Income Tax: Why We Have It

by Alan Stang

Tote that barge, lift that bale, and make sure you pay on time. April 15th approaches and my guess is that only a relative handful of Americans knows why we have the income tax. With rare exceptions, they will exclaim that we must have the income tax to "pay the expenses of the government." Of course the truth is exactly the opposite. The income tax has nothing to do with paying the expenses of the government.

First an obvious fact, something you already know. When was the country created? Pick a date. Many would pick July 4th, 1776, when the Continental Congress adopted the nation’s birth certificate, the Declaration of Independence. Many others would pick the date of ratification of the Constitution. Let’s arbitrarily use 1776.

Now, when did we get the income tax? Except for the temporary income tax during Lincoln’s Communist War to Destroy the Union, there was no income tax in this country until 1913, when the U.S. Supreme Court upheld its validity in Brushaber, 240 U.S. 1. Indeed, even then it did not affect more than a handful of our people.

As late as 1942, only 3% of our people paid income tax. Until that date, most people probably had heard of it, but they didn’t pay it and had never seen the form. It didn’t apply to them. Indeed, if you check the records, you will see that in 1941, when the reader may have already been alive, the federal government collected more in alcohol and tobacco taxes than it did in income tax. Remember "moonshine" and the "revenooers?"

The income tax finally did hit the people in a big way only in 1942, and then only because we were of course in the middle of the war Franklin Roosevelt had finally succeeded in tricking us into by arranging Pearl Harbor. Even so, the conspiratorial warmongers could put the tax over only by calling it the "Victory" tax, a "temporary" tax collected by withholding, which would be repealed as soon as we had won the war.

Question: Name for me a year, just one year, between 1776 and 1942, when the nation couldn’t function because we had no income tax. Can’t find one? Okay name a month, just one month, when the nation collapsed, couldn’t pay its bills, because we had no income tax. How about a week?

Indeed, remember that during all that time, we fought many wars. We won them all. Yes, we won World War II with the income tax because it was "temporary," not yet a permanent part of our lives, but mainly because we fought that war on behalf of Stalin. With the income tax we have not outright won a war since, from Korea to Iraq.

Remember, you knew all this. I am simply reminding you of something you already knew. So, if we didn’t have an income tax, yet never collapsed, where did the federal government get the funds to pay for itself? Read more>>>>