The Republican Party and the Income Tax

Ah, the irony of it all.

Heather Cox Richardson reminds us that the Republican Party once championed the federal income tax.  Here is a taste of her post at Bloomsberg:

The government has the right to “demand” 99 percent of a man’s property when the nation needs it.

That was the argument made by a Republican congressman in 1862 to introduce a novel idea: the federal income tax.

The Civil War was then costing the Treasury $2 million a day. To pay for uniforms, guns, food, mules, wagons, bounties and burials, Congress had issued hundreds of millions of dollars of bonds and paper money. But Republicans had a horror of debt and the runaway inflation that paper currency usually caused.

Taxes were the obvious answer. A conservative Republican newspaper declared: “There is not the slightest objection raised in any loyal quarter to as much taxation as may be necessary.”

Until then, taxes in the U.S. had always been apportioned by state according to population, and were generally levied on land holdings. But when it came to the huge sums necessary to fight the Civil War, such direct taxes would ruin farmers.

Instead, Republicans turned to what they called “indirect taxes,” which were essentially sales taxes of 3 percent on all manufactured goods. These, however, wouldn’t be sufficient to raise the needed revenue without making basic necessities prohibitively expensive for most Americans. 

Read the rest here.