This is not America’s first flat tax rodeo. Not even close.
“There are two instances where we actually enacted a flat income tax,” said Steven Bank, professor of law at UCLA. “One was in 1862 during the Civil War, and the other was in 1894. Neither lasted long.”
The first flat tax was ditched before it was ever enforced; the second was struck down by the Supreme Court. The U.S. debated a flat tax again in 1913 when the income tax was created.
“The progressive Republican from Idaho, William Borah, says not only should we have graduated rates, but steeply graduated rates. We need to redistribute income,” Bank said. “Henry Cabot Lodge, a Republican from Massachusetts, argued that we should not have graduated rates — it’s confiscation from the rich, it’s an abomination.”
Bank said in most of these debates, the view that prevailed didn’t look at the flat tax as just a flat tax.
“They were thinking about what is the overall burden” for taxpayers. Tariffs and excise taxes affected the poor and the rich differently. Even the draft was part of the debate, as it was argued the poor were paying a tax by sending off their sons to war.
Taxing the rich more on income was seen as a way to balance all the other taxes that affected the poor more.
Times were simpler back then. It was easier, said Bank, to conceptualize the total impact of different taxes and burdens. Today, a complete restructuring of the tax system — from payroll to sales to state — that’s a complicated conversation.
One that’s hard to squeeze into a presidential debate.