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View Full Version : On this day, February 9, 1878




hugolp
02-09-2010, 04:11 PM
Wonder what this guy would think about the present situation (notice the ironic messages on the wall of the building, in the link you have a bigger image)

http://www.nytimes.com/learning/general/onthisday/harp/0209.html

On February 9, 1878, Harper's Weekly featured a cartoon about the federal income tax.

Click on the image to open a larger version of the cartoon or read the caption and explanation.

http://elections.harpweek.com/NYT/0201/020978M.jpg

"Peace with a War Measure"
Artist: Thomas Nast
his Harper's Weekly cartoon by Thomas Nast condemns recent proposals for reestablishing a federal income tax as a weighty burden upon the economic prosperity of peacetime.

Throughout the nineteenth century, the federal government derived its revenue primarily from tariffs and excise taxes. The first federal income tax was enacted by Congress in August 1861 in order to help finance the massive cost of the Civil War. It was a three-percent tax on annual incomes over $800, which excluded most wage-earners. After the war, the Congressional Joint Select Committee on Retrenchment (1867-1871), recommended abolishing the federal income tax. After rate reductions in 1867 and 1870, Congress did so in 1872, with strong, bipartisan support.

By the late 1870s, however, politicians and certain business interests in the South, Midwest, and West turned to the income tax as an alternative to high tariffs as a source of revenue for the federal government (over 50%). In December 1877, two income tax bills were introduced in the U.S. House of Representatives. As with the Civil War income tax, the proposed rates were low (one to three percent) and the targeted annual incomes were high for the time (over $1000).

Cartoonist Thomas Nast uses several images and phrases to denounce the proposed income tax. Most obviously, the income tax is a heavy weight around the neck of the feminine symbol of Peace, who is labeled as a "slave." Her name and the cartoon's caption reinforce the idea that an income tax is justifiable only as a temporary measure during wartime (as in the Civil War).

On the right, the ramshackle American ship of state is in port (a long economic depression was just ending), while vultures fly overhead, symbolic of impending doom or death. On the left, the workshop is closed, and blame is placed on such things as excessive legislation and "soft" money (currency not backed by gold). "Tweedization" is a reference to the former boss of Tammany Hall, William Tweed, whose name Nast used as a general term for corruption.

Harper's Weekly editor George William Curtis agreed with Nast that an income tax injured business and industry, thus undercutting the nation's general prosperity, and was probably unconstitutional. The editor's main argument against an income tax, however, was that it was "necessarily inquisitorial. It can be levied effectually only by invasions of private accounts and researches into the details of private business, which are repugnant to the most precious traditions of the English-speaking people." To those who claimed that only the rich would be taxed, Curtis replied that only the honest would pay, while the unscrupulous would find ways to circumvent the law.

The bills of 1878 were defeated, but Congress again enacted a federal income tax in 1894. After the Supreme Court ruled the law unconstitutional, a proposal was subsequently made for a constitutional amendment to allow for a federal income tax. In February 1913, it was ratified as the 16th Amendment, and the Underwood Tariff of 1913 included a provision for a one percent tax on annual incomes over $3000.

Robert C. Kennedy