http://www.arlindo-correia.com/010104.html
The Great Tax Wars
(Income Tax)
September 22, 2002, Sunday 

Birth, Death and the Other One 
By Robert J. Samuelson 
THE GREAT TAX WARS 
Lincoln to Wilson: The Fierce Battles Over 
Money and Power That Transformed the Nation. 
By Steven R. Weisman. 
419 pp. New York: Simon & Schuster. $27. 
February 1, 2004, Sunday 

Nothing Is Certain but Death 
By James K. Galbraith 

PERFECTLY LEGAL 
The Covert Campaign to Rig Our Tax System 
to Benefit the Super Rich -- and Cheat Everybody Else. 
By David Cay Johnston. 
338 pp. New York: Portfolio. $25.95. 
Except for Social Security, which has 45 million beneficiaries and about 150 million worker-taxpayers, no federal activity touches more people more routinely than the income tax. In 1999, about 123 million Americans filed returns and paid just over $1 trillion. This was roughly half of federal revenues, with the remainder coming mostly from payroll taxes, the corporate tax and excise taxes. The income tax is such a huge and normal part of life that most Americans must assume that it has existed forever. It hasn't.  Until World War II, only the wealthy and very-upper-middle class paid the tax. In 1939, that was 3.9 million people, equal to about 7 percent of the labor force. As important, the tax had come into permanent being only in 1913, after a long struggle that was ultimately resolved by a constitutional amendment. The great virtue of Steven R. Weisman's engaging reconstruction of this largely forgotten history is to remind us how much has changed in the past 50 to 60 years.  During this period, the federal government has grown from a modest to a mammoth presence in Americans' lives. A giant government requires giant taxes. In the 19th century, when government spending was only a few percentage points of national income, tariffs on imports provided most revenues. Except for wars, things stayed that way until the Great Depression. In 1929, federal spending was 3 percent of national income. Now, it's about 20 percent. 		 <tax_collector.jpg> <tax_collector.jpg>		
		Click to enlarge Tax Collector Marinus van REYMERSWAELE, Flemish painter, 1542 Wood, 103,7 x 120 cm Alte Pinakothek, Munich		
As Weisman, an editorial writer for The Times, tells us in ''The Great Tax Wars,'' three obstacles long blocked a progressive income tax. The first was popular sensibility. A progressive tax seemed to subvert the national values of ''hard, work, thrift, ingenuity and risk-taking'' because it imposes higher tax rates on people with higher incomes. 
The second obstacle was Article I, Section 2 of the Constitution, which decreed that ''direct taxes shall be apportioned among the several States . . . according to their respective Numbers.'' Taken literally, this meant that if New York had 10 percent of the population and Delaware 2 percent, then New York would pay 10 percent of any tax and Delaware 2 percent. Because income wasn't distributed according to population, this interpretation -- not universally accepted -- prohibited a federal income tax. To constitutional defenders, the language reflected a political bargain. It prevented the ''more numerous poorer states'' from plundering ''the fewer number of rich states,'' Weisman writes. 
Finally, there was the tariff, which was more than a means of raising money. It also protected manufacturing industries. It was popular in the Northeast, the country's industrial center, and unpopular in the South, a big buyer of manufactures. An income tax, by providing a new source of money, would have permitted lower tariffs, threatening some manufacturers with bankruptcy. 
All these barriers ultimately fell. Small farmers and growing numbers of factory workers felt increasingly misused by giant industrial and financial organizations, which set wages for workers and freight and interest rates for farmers. The rise of a class of superwealthy tycoons -- the Andrew Carnegies and John D. Rockefellers -- fed envy and strengthened the view that the rich should pay more of government's costs. Tariffs had the disadvantage of taxing all consumers, while an income tax affected only the wealthiest. 
In 1894, Congress enacted a small income tax (a 2-percent tax on incomes exceeding $4,000 and affecting only about 2 percent of Americans) as part of a modest tariff reduction. The next year, the Supreme Court declared the tax unconstitutional. Ratification of the 16th Amendment in 1913 finally disposed of the constitutional obstacle. As Weisman shows, this was a surprise. Only 12 states had to reject the amendment for it to fail. A core of Republican-controlled Northeastern and Midwestern states seemed sufficient. But Democrats won unexpected legislative elections in 1910 and 1912, ensuring ratification. 
Expedience, more than changing ideas, really created the modern income tax. The government simply needed more money. Here, war was the catalyst. Indeed, Congress passed the first income tax in 1862 to pay for the Civil War. That tax ultimately imposed rates as high as 10 percent on incomes of $10,000 or more. Only a small minority of Americans paid. Congress let the tax expire in 1872, possibly avoiding a fatal challenge to its constitutionality. 
In World War I, Congress raised the top rate of the new income tax to 77 percent, but after the war, Treasury Secretary Andrew Mellon gradually reduced it to a top rate of of 24 percent. No one can know what would have happened after World War II (when rates were again raised and, more important, the number of taxpayers hugely expanded) if the cold war had not maintained high military spending. The tax might well have receded in significance, as it did after World War I. 
Though not a page-turner, Weisman's account is crisply written, highly readable and informative. The fascinating cast of characters -- including Salmon P. Chase (the first Civil War treasury secretary), William Jennings Bryan and Woodrow Wilson -- illuminate the social upheavals and political conflicts of another era. If there is a flaw here, it is Weisman's barely disguised view that the story is a morality tale pitting enlightened supporters against selfish opponents. His perspective makes him too uncritical of what the income tax has become. 
No tax is better than the spending it supports. The possibility that some government programs are wasteful, ineffective or politically self-serving is one that Weisman ignores. Likewise, he overlooks the tax's growing and self-defeating complexity, which confounds understanding and invites tax avoidance. Without abandoning progressivity, the tax could have lower top rates and a broader base. But that would prevent Congress from providing tax breaks for popular causes, from retirement savings to child care, while at the same time denouncing confusing tax rules and heavy-handed enforcement. 
The fact that Congress both creates and criticizes the confusion abets popular cynicism. The income tax may be essential to modern government, but it also reflects an enduring political contradiction: Americans dislike high taxes, even while embracing the pleasures of high spending. 
Robert J. Samuelson writes a column for Newsweek and The Washington Post Writers Group. A collection of his columns was recently published as ''Untruth: Why the Conventional Wisdom Is (Almost Always) Wrong.'' 
Published: 09 - 22 - 2002 , Late Edition - Final , Section 7 , Column 1 , Page 29 
September 11, 2002, Wednesday 

BOOKS OF THE TIMES; History Lessons on Tax-Policy Strife 
By ALLAN SLOAN 
THE GREAT TAX WARS 
Lincoln to Wilson -- The Fierce Battles Over Money and Power That Transformed the Nation 
By Steven R. Weisman 
419 pages. Simon & Schuster. $27. 
Federal tax policy, normally relegated to the business pages, is