April 15 is usually marked each year as the traditional day people need to file their taxes, so it’s not exactly celebrated as a holiday. But how did April 15 become the big day--and how did we get the IRS in the first place?
But before you panic, in the year 2018, the official federal tax day is April 17. Why? The federal tax deadline can't fall on a weekend. Emancipation Day, which celebrates President Lincoln's signing of the Emancipation Act, is a holiday in Washington, D.C. Since it is celebrated on April 16, the holiday is pushing the tax deadline to Tuesday, April 17.
Question 1: How did the Internal Revenue Service come about?
The IRS has its roots in the Civil War, when a revenue bureau was set up to collect taxes levied to support the war effort in the North. That tax expired in 1872, but the Commissioner of Internal Revenue and its successor have remained in business since.
Question 2: Was there really a national income tax before the one we have now?
Aside from the Civil War tax on the Union states, Congress passed a national income tax in 1894, which was ruled unconstitutional the following year by the U.S. Supreme Court in Pollock v. Farmers’ Loan & Trust Company. The court said it was a direct tax not apportioned according to the population of each state, in violation of Article I, Section 9, of the Constitution.
Question 3: If the Supreme Court said the income tax was unconstitutional, why do we have it now?
Quite simply, enough states changed the Constitution to allow it. After the Pollock decision, two forces joined together to get Congress and at least 36 states to make the income tax legal via the 16th Amendment. Populists thought more people, especially those with higher incomes, should pay taxes. People who supported Prohibition realized the income tax was needed to replace lost taxes on alcohol sales.
Question 4: Which state can we “blame” for passing the 16th Amendment?
Delaware was the 36th state to ratify the 16th Amendment in 1913. But it would be harsh to blame Delaware, since six other states ratified the amendment after it did. And some people believe the income tax is a good thing, and maybe they would honor Delaware!
Question 5: So why is April 15 usually the big Tax Day?
Tax Day hasn’t always been on April 15. The first Tax Day was on March 1, which was a little over a year after the 16th Amendment was ratified. Just before Prohibition started, Tax Day was moved to the Ides of March, aka March 15. In 1955, the deadline was pushed back to April 15, so the IRS could spread out the work involved with processing all the forms. The date of Tax Day changes if it is on a weekend or conflicts with a holiday in the District of Columbia.
Question 6: How long was the first tax form?
It was four pages long, including instructions. Check out what the first 1040 form ever looked like here (PDF). At the time, the average annual income was $800.
Question 7: Is it really that hard to do your own taxes?
It depends on your skill level, but the income tax seems to have befuddled Albert Einstein. According to a website called The Quote Investigator, there may be some truth to a quote allegedly uttered by Einstein: “The hardest thing in the world to understand is income taxes.” The site tracked down the saying to Einstein’s personal accountant.
Question 8: Who has the biggest income tax bill?
ExxonMobil pays the highest, at about $30 billion a year in corporate income tax, followed by Chevron and Apple, as of 2014.
Question 9: What was the highest tax rate ever?
During World War II, the highest tax bracket was taxed at 91 percent and the lowest tax bracket was 23 percent.
Question 10: Who exactly is the “taxman”?
The current “taxman” is John Koskinen, the IRS Commissioner. As for the man that inspired the Beatles song written by George Harrison, that would be then-Prime Minister Harold Wilson and his government's 95-percent tax bracket that affected the Beatles.
Scott Bomboy is the editor in chief of the National Constitution Center.