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The Federal Income Tax -- Then (1913) and Now (2017)

With the 2017 tax filing season over for most Americans, Growls readers might find of interest a short 104-year history of the income tax that Americans for Tax Reform (ATR) posted last week.

ATR makes the following points:

  • In 1913 the top marginal income tax bracket was 7% -- today it is 39.6%.
  • In 1913 the marginal income tax bracket range was 1% - 7%. Today the range is 10% - 39.6%.
  • In 1913 there were 400 pages in the tax code. Today there are 74,608 pages in the code.
  • In 1913 the family standard deduction was $98,425.45 in today’s dollars. The family standard deduction now is just $12,600.
  • When the income tax started in 1913, only 358,000 Americans had to file a 1040. Today 148,606,578 Americans file 1040s.

As Grover Norquist, president of Americans for Tax Reform, said, "The American income  tax is perhaps the most dramatic example of how government grows at the expense of liberty.

The following chart from ATR shows the perniciousness of the income tax:

 

Burt Fulson, professor of history at Hillsdale College has an essay posted at the Foundation for Economic Education (FEE) website. It is entitled, "The Progressive Income Tax in U.S. History," and includes:

"During the 1800s economic thinking in the United States usually conformed to the founders’ guiding principles of uniformity and equal protection. One exception was during the Civil War, when a progressive income tax was first enacted. Interestingly, the tax had a maximum rate of 10 percent, and it was repealed in 1872. As Representative Justin Morrill of Vermont observed, “in this country we neither create nor tolerate any distinction of rank, race, or color, and should not tolerate anything else than entire equality in our taxes.”

"When Congress passed another income tax in 1894—one that only hit the top 2 percent of wealth holders—the Supreme Court declared it unconstitutional. Stephen Field, a veteran of 30 years on the Court, was outraged that Congress would pass a bill to tax a small voting bloc and exempt the larger group of voters. At age 77, Field not only repudiated Congress’s actions, he also penned a prophecy. A small progressive tax, he predicted, “will be but the stepping stone to others, larger and more sweeping, till our political contests will become a war of the poor against the rich.”

"In 1913, almost 20 years later, the ideas of uniform taxation and equal protection of the law for all citizens were overturned when a constitutional amendment permitting a progressive income tax was ratified. Congress first set the top rate at a mere 7 percent—and married couples were only taxed on income over $4,000 (equivalent to $80,000 today). During the tax debate, William Shelton, a Georgian, supported the income tax “because none of us here have $4,000 incomes, and somebody else will have to pay the tax.” As Madison and Field had feared, the seeds of class warfare were sown in the strategy of different rates for different incomes."

Growls readers are urged to make their views about the federal income tax known to their members of Congress. Contact information is available at the Library of Congress' Congress.gov. Taxpayers living in Virginia's Arlington County can contact:

  • Senator Mark Warner (D) -- write to him or call (202) 224-2023
  • Senator Tim Kaine (D) -- write to him or call (202) 224-4024
  • Representative Don Beyer (D) -- write to him or call (202) 225-4376

Ask for a written response. And tell them ACTA sent you.

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