Why is Tax Day on April 15? Could it be because that gives us nearly seven months to forget about taxes when we vote in November?
Here’s an idea: Let’s move Tax Day from April 15 to the first Monday in November. That’s right before election day, so taxes will be fresh on our minds when we vote on whether to reelect those who imposed those taxes on us. That might make legislators think twice about whether to support tax increases, knowing they will face the voters right after Tax Day.
But how did the federal income tax come into being in the first place?
Although income tax was foreign to the Constitution and its framers, in 1861 a temporary income tax was levied to finance the War Between the States. When it was renewed in 1893, the Supreme Court ruled it unconstitutional in Pollock v. Farmers Loan & Trust Co. (1895). An amendment to authorize an income tax was then proposed, advancing under the illusion that only the rich would ever have to pay the tax. With that understanding, three-fourths of the state legislatures ratified it, making it the 16th Amendment on Feb. 25, 1913.
A copy of the first income tax form.
The first Form 1040 was prepared shortly thereafter and was indeed moderate. The first $4,000 of income was exempt from taxation – not much, you say, but $4,000 in 1913 dollars was the equivalent of about $125,000 today. In other words, people who earned less than $125,000 in 2024 dollars did not even have to file a return! Out of a population of 97 million in 1913, only 358,000 had to file an income tax return.
If you earned more than $4,000 ($125,000), you paid a 1% tax on your income above that level. Really high-income people had to pay a “super-tax” that started at an additional 1% for those earning $20,000 ($645,000), up to a maximum of 6% for those earning $500,000 ($16 million).
Moderate indeed. But by enacting the 16th Amendment, we accepted the principle that government has a right to tax our incomes. And if the government can tax our incomes at 1%, it can tax our incomes at 10%, 50%, or 90%.
Public demand for government services has led to a larger bureaucracy at the federal, state and local levels, an ever-increasing number of complex laws and regulations governing our lives, and a diminution of personal freedom. As we look to the government for cradle-to-grave benefits, we allow the government to make decisions for us that we can and should make for ourselves.
So, the cute little monkey grew into a gorilla. The federal bureaucracy consisted of about 3,000 federal civilian employees in 1800 and about 95,000 in 1881, but by 1925, it had grown to nearly half a million, and it is close to 2.8 million today — not counting military personnel, independent contractors, and state and local employees.
But gorillas need to eat. And the mechanism that fuels the federal bureaucracy is the federal income tax.
Besides enabling our addiction to Big Government, the income tax has harmed us in other ways. U.S. Rep. S.E. Payne of New York initially supported the income tax amendment but changed his mind, telling Congress it would make America “a nation of liars,” because it would be “a tax upon the income of honest men and an exemption to a greater or lesser extent, of the income of rascals.” Consider how many people who would never even consider stealing from a neighbor or even from a grocery store, think nothing of not disclosing income when they prepare their tax returns.
And T. Coleman Andrews, who served as Commissioner of the IRS in the early 1950s, resigned because he considered the federal income tax an invasion of the people’s rights under the Fourth Amendment to be protected from “unreasonable searches and seizures,” because it requires us to disclose details of our personal finances that were previously thought to be beyond the reach of government. He added:
The income tax is fulfilling the Marxist prophecy that the surest way to destroy a capitalist society is by steeply graduated taxes on income and heavy levies upon the estates of people when they die.
… People cannot pull themselves up by the bootstraps anymore because the tax collector gets the boots and the straps as well.
…
I am convinced that the present system is leading us right back to the very tyranny from which those, who established this land of freedom, risked their lives, their fortunes and their sacred honor to forever free themselves.
Some years ago, Florida businessman Dallas Hostetler suggested the idea of Tax Freedom Day, the day the average citizen has worked long enough to pay his taxes (federal, state and local) and may begin enjoying the fruits of his own labor.
As recently as 1910, before the federal income tax, Tax Freedom Day would have been around Jan. 19, because the government consumed only about 5% of our income, mostly at the state and local level. By 1920, Tax Freedom Day had moved to Feb. 13, partially because World War I increased our tax burden to 12%. Because of Franklin Roosevelt’s New Deal programs of the 1930s, the tax burden increased to 17.9% by 1940 and Tax Freedom Day became March 7. The growth of the welfare state increased our tax burden to 30.4% by 1980, making Tax Freedom Day recede to April 21, and May 1 by 2000 as Bill Clinton, after declaring, “The era of Big Government is over,” brought Big Government to its peak. The Bush and Trump administrations reduced it slightly, and last year Tax Freedom Day was April 17.
Hostetler believed that, by tracing the movement of Tax Freedom Day to dates later and later on the calendar, we could observe the extent to which Big Government has taken over our lives.
You’ll know you’ve lost your freedom when Tax Freedom Day coincides with New Year’s Eve.
Colonel Eidsmoe serves as Professor of Constitutional Law for the Oak Brook College of Law & Government Policy (obcl.edu), as Senior Counsel for the Foundation for Moral Law (morallaw.org), and as Pastor of Woodland Presbyterian Church of Notasulga (woodlandpca.org). He may be contacted for speaking engagements at [email protected].
The views and opinions expressed here are those of the author and do not necessarily reflect the policy or position of 1819 News. To comment, please send an email with your name and contact information to [email protected].
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