History of The Income Tax – A Mindset Change Is Needed


During income tax debates, you will likely hear some Liberal politician spouting off about how income tax rates on the rich used to be much higher, and how Americans have “historically low” income tax rates at the moment. When dirty politicians make statements like this, they are counting on the fact that most Americans will not go back and research the history of the income tax.  This article is to give you a little background when you are making your lower tax arguments against your Liberal counterparts.

Most Americans do not realize that the United States of America survived over 80 years before the very first income tax was enacted…and that tax went solely to paying for the civil war.  The income tax was then repealed after the war.

In 1894, a Liberal Congress again tried to tax income as a way to pay its bills…but the Supreme Court ruled that it was unconstitutional.

It was not until 1913 (less than 100 years ago) that the United States enacted the 16th amendment, which made taxes on income constitutional.  Even then, the rules were so generous that less than 1% of people actually paid income tax.

So, the next time a Liberal tries to use the argument that income taxes used to be much higher, remind them that before the New Deal, Social Security, Medicare, and Welfare programs that the Democrats love, America survived over 130 years (more than half of our entire history) without an income tax (except for a few years to pay for the civil war).

The next time an irresponsible politician uses the income taxes are “historically low” argument, make sure you let every know the truth about the history of the income tax.  These income tax levels are HISTORICALLY HIGH!  For more than half of our country’s history, there was no income tax at all!

And perhaps most importantly…

The next time a Liberal argues against balancing the budget, tell them that income taxes are not the way to do it.  Cutting spending is the only responsible way to balance the budget.  Please share this article with your friends!

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About Todd Hagopian (@ToddHagopian)

Todd Hagopian received his BA from Eastern Michigan University with a major in Political Science. After graduation, he worked as a Financial Advisor and a Bank Manager before returning to school. He attended Michigan State University, where he completed an MBA with a double-major in Finance and Marketing. Todd is now a Senior Product Development Manager for a Fortune 500 company. He frequently writes about business issues, social media strategy, and political issues that he finds important. Enjoy the blog!

Posted on September 3, 2012, in Politics and tagged , , , , , , , . Bookmark the permalink. 5 Comments.

  1. Reblogged this on Until The Twilight and commented:
    Lying by omission seems to be a favorite sport among conservatives these days.

    During the time period you mention the Federal government funded itself from tariffs on imported goods which of course is opposed by conservatives today. Lincoln was forced to impose an income tax to pay for the civil war because the south controlled one of the only two ports in America at that time slashing Federal income in half.

    The New Deal became necessary because advancing technology drove most of the population off of family farms into the cities and emerging factories. Resulting in the breakup of extended families, with two or more generations living together, into the nuclear family structure which left the elderly living in poverty.

    Labor laws and unions came about because employers of that time period refused to pay their employee’s enough to lift them out of poverty while amassing vast fortunes. During the 1920’s Republicans refused to regulate wall street and allowed the finance sector to run wild causing the crash of 1929. President Hoover – a republican – slashed spending and set out to balance the Federal budget setting off the “Great Depression” that led to FDR winning the White House and the imposition of the New Deal.

    After ww II President Eisenhower rejected conservative austerity policies, kept taxes high and built the massive interstate system; that helped to set off the economic boom that lasted until the re-imposition of conservative economic policy by the Federal Reserve that caused inflation to rise.

    The election of Reagan and his war on the Federal Government – lowering of the tax rates on the 1% and deregulation of the finance sector {wall street} planted the seeds of the economic meltdown in 2008. Bush I increased taxes and set the stage for Clinton’s budget surpluses while The repeal of the Glass-Steagall act by Clinton and Bush II’s economic policies eventually brought about the exact same conditions that led to the crash of 1929 and the Great Depression with the meltdown of the Economy in 2008.

  2. Hello DaPoet! Thanks for commenting on my blog, I always enjoy a good debate, and it is refreshing to see other people who are still interested in the serious issues.

    All that being said, while my post was filled with facts about the history of the income tax, your response carried several opinions to make your case:

    The Tariffs that you mention are actually a good response, though I was not taking a stance for/against them, so I am not sure what purpose it served in this particular argument. Obviously, the government needs some revenue, and I am not arguing against all taxes, just against the argument that they are now “historically low”…which they are not.

    The New Deal becoming necessary is pure opinion, and a liberal one. I understand the argument that you are making, but that does not make it correct, nor does it resemble a fact.

    Labor laws don’t have a place in the argument I was making, and your argument was again riddle with opinions. Labor unions may have been necessary at the time,though I know that not everyone would agree, and you cited no facts.

    The massive interstate system was not the only thing, nor the major thing, that set off the economic boom…it was the entrepreneurial spirit and business-friendly low-regulatory laws, so that again is not a fact, but a mildly-educated option.

    Making the argument that Reagan’s policies in the 80’s set the stage for the economic meltdown over 20 years later is borderline absurd. Clinton’s surpluses were due to the Republican congress that forced him to balance the budget, so I don’t know how he takes credit for that…

    Anyway, thank you for the response, and for the debate, I always welcome a good discussion on the issues…I just prefer discussions based on fact. Thanks!

  3. Unfortunately Todd conservative economic policies always have and always will lead to bubbles and meltdowns. The sooner you and your fellow conservatives cure yourselves of your economic delusions the sooner we can all work together to put this country back on track.

  4. Thank you again for another fact-filled post DaPoet…I do enjoy debating, but I don’t know how to refute a post that is 100% opinion, so I am going to let this one go…

  1. Pingback: What Does The Federal Government Know About Financial Literacy? « toddhagopian

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