessmen and professionals, away from (a) farmers (b) government employees (c) the clergy (d) commercial fishermen.

4. In 1913, the federal government's power to tax personal income was added to the (a) President's powers (b) Treasury Department's powers (c) Commerce Department's powers (d) Constitution.

5. As U.S. involvement in World War II became more certain, Congress dramatically increased the number of people paying income tax by (a) increasing the numbers of immigrants (b) raising incomes by mandating higher wages (c) requiring lower-income people to pay the tax (d) dropping the exemption from taxes formerly granted to people in certain critical professions.


1. (b) sales tax on consumer goods. 2. (c) the Civil War. 3. (a) farmers. 4. (d) Constitution. 5. (c) requiring lower-income people to pay the tax.
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Author:McCollum, Sean
Publication:New York Times Upfront
Geographic Code:1USA
Date:Apr 8, 2002
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