I said that the income tax was supposedly to pay for WWI. That is how it was sold to the American public and it was only to last for 5 years. ITS FACTUAL INFORMATION!
The income tax amendment went to the states for ratification in 1909. Remind me, when did we get involved in World War One?
The Fascinating Truth Versus The Comforting Myth
“The great enemy of the truth is very often not the lie— deliberate, contrived and dishonest— but the myth, persistent, persuasive and unrealistic. Belief in myths allows the comfort of opinion without the discomfort of thought.” -John F. Kennedy
“All governments are run by liars and nothing they say should be believed.” -I. F. Stone
MY FRIEND, ALL YOUR LIFE YOU'VE BEEN TOLD THAT THE 16TH AMENDMENT was a transformational event in the history of the United States Constitution by which an unapportioned direct federal tax on “all that comes in” was authorized. You've been told that the amendment reversed the preceding 137-year-old Constitutional tax structure prohibiting such taxes— under which the American people had grown to be the freest, most prosperous, and most optimistic people in the history of the world— in favor of a radically-different structure under which the scandal-ridden and deeply-distrusted denizens of Washington, DC were granted carte blanche to reach directly into every wallet, be it that of a Wall Street tycoon or that of the average working stiff.
Explanations as to why the rich and happy Americans of the early 20th Century would do such a thing to themselves have always been vague— they typically amount to something about a populist or progressive impulse that swept the country in favor of sticking it to the 'Robber Barons'. Missing is any reason why such an impulse would embrace a universal tax reaching not just the robber barons, but their alleged victims in the working class, as well (along with every little shopkeeper, every mid-level success-story working out the American dream, and everyone else, too).
Also missing from these stories is any explanation of why the several states would ratify such a tax, under which they would inevitably lose power and significance in favor of their federal competitor. Further, these stories leave out the fact that there already WAS an income tax on the books and still in force at the time of the 16th Amendment, which had been successfully deployed over the preceding 52 years without Constitutional problem, save for a single instance in which the US Supreme Court had taken issue with its application to merely two single varieties of realized income.
These stories don’t mention that, in fact, huge portions of our modern body of income tax law pre-date the 16th Amendment, even though this is plainly stated in the preamble to the 1939 Internal Revenue Code, and even though Congress publishes a comprehensive derivation table explicitly identifying the pre-16th-origins of these still-current statutes. (See a little video presentation on this subject here.)
The fact is, an awful lot is left out of these stories purporting to explain the seemingly inexplicable decision of the prosperous American people of the early 20th Century to chuck a system that had served them so well for so long— because they're just stories. They're fiction, so they don't have to make sense. Those telling these stories want you to believe otherwise for reasons of their own, but the truth is, the 16th Amendment did nothing these story-tellers want you to imagine it did. Instead, the amendment merely overruled a Supreme Court decision that had briefly interrupted the application of the already-long-standing tax (the twice-heard case of Pollock v. Farmer's Loan & Trust, 157 U.S. 429, and 158 U.S. 601, (both 1895)), while making no changes to its pre-amendment nature.
The Income Tax Was Established As An Excise On Privilege
From its inception the 'income tax' has been an excise that applies only to gains from the profitable exercise of federal privileges (and therefore needn't be apportioned), as the Pollock court itself noted (here in Justice Field's separate concurring opinion):
“...in Springer v. U. S., 102 U.S. 586 , it was held that a tax upon gains, profits, and income was an excise or duty, and not a direct tax, within the meaning of the constitution, and that its imposition was not, therefore, unconstitutional.” .... (cont. at link)
During the Civil war, WWI & WWII many private businesses set aside their private manufacturing to make items for the government for the wars. In essence, they became, for a time, corporations of the US government. after the wars, the vast majority returned to private business as usual so why didn't revenues collected after WWII level off as they had after the Civil war & the years just prior to FDR's 'New Deal'?
“The great enemy of the truth is very often not the lie— deliberate, contrived and dishonest— but the myth, persistent, persuasive and unrealistic. Belief in myths allows the comfort of opinion without the discomfort of thought.” -John F. Kennedy