The Great Tax Wars: Lincoln--Teddy Roosevelt--Wilson How the Income Tax Transformed America

by Steven R. Weisman

A major work of history, The Great Tax Wars is the gripping, epic story of six decades of often violent conflict over wealth, power, and fairness that gave America the income tax. It's the story of a tumultuous period of radical change, from Abraham Lincoln and the Civil War through the progressive era under Theodore Roosevelt and ending with Woodrow Wilson and World War I. During these years of upheaval, America was transformed from an agrarian society into a mighty industrial nation, great fortunes were amassed, farmers and workers rebelled, class war was narrowly averted, and America emerged as a global power.
The Great Tax Wars features an extraordinary cast of characters, including the men who built the nation's industries and the politicians and reformers who battled them -- from J. P. Morgan and Andrew Carnegie to Lincoln, T.R., Wilson, William Jennings Bryan, and Eugene Debs. From their ferocious battles emerged a more flexible definition of democracy, economic justice, and free enterprise largely framed by a more progressive tax system. In this groundbreaking book, Weisman shows how the ever controversial income tax transformed America and how today's debates about the tax echo those of the past.

Genres: History, Nonfiction, Economics, American History, Politics, Taxation, Finance

432 pages, Paperback

First published September 3, 2002

Reviews

[Bruce · Rating 3 out of 5]

Nowadays it's hard to see how the federal income tax could ever have been enacted in the first place. This book tells you how. Most readable book on taxes you'll ever read. Enables you to be interested, say, the Grover Cleveland or William McKinley administrations, which previously were too boring to think about.

[Marlee · Rating 5 out of 5]

"But the system that survives intact is a product of sixty years of turmoil, from the Civil War to World War I. That turmoil leaves a legacy that survived and strengthen the nation for the rest if one century and onto the next."

I greatly enjoyed the journey through America that this book brought me on. I think what most saddens me about modern society is that the topics talked about in this book are not known, but we do have people out here thinking that Alexander Hamilton was a president so one step at a time I guess.
I think what most surprised me about this is that the income tax was a product of war MULTIPLE times. They kept taking it away and brining it back when another war started. What seems so common to Americans now, the income tax, was not common to the people during the Civil War times, and wasn't federal law until a little over 100 years ago. How we relayed on tariffs before the Civil War but quickly realized those don't fund wars, and then realized that taxes can also fund more then wars post-WWI.
What also got me about this book was how dated it was. That was funny. Calling Donald Trump a "business man", talking as if 9/11 was yesterday, being like "as we continue to enter the 21st century." It just cracked me up.
Sadden to have to give this book back to my father, I really want it for myself.

[Chris · Rating 4 out of 5]

The Great Tax Wars recounts the multi-decade battle to enact the Federal Income Tax. That sentence may not be an attention-grabber for most people, but I assure you this book is far more fascinating than you think.

There were three attempts to enact an income tax to replace the century-old tariff structure that financed the Federal government (at the benefit of domestic producers and at the expense of consumers and the working poor). First, an income tax was enacted during the Civil War, when Lincoln and Treasury Secretary Chase desperately needed revenue to finance the war (which was otherwise financed mostly by inflationary debt). That tax, intended to be an emergency war measure, was watered down and eventually repealed during the late Reconstruction period.

A second attempt in the 1890s to enact the income tax--this one intended to be permanent--as a means of financing the government in a more progressive fashion than the tariff, ended in ignominy as the Supreme Court struck down the income tax as an unconstitutional "direct tax." (As an aside, that period for the Court has to be one of the more embarrassing and shameful periods in its history: the same timeframe witnessed the truly awful decisions issued in Plessy and Lochner.)

Within two decades, however, the pressures for both a more progressive tax system and the need for revenue led to the third, successful attempt to enact the income tax, first by enactment of the 16th Amendment in 1931 to ensure the tax would not be struck down, followed within the year by enactment of that tax. Soon thereafter, the financing needs of World War I broadened the reach of the income tax, and (thankfully) this tax system has been with us every since.

