Income taxes are such a pervasive and everyday part of our financial lives -- and such a central issue in presidential campaigns -- that they seem to have been around forever. They have not. Their debut is relatively recent.
Abraham Lincoln created the Bureau of Internal Revenue, the predecessor of today's Internal Revenue Service, and introduced the first U.S. income taxes in 1862 to pay for the North's Civil War expenses. The Confederacy also imposed income taxes. After all, military wars, especially big ones, have to be paid for; at least, that used to be a fact of life.
Mr. Lincoln's levies fell mainly on the well-to-do. There was an exemption from taxes for the first $600 of income. Once beyond that amount, the maximum rate topped off at five percent. The taxes were temporary, not becoming permanent until the ratification in 1913 of the Sixteenth Amendment to the U.S. Constitution.
In an 1864 address to the 164th Ohio Regiment, Mr. Lincoln said, "I apologize for the inequities in the practical applications of the tax, but if we should wait before collecting a tax to adjust the taxes upon each man in exact proportion with every other, we shall never collect any tax at all."
Another Republican understandably went out of his way not to poke fun at the tax collectors. Richard Milhous Nixon, caught up in the struggle to avoid impeachment and stay in office, informed the nation that "The President, when the IRS is concerned, I assure you, is just another citizen and even more so." TIME magazine waited until the issue that coincided with the tax filing deadline of April 15, 1974, to note Mr. Nixon "offered that wry observation exactly one month ago, when advance warnings had been posted that he might owe half a million dollars in back taxes." He resigned on August 9.
Ronald Wilson Reagan stood out for his ability to make complicated subjects understandable. Mr. Reagan particularly liked to poke fun at the shortcomings of our modern tax system. For instance, he alerted future taxpayers to what awaited them in a talk to students at Northside High School in Atlanta, Georgia, on June 6, 1985
If our current tax structure were a TV show, it would either be Foul-ups, Bleeps and Blunders, or Gimme a Break. If it were a record album, it would be Gimme Shelter. If it were a movie, it would be Revenge of the Nerds or maybe Take the Money and Run. And if the IRS ever wants a theme song, maybe they'll get Sting to do "Every breath you take, every move you make, I'll be watching you."
Mr. Reagan stayed on message at a joint session of the Canadian Parliament in Ottawa on March 11, 1981: "The American taxing structure, the purpose of which was to serve the people, began instead to serve the insatiable appetite of government. If you will forgive me, you know someone has once likened government to a baby. It is an alimentary canal with an appetite at one end and no sense of responsibility at the other."
Mr. Reagan's vice president, George Herbert Walker Bush, had sewn up the nomination for president when delegates at the Republican convention in 1988 cheered his famous pledge of "Read my lips -- no new taxes!" However, as president, the elder George Bush had to deal with a Democratic Congress and to be more conciliatory, unlike his son. So despite his vow and because he knew it was helpful for the economy, President Bush crafted a deal with Congressional Democrats to raise new taxes in 1990, a decision that contributed to his re-election defeat in 1992 by William Jefferson Clinton.
President Clinton easily won again in 1996, notwithstanding tax increases in 1993, becoming the first Democrat to be re-elected since Franklin Delano Roosevelt. As Mr. Clinton recalled, "There's a lot of evidence you can sell people on tax increases if they think it's an investment." Of course, tremendous growth in the 1990's also made it easier to sell increases.
Mr. Clinton's other 1992 opponent was H. Ross Perot, a super-wealthy, third-party candidate making his first run for the office. Like TIME magazine with its Nixon revelation, Mr. Perot waited until the filing deadline to reveal that "I'm delighted to pay big taxes. Big taxes mean big income."
During Mr. Clinton's first term, a key element of his legislative efforts was to attack the welfare system and promise to end welfare as we know it. In 1996, Republican candidate and Senate Majority Leader Robert Dole of Kansas invoked the same oratorical flourish when he declared that "I will eliminate the IRS as we know it." Mr. Dole attempted to tap into anti-IRS sentiment abroad in the land. Among other things, he promised a simpler system "that will allow Americans to file their tax returns without the help of a lawyer or accountant, or both," yet another of the countless proposals for simplification that never get anywhere.
Mr. Clinton was the first Democrat in the White House since James Earl Carter, a president who characterized "the federal tax system" as "a disgrace to the human race," an assessment decidedly less upbeat than those of other Democratic chief executives.
John Fitzgerald Kennedy, in an address to Congress on April 20, 1961, declared:
One of the major characteristics of our tax system, and one in which we can take a great deal of pride, is that it operates primarily through individual self-assessment. The integrity of such a system depends upon the continued willingness of the people honestly and accurately to discharge this annual price of citizenship. To the extent that some people are dishonest or careless in their dealings with the government, the majority is forced to carry a heavier tax burden.
While President Roosevelt was campaigning for a second term, he told a gathering in Worcester, Mass., on Oct. 31, 1936, that "One sure way to determine the social conscience of a Government is to examine the way taxes are collected and how they are spent. And one sure way to determine the social conscience of an individual is to get his tax-reaction. Taxes, after all, are the dues that we pay for the privileges of membership in an organized society."
William Jennings Bryan campaigned unsuccessfully three times as the Democratic presidential candidate. During his famous acceptance speech at the party's National Convention in Chicago, on July 8, 1896, he declared that "The income tax is just. It simply intends to put the burdens of government justly upon the backs of the people. I am in favor of an income tax. When I find a man who is not willing to bear his share of the burdens of the government which protects him, I find a man who is unworthy to enjoy the blessings of a government like ours."
Long before the introduction of income taxes, Andrew Jackson took a resigned view of all taxes. "The wisdom of man never yet contrived a system of taxation that operates with perfect equality."
Julian Block is an attorney and author based in Larchmont, N.Y. He has been cited as: "a leading tax professional" (New York Times); "an accomplished writer on taxes" (Wall Street Journal); and "an authority on tax planning" (Financial Planning Magazine). Information about his books is at julianblocktaxexpert.com.