The Roots of the Income Tax

APRIL 8 is the hundredth anniversary of the Supreme Court’s decision striking down the income tax as an unconstitutional direct tax not apportioned among the states. Abraham Lincoln’s only remaining appointee on the Court, Justice Stephen J. Field, a Democrat and California frontiersman, condemned the income tax as class legislation. Comparing it to a 1691 English statute that taxed Protestants, Catholics, and Jews at different rates, Field correctly predicted the direction of his party’s class-war politics: “The present assault upon capital is but the beginning. It will be but the stepping- stone to others, larger and more sweeping, till our political contests will become a war of the poor against the rich; a war constantly growing in intensity and bitterness.”

In the beginning the income tax was explicitly directed at the rich, and even today any across-the-board reduction in marginal income-tax rates is denounced by liberals as “trickle-down” economics. But the truth is that the income tax ceased to be an elite tax during World War II, when the need for revenues caused the rich man’s tax to be applied to 64 per cent of the population. Since then, middle-class Americans have found themselves taxed at rates once thought excessive even for millionaires.

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About the Author

Paul Craig Roberts

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About the Author

Lawrence M. Stratton Jr.

APRIL 8 is the hundredth anniversary of the Supreme Court’s decision striking down the income tax as an unconstitutional direct tax not apportioned among the states. Abraham Lincoln’s only remaining appointee on the Court, Justice Stephen J. Field, a Democrat and California frontiersman, condemned the income tax as class legislation. Comparing it to a 1691 English statute that taxed Protestants, Catholics, and Jews at different rates, Field correctly predicted the direction of his party’s class-war politics: “The present assault upon capital is but the beginning. It will be but the stepping- stone to others, larger and more sweeping, till our political contests will become a war of the poor against the rich; a war constantly growing in intensity and bitterness.”

In the beginning the income tax was explicitly directed at the rich, and even today any across-the-board reduction in marginal income-tax rates is denounced by liberals as “trickle-down” economics. But the truth is that the income tax ceased to be an elite tax during World War II, when the need for revenues caused the rich man’s tax to be applied to 64 per cent of the population. Since then, middle-class Americans have found themselves taxed at rates once thought excessive even for millionaires.