The last time we imposed a tax regime of this scale was when the Progressives convinced us we needed an income tax. Four years after the 16th Amendment, Congress raised the top rate from 7 percent to 67 percent, partially to pay for cost overruns in administering the tax itself. Would you have us believe that Congress will not use this new energy tax system to dramatically increase taxes and redistribute wealth over time as Congress does frequently with the income tax?
First, as Kevin Drum has pointed out, the rise in tax rates between 1913 and 1917 had precious little to do with “cost overruns in administering the tax itself.”
- The legislation that raised the top rate to 67% was called the “War Revenue Act.” Anyone want to take a guess about just how big a factor “cost overruns in administering the tax itself” was to this measure?
Worse, though, is Everley’s attempt to blame “Progressives” for the advent and expansion of the income tax. Sure, the income tax was a product of the Progressive movement. But given the unmentioned “war to end all wars,” can we really link the tax’s rapid maturation to those same reformers?
After all, both the House of Representatives and the Senate passed the final version of the 1917 war revenue act without a dissenting voice. None. Not one.
That’s not to say there wasn’t opposition to some of the law’s provisions. But there was no serious debate over the necessity of expanding the income tax dramatically. And when push came to shove, Democrats and Republicans lined up together to support the law.
The transformation of the income tax, in other words, was a bipartisan decision, not a “Progressive” imposition. Like it or not, America came by the tax honestly, in all it's redistributive glory.