The first Federal income tax was adopted in 1861 to finance the Civil War, but it was allowed to lapse after the war.  In 1913, the Sixteenth Amendment to the Constitution was ratified, permitting the Federal government to levy an income tax without giving all of it to the states. The Federal income tax enacted in 1913 included corporate and individual income taxes.

Federal taxes were expanded greatly during World War I. In 1921, wealthy industrialist and then Treasury Secretary Andrew Mellon engineered a series of significant income tax cuts under three presidents. Mellon argued that tax cuts would spur growth. The last such cut in 1928 was followed by the Great Depression in 1929. Taxes were raised again in the latter part of the Depression, and during World War II. Income tax rates were reduced significantly during the Johnson, Nixon, and Reagan Presidencies. President Clinton raised marginal tax rates on the wealthy in 1993 and eliminated the deficit.  George W. Bush scaled back tax rates across the board, resulting in large and sustained budget deficits.


Chamber of Commerce, Wrong Again

May 19, 2011

Cry Wolf Quotes

Every school child knows you don't raise taxes in a recession unless you want to make it worse.

Editorial, The Wall Street Journal's arguing against Reagan’s TEFRA tax hike.

[There is] no doubt that it [TEFRA] will curb the economic recovery everyone wants.

The U.S. Chamber of Commerce, 1982.

The true purpose of the tax bill is to finance a further expansion of government. For all of the yelling and kicking, Congress still has done nothing serious to curb government spending. Therefore we have a swelling deficit. And because of the deficit, we’re told, taxes must go up.

Editorial, The Wall Street Journal's arguing against Reagan’s TEFRA tax hike.


Backgrounders & Briefs

Estate Tax Policy Brief

By Joseph J. Thorndike

Since at least the 1920s, estate tax opponents had been trotting out the same litany of warnings and complaints about the Estate Tax. 

Taxes Not Seen as Making the Rich Flee New York

Almost everyone agrees that raising taxes on the rich does not induce mass upper-class migration. 


Media Matters holds conservative media and political figures accountable for their rhetoric.

The Center on Budget and Policy Priorities (CBPP) is a think tank focused on tax and fiscal policy. They provide in-depth analysis of state issues.

Citizens for Tax Justice is an organization that represents low and middle income citizens in the tax debates on Capitol Hill.