Populism and the Birth of the IRS

So the other night, some of us men were discussing the power of the IRS and how the government uses money as a tool to control the people, or the fear of losing money as a means of controlling the people.  We complained about it, wondered why it wasn’t the other way around, complained about it some more, but ultimately we did not hammer out a plan to save the country that night.  We came close.  But the answer always seems to evade us.  Consequently though, there was a really good question asked:  When was the IRS created?  And none of us were really sure.  So old Franko (my eldest son) did some investigation tonight.  Here’s what he found on wiki:

1. There was little to no income tax pre-1900.  During the Civil War, in 1862, the government imposed emergency temporary income taxes to raise money for the war effort.  These expired in 1872.  The Income Tax of 1894 was ruled unconstitutional by the Supreme Court
2. “In 1906, with the election of President Theodore Roosevelt, and later his successor William Howard Taft, the United States saw a populist movement for tax reform. This movement culminated during then candidate Woodrow Wilson’s election of 1912 and in February 1913, the ratification of the Sixteenth Amendment to the United States Constitution:”  This, of course, granted to Congress the power to impose an income tax on the people.  This populist movement did not just advocate for tax reform, but they were notorious for protectionism and trade tariffs, the likes of which Trump, Sanders, and Clinton are all three now promoting.  The protectionism and tariffs of this populist movement eventually led to the Fordney-McCumber and Smoot-Hawley tariffs, which many believe were responsible for plunging us much deeper and longer into the Great Depression.
3. So in 1913 the IRS gave us our first 1040 form.  And incidentally, here’s the kicker (emphasis added): “The IRS’s workload jumped by TEN-FOLD, triggering a MASSIVE restructuring. The IRS DOUBLED its staff, but was still processing 1917 returns in 1919.”

Interestingly, listening to LevinTV tonight, Mark was comparing Reagan’s legacy of free-market, free-trade capitalism to Trump’s and Sander’s tariffs and protectionism.  He had this to say about where we’re heading if we don’t follow Reagan’s model:

“There’s another issue.  That’s the government.  When we have more free-market capitalism, we need less government.  Don’t we?  In fact, power moves from the central government to the individual.  Power moves from the public sector to the private sector.  It’s a good thing.  So it has consequences in terms of the civil society.  So apart from economics, which is not to be dismissed in any respect, this goes to the issue of the civil society in government.  How much government do we want?  I want you to think about this for a second.  Regardless of who’s elected, they keep talking about protectionism and tariffs.  What kind of bureaucracy would we have to create in order to control so many prices, in order to issue so many taxes?  The auditors that would have to be hired…  The investigators that would have to be hired…  THE STRENGH OF THE INTERNAL REVENUE SERVICE WOULD HAVE TO EXPAND.  The central government become more increasingly powerful…  You think I’m joking?

No Mark.  I don’t think you’re joking. I think you’re absolutely right.  While I was listening to his program, old Franko was reading all this stuff about the history of populism and the IRS.  Later on that night we shared with each other what we had learned and the information beautifully intersected on a point of enlightenment.  So what Levin is warning about has most certainly already happened in the past.  I think it’s a shame that history and common sense are not on the side of Trumpmania.