In defense of the income tax, a history

It took a natural disaster and a financial panic to get income taxes written into the U.S. Constitution. That was 1907. And even those who like public programs are still struggling to defend taxes.

"It began with an earthquake," writes Jill Lepore in this week's New Yorker.

That's not a metaphor. In 1906, an earthquake struck San Francisco, and started a massive fire that nearly burned the city down. As Lepore writes, it was one of the worst natural disasters in American history. Economic panic followed. The New York Stock Exchange almost shut down.  The government desperately needed revenue.

The solution? The income tax. By 1913, Congress ratified the 16th amendment to the Constitution, approving a levy on personal income. At the time, Lepore writes, it wasn't that controversial. But that doesn't mean we've ever liked it.

"Opposition to taxation has been very effectively sold. There hasn't been a very well organized defense of it," says Lepore.

She quotes Oliver Wendell Holmes: "Taxes are what we pay for civilized society."

But, says Lepore, "Nobody has really said that better than Oliver Wendell Holmes -- and that was nearly a century ago."

Even proponents of the New Deal avoided linking taxes to popular social programs.

"Liberal policymakers very deliberately refused to defend what they were doing as a kind of progressive income tax that would be for the good of all. To defend it that way would be to open themselves up to further political attack by these well-organized political forces that opposed income taxes at all. And so they were never defended as the fruit of an income tax," Lepore says.

Lepore offers a possible defense of her own.

"Taxes protect private property and protect the environment. Without taxes business is impossible. You can make a business-based argument to defend progress income taxation. But one way not to do it is to engage in the rhetoric of marketing."

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.
Log in to post13 Comments


How does Lepore come to the conclusion that it was not controversial at the time?

If it wasn't controversial then why was there concern it would not pass in the northeast and why did several states fail to ratify it?

I fail to see how taxes equal civility, when they are being used to pay for drone attacks that kill innocent children overseas.

One of the most nonsensical pieces I've heard recently. Justifying taxes? Come on. The issue in Washington and most states is spending, not taxes. The solution is less government and its inherent waste. And yes, I've been there and seen it for over 30 years at both federal and state levels. Baracko can't produce a budget. Why bother? Just increase taxes and keep spending. No one operates a household, a business or a government that way and survives.

Your guests delusions are based on an invalid basic assumption. We do Not need most of the things that taxes buy (we need a few of them, but we don't need most of them). But then, this is the basis of one of our major political debates; and contrary to what is implied here it Is a valid debate.


With Generous Support From...