One aspect that struck me most is how much we keep having the same arguments about progressivity, incentives, and revenues today, one hundred fifty years after first enacting an income tax. Some of the statements issued by congressmen and senators in the 1860s, 1890s, or 1910s could easily be inserted into the mouths of any member of Congress today, on both sides of the issue.

The author, Steven Weisman, does a nice job of giving a flavor of the era--particularly the late nineteenth and early twentieth centuries, a period often skipped over by most people who subconsciously skip from the end of Reconstruction right to World War I and assume nothing happened in between. Major figures of the era, many now obscure--critical and pivotal leaders like Senator Cordell Hull and Treasury Secretary William McAdoo--come alive in the narrative, as do the more well-known personages like Salmon P. Chase, Grover Cleveland, Theodore Roosevelt, and Woodrow Wilson.

Overall, this is good, but not great, narrative history. There is no penetrating analysis or new insight, but it's worth a read for greater background into the tax issues our nation still battles over today.

[Nate · Rating 3 out of 5]

Content is easily at a 4 or 4.5 as you will learn a lot, but the writing is flat and soulless.

Granted, you're not reading a book on income tax history to be entertained, but this reads like a first draft from chapter 2 to the end.

[Ess Atoms]

I learned a lot about the history of the income tax in the United States. The Federal income tax in the closest form to today's tax originated during the Civil War to supply funding for the Union army and cause. Throughout it's history, the tax has been subject to substantial debate and focus in Presidential cabinets. The passage and subsequent modifications to Federal income tax have touched every level of government from the Supreme Court, to Congress and the Senate, and to the Executive Office. Political careers have been made (Wilson-D and funding for US WW1) and taken (H.W. Bush-R "Read my lips..." by pivoting tax sentiment.

[tally wally · Rating 5 out of 5]

One of my favorite books as it reads like a story instead of a textbook, while explaining how we went from tariffs to income taxes. Never thought a book on taxes could be so interesting.

[Michael · Rating 5 out of 5]

I suppose the most important question is, did I find this book as interesting as I might expect a book about our Federal Tax history to be? The answer, yes. This is a “good read” if – as April 15th rolls around yet again – you find yourself in the typical tax malaise and question just what the Hell went wrong. This doesn’t necessarily answer that question but Weisman does a terrific job of covering the trials and travails that encompass the early history (Lincoln through Wilson administrations) of how the income tax was introduced, repealed, and reintroduced – the latter time for sure. As I finished the last chapter I did feel that I may have to check out yet another book covering the subsequent, so-called Welfare State years as this would explain how the original, very controversial, graduated rate starting at 1% and exempting the vast majority of the nation developed into the tragedy we now face paycheck-to-paycheck (that is, the tragedy that our governmental system can’t find solvency off of half our incomes). Yet the author manages to compress the subsequent 80 years (up until 2002) into his 18 page epilogue – Wikipedia style. This was great as I really…really didn’t want to read another tax tome.

More to the point, the author relays the story in about the most engaging way possible without resorting to scurrilous anecdotes about the cast of characters involved (which I secretly desired, of course). Certainly I now have a better understanding about why the income tax was deemed necessary and, indeed, more fair than the previous high tariff system. At this stage of mass consumerism, however, I do wonder if more emphasis on a higher sales tax – at least on non-essentials – might be desirable to reduce what I still view as an absurd income tax burden (“welfare state” or not, I don’t see that many damn safety nets for anyone except AIG and the Big Three). Ideally this would enable pimps, strippers, heroin dealers, and all other such entrepreneurs to also contribute to our shared societal/economical burdens.

[Jack · Rating 4 out of 5]

A really helpful book on the history of the income tax in America (and in learning about tariffs and estate taxes too - it's all related).
Weisman leans to the left, so it's more of a "how the income tax is good for America," but I think at it's most basic level, the income tax is good for America and most Americans of most ideologies recognize that. Of course, that's not to say we like paying it. If we voluntarily paid our taxes, well, then we would have to call it something else. Anyway, the book covers the period from the Civil War to the end of Wilson's Administration. Clearly, to fight wars and maintain a strong defense, we need to tax ourselves. And to make it far for regular Americans, we need to have a progressive income tax. Weisman believes that the income tax helps balance justice and fairness as best as is humanly possible.

