In the latest installment of her “The Forgotten Book” series, Amity Shlaes focuses on taxes — and presidents:
Since, contrary to rumor, 2023 is not a presidential election year, it might be worthwhile to take a step back to analyze how this all came to pass. All the timelier then is a new book that traces both the code history and the manner in which leading political families attempt to navigate the tax thicket: All the Presidents’ Taxes, by Charles Renwick.
Renwick commences his account with the original enforcer, George Washington. Though we associate Washington with the Revolution — a tax revolt, after all — Washington later personally led 13,000 militiamen in suppressing America’s first domestic Tea Party, the Whiskey Rebellion.
This action by our first chief, according to Renwick, demonstrated “the effectiveness of our representational democracy in creating a tax code.” Moving forward quickly, Renwick soon arrives at the Income Tax of 1913, which he likewise praises as proof that “overall support for income tax and its implementation was incredibly strong.”
Perhaps, however, that was because the top rate on the original Form 1040 amounted to only 7 percent. Or perhaps it was because the new federal levy did not apply to most Americans…
The institutionalization of class war via tax gave reformers enormous power and, with that, the arrogance to impugn the motives of those who challenged it. “Taxes are what we pay for civilized society,” said Supreme Court Justice Oliver Wendell Holmes, a line so conveniently prim that the Internal Revenue Service engraved it on the new headquarters it was constructing at the time. To underscore his point, Holmes even left a large share of his estate — $263,000 — to the federal government in the form of an unrestricted gift, then the largest such gift ever made to the government.
The president at the time, Franklin Roosevelt, praised Holmes’s action as a “noble bequest.” But Congress, naturally, didn’t know what to make of such a virtue-signal. And as author Stephen Budiansky reports, fate punished Holmes for his sanctimony. Confused lawmakers left the cash to waste away for years in a non-interest-bearing account.
It would take a heart of stone not to laugh.