100 Years of the Income Tax

The United States of America has now had an income tax for over 100 years.  The official anniversary was on October 4, 2013.  The income tax began in 1913 after the passage of the 16th Amendment to the Constitution.

1913 was an ominous year for liberty.  Not only did it mark the beginning of a permanent federal income tax, it also featured at least two other major things.  Right after the 16th Amendment was passed, another anti-liberty amendment passed.  The 17th Amendment changed the way that U.S. senators were chosen.  It went from a system of senators being chosen by the state legislatures to a system of direct election as we still have today.  Perhaps I will write a future post on why this was such a bad thing for the cause of liberty.  The third major thing in 1913 was the formation of the Federal Reserve.

Just these three things alone guarantees Woodrow Wilson as one of the worst presidents of all time, at least from a libertarian perspective.  And that is really bad considering that most presidents were bad in some way.

There were a few articles on the 100th anniversary of the beginning of the permanent income tax.  Drudge linked to one of them.

I think it would be an interesting poll or survey to find out how many Americans know how old the federal income tax is.  In fact, what percentage of Americans even know that there was once a time when there was no income tax?

I will occasionally mention to people in conversation that there used to be no income tax.  A typical response I get is that it was a much different world 100 years ago.  I usually respond in agreement saying we sure do live in a different world today.  There was actually a time in American history when people were free to keep most of the money that they earned.

Of course we need an income tax or some other massive form of taxation if we expect the federal government to be involved in virtually everything, from empire building, to retirement, to medical care, to just about anything else you can think of.

The difference between now and 100 years ago is that the federal government was very small and almost insignificant in the daily lives of most people.  There were tariffs and excise taxes, but overall amounts were a tiny fraction compared to what we are forced to pay today.  In addition, we get a lot of the government we pay for today.  In 1913, there was nothing in comparison when it came to regulations and overall government involvement.  It's not to say that the federal government did not cause problems and misallocate resources back then.  It's just that it was a small percentage compared to what we have today and it had a minor effect on most people.

I am hopeful that one day Americans will beat back this monstrosity.  There is absolutely no reason that we can't live in a world without income taxes, except for people wanting big government.  If more people can see that they don't need big government and that they could actually keep the money they earn without the world falling apart, then maybe the income tax will one day be a thing of the past.