Headline 1913

"And so it begins."
--Charles Grimes (High Crimes)

While chewing thru the Ken Burns miniseries Prohibition, I was browsing the photo gallery on the PBS site and found an old newpaper excerpt of interest (click the Atlanta Constitution image here). It is a clipping from the 4 Feb 1913 Atlanta Constitution discussing the Sixteenth Amendment, which had recently been ratified by the requisite 3/4 of the states.

As previously noted, Ken Burns makes the case that the passage of the Sixteenth Amendment (income tax law) was necessary in order to make way for what became the Eighteenth Amendment (prohibition law) six years later.

I found several passages from the article informative/amusing. Here are a few:

"...it is believed [that the income tax law] will exempt all incomes below $4,000 or $5,000, and will provide a tax of 1 percent upon the majority of personal incomes that do not run to an excessive figure."

A dollar in 1913 is worth about 3 cents today, meaning that $5,000 earned in 1913 equals an annual income of about $170,000 today. This passage helps explain how the income tax bill was able to pass a supermajority of states. Simply, people did not believe that they would be subject to the take. Only 'the rich' would be soaked (vuja de).

"One feature, which it is believed will be included in the law, will be provision for 'collecting at the source' of income. This feature, now in operation in England, would require firms to certify the amounts they pay in salaries or fees or pay the tax direct to the government. It is believed that this would remove much complaint that might be made if the government had to investigate every citizen's income and would prevent evasion of the law."

We now know that any promotion of the Sixteenth Amendment under the banner that it would not require government intrusiveness into individual matters of income was a complete farce.

"One of the important results of the income tax," said Representative Hull [that would be Cordell Hull, Democrat TN and future FDR crony], "will be the curbing of unnecessary federal expenditures. When a great part of the government's income is derived by a direct tax upon the citizens of the nation, they will scrutinize more carefully the appropriations made by congress."

If people truly believed that rationale, then perhaps we deserved what we subsequently got.

Hull continued, "Thus the law will enable congress to equalize tax burdens, requiring every citizen to contribute to the government in proportion to his ability to pay...This is the fairest of all taxes, and the cheapest and easiest of collection. Those who shirk their taxes say it is inquisitorial, but no one can deny that a modernized income tax is less inquisitorial than any of our existing taxes, federal, state, or local. No tax is desirable, but it is always best for the people to know something as to the amount of taxes that they pay. They then keep a close eye on the expenditure of moneys."

Do you suppose that Jefferson, Madison, et al knew that their founding framework was finished then and there?