This 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.