The book really should be just the first volume in a two volume work because the income tax as we know - a source of revenue that many Americans had to pay - with the arrival of the FDR Administration, and it grew since then. Some minor decreases under JFK, Reagan, and GW Bush, but the changes those three made were minor compared to what was there before and after they came along. Anyway, that second book would probably be more interesting.

The greatest strengths of Weisman's books, I thought, were his discussions of populism, progressivism, and the changing economic arguments from the Democrats and Republicans. Also, the character sketches of Lincoln, TR, Wilson, and the financial folks were most interesting. Finally, Weisman's look at the confederate economic system was fascinating. So it goes.

[Robert · Rating 4 out of 5]

Weisman wrote a thorough, comprehensive history of the rise of the personal income tax (and to a lesser extent, the corporate income tax). Generally, the book covers from 1860 (the Civil War) until 1920 (the end of WWI). I learned that the debates and fights over the federal income tax (and income taxes generally, probably) have been exactly the same for 150 years. Questions of fairness and disincentive were raised then, and are asked now. It really is remarkable how much the opponents and proponents sound the same in 1890s as they do in the 2000s. The one different thing now is the numbers - then the Senators and Congressmen debated over 2% tax rates, now it's 40% rates.

There were spots where I felt the narrative dragged a little. Weisman goes into detail for most of the players in each era regarding the tax - their personal lives, their careers, their debates, their election ambitions. At some point, it felt like I had been reading about the political rise of Senators more than I was about the debates and circumstances surrounding the enactment of taxes (which is what I wanted, not surprisingly [or surprisingly]). I admit that my concentration waned (I think around the time of Teddy Roosevelt, which was considerably far into the book, however), but I began to appreciate what Weisman was doing. He really was trying to give *the comprehensive history about the income tax, and was fleshing out as much as he could.

The book is a great resource, with lots of references in the back. Read it and gain the perspective that I have.

[Michael · Rating 4 out of 5]

The Great Tax Wars recounts the American icons who fought the legislative, electoral, and public opinion battles over the income tax from 1860 to 1920. The book sheds light on what would become one of the most simultaneously boring and consequential debates of the 20th Century: Who should pay taxes, and how much?

Author Steven Weisman begins with the election of Abraham Lincoln and the run up to the Civil War, and concludes with Woodrow Wilson's exit from the White House and the end of World War I. In those 60 years in between, the first income tax is enacted by the Union, its reenactment three decades later leads to the Supreme Court ruling it unconstitutional, and the 16th Amendment is ratified against uphill odds.

There are times when the debates mirror the present day. That alone makes this endeavor a worthwhile read. And if you've ever wanted to know why you mail a check every April 15th to the IRS, The Great Tax Wars is a great place to start.

[Jerrod Hansen · Rating 3 out of 5]

I enjoyed this book on several levels. The obvious history of U.S. federal taxation legislation is in and of itself interesting to me. The author succeeds at personalizing these "tax wars" through the politicians fighting them and setting a rich stage incorporating world events and social trends of each era. Conflict and war are at the root of tax policy and he demonstrates the effect warfare has on national finances, then the lesson legislators attempt to learn from each incident. It's a fun ride through familiar history (Civil War, the Industrial Age, WWI, the depression) with so many familiar names (Lincoln, Roosevelt, Wilson, William Jennings Bryan) but the tax war focus reveals another facet of these events, tied together over time, that results in a particularly interesting and readable coherency.

[Sheila]

(Why, yes, I am a giant nerd.)

I picke this up because I'm fascinated by the intersection of Congress and the tax code, and how
the "will of the people" translates into the tax returns we do every April. So far, the book has been entertaining and informative. I'll keep you updated.

[B · Rating 4 out of 5]

more interesting early on when the tax was novel and tariffs were dominant. interesting contrasts with present day. book whiffs on underlying thesis: why did top marginal rate become top political issue? no answer here to timely question.

[Scott Ford · Rating 4 out of 5]

An examination of the development of the modern American tax system. Covers history from the Civil War to WWI. A very interesting read.

[Stefan · Rating 4 out of 5]

Fascinating history of the income tax confirms progressive tax system is necessary for economic stability and even social justice.