Americans love anniversaries and this year marks some pretty remarkable ones, most notably the sesquicentennial of the battle of Gettysburg and the fall of Vicksburg, two events that dealt a crippling blow to the Confederacy in the summer of 1863, and the 50th anniversary of the JFK assassination. But 2013 also marks the centennial of another crucial event, the enactment of the infamous income tax.
Pushed by Liberals for decades in the late 19th and early 20th centuries, the income tax was supposed to be the “great leveling,” a policy that would correct the long-festering problem of wealth inequality. However, there was one problem – the Constitution specifically prohibited the government from taxing the American people directly. Continue reading
A recurring theme throughout this campaign season has been the distribution of the nation’s wealth, stirred by President Obama and the Occupy movement. A new phrase has entered the American political lexicon: the 99 percent versus 1 percent.
Mitt Romney stirred up the political waters recently with remarks about wealth distribution and government dependency.
“There are 47% of the people who will vote for the president no matter what,” he told supporters at a private fundraiser. “All right, there are 47% who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. [They believe] that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what.”
Though what he spoke was truth, the Mainstream Media went wild. At the same time, a 1998 tape was released of then-state senator Obama speaking in favor of re-distributing wealth. Yet the media just yawned. Continue reading
On December 19, 1893, William L. Wilson, Chairman of the House Ways and Means Committee, rolled out a new tariff reform bill, which passed the House on February 1, 1894 by a significant margin, 204 to 140. Tariff duties were modestly cut by 15 percent. However, to make up for any projected loss of revenue, the final House version of the bill included a provision for an income tax. The young Democratic congressman from Nebraska, William Jennings Bryan, introduced the tax amendment and vigorously defended it. “There is no more just tax upon the statute books than the income tax,” he told the House.
Though not a new concept, a tax on incomes had been first enacted in 1862 to help finance the Civil War, and, despite the Constitution’s prohibition against direct taxes, federal courts had left it alone as a war revenue measure. The original act created the Bureau of Internal Revenue, the forerunner to the IRS, to collect the tax. It covered all incomes over $600 a year at two graduated rates. Income above $600 and up to $10,000 was taxed at three percent, while everything over $10,000 at five percent. In 1864 the top rate was increased to ten percent. When applicable, the federal government had actually withheld the tax from people’s income, such as government salaries, dividends and interest from bank stocks and bonds, as well as from railroads and other corporations. By the end of the war, some 15 percent of households were paying the tax. In 1872, the law expired and Republicans were content to leave it dead, as the tariff was continually pouring money into the federal treasury, making additional taxes unnecessary. Continue reading