From Abe Lincoln To Donald Duck: History Of The Income Tax | WAMU 88.5 - American University Radio
Filed Under:

From Abe Lincoln To Donald Duck: History Of The Income Tax

Play associated audio

The story of how the U.S. wound up with the income tax is the story of two wars, a Supreme Court justice on his death bed, and Donald Duck.

It's also the story of how the government overcame three obstacles.

Obstacle No. 1: Logistics

How do you make sure people pay?

Before the Civil War, the government received most of it revenue through tariffs — taxing goods as they came into the ports. This had its limits, though.

"Tariff duties are a great way to raise money as long as [you're] not fighting a war," says Joe Thorndike, co-author of the book War and Taxes.

In the 19th century, war meant blockaded ports, sunk ships — and almost no revenue from tariffs.

So during the Civil War, Congress decided it had to try an income tax. It devised a really clever plan to get people to pay. It made the tax returns public.

"Your neighbor would see you driving around on a brand new plow and he'd say, 'Wait a minute,' " Thorndike says. " 'I'm going to see how much he reported on his income tax.' "

Even the president's tax returns were public. Here is a tax assessor's list from 1864. Note the entry for "Lincoln Abraham" right there below "Linney Edward."

President Lincoln paid $1,296 in taxes. The list also includes a retail liquor dealer and an eating house owner.

Obstacle No. 2: The Constitution

In the 19th century, the income tax fell almost exclusively on the rich — who, as it turns out, had some pretty good lawyers.

They argued that a "direct tax" had to be divvied up among the states according to their populations. The income tax didn't work that way.

In 1895, the case went all the way to the Supreme Court. One justice was on his death bed, and the remaining eight split evenly. The dying justice came back, and the court re-heard the case.

By a 5-4 vote, the court found the income tax unconstitutional.

It wasn't until 1913, when Congress and the states amended the Constitution to allow for the income tax, that the tax became legal again.

Obsacle No. 3: The Love

Until World War II, the income tax was levied only on the rich. But wartime spending meant the government needed money, and ordinary folks are now asked to pay.

"There was a lot of concern that Americans just wouldn't do it," Thorndike says. "Or that they wouldn't understand that they were supposed to ... or even just how to do it."

The government needed to get the word out. It needed a spokesperson. Someone credible, and easy to understand.

The government needed Donald Duck.

The movie at the top of this post is from 1943. In it, Donald Duck marches around his house, listening to the radio and filling out his tax form. Occupation: actor. Dependents: three (Huey, Dewey and Louie).

This wartime patriotic motivation campaign worked. Maybe we didn't love the income tax. But we paid it.

Copyright 2012 National Public Radio. To see more, visit http://www.npr.org/.

NPR

Tracking The World's Famous Most Unread Books

NPR's Tamara Keith speaks to Jordan Ellenberg about his part-serious, part-playful Hawking Index, which is an e-book-era mathematical measurement of how far readers get into books before giving up.
NPR

What If The World Cup Were Awarded For Saving Trees And Drinking Soda?

We thought you'd get a kick out of seeing how the four teams in the final World Cup matches stack up in global health and development.
NPR

What Could $100 Million Buy You — Besides Campaign Ads In Kentucky?

Spending on the Kentucky Senate race might reach $100 million. So what else could that get you in the Bluegrass State? NPR's Tamara Keith finds out when she calls up some local business owners.
NPR

Tech Week: Google's World Cup Play, Amazon Sued And Kids Tracked

Also in this week's roundup, a tech company that may not exist, using sensors to keep your plants alive and what the debate over sandwich taxonomy teaches us about innovation.

Leave a Comment

Help keep the conversation civil. Please refer to our Terms of Use and Code of Conduct before posting your comments.