The US Tax Code was enacted effective March 1, 1913 and my how it has grown..!  The first Form 1040 was four pages long, including one page of instructions.  For some, even that was too much.  Known as the 16th Amedment, passage of its legislation was not without opposition.  Some of the comments resonate even today.  While opponents couldn’t stop the 16th amendment, they argued long and hard against it. Richard E. Byrd, speaker of the Virginia House of Delegates made a particularly impassioned plea to reject the amendment, offering a potent rhetorical blend of state rights, limited government, and anti-tax convictions. Ratification, he warned, would open a new and dangerous chapter in American government:

“A hand from Washington will be stretched out and placed upon every man’s business; the eye of the Federal inspector will be in every man’s counting house . . . The law will of necessity have inquisitorial features, it will provide penalties, it will create complicated machinery. Under it men will be hailed into courts distant from their homes. Heavy fines imposed by distant and unfamiliar tribunals will constantly menace the tax payer. An army of Federal inspectors, spies and detectives will descend upon the state . . . Who of us who have had knowledge of the doings of the Federal officials in the Internal Revenue service can be blind to what will follow? I do not hesitate to say that the adoption of this amendment will be such a surrender to imperialism that has not been since the Northern states in their blindness forced the fourteenth and fifteenth amendments upon the entire sisterhood of the Commonwealth.”

Opposition from Byrd and like-minded conservatives couldn’t stop the amendment. To the suprise of many, the states ratified the amendment in relatively short order, and in February 1913 it became the Sixteenth Amendment to the Constitution.

Federal taxes were expanded greatly during World War I. In 1921, wealthy industrialist and then Treasury Secretary Andrew Mellon engineered a series of significant income tax cuts under three presidents. Mellon argued that tax cuts would spur growth.  The last such cut in 1928 was followed by the Great Depression in 1929. Taxes were raised again in the latter part of the Depression, and during World War II. Income tax rates were reduced significantly during the Johnson, Nixon, and Reagan Presidencies. Significant tax cuts for corporations and upper income individuals were enacted during the second Bush Presidency.

According to the CCH Standard Federal Tax Reporter, a leading authority on tax matters, starting at just 400 pages in 1913, today the US Tax Code requires 73,954 regular 8-1/2″ x 11″ sheets of paper to report and explain its complexity!

What will the future bring..?  Stay tuned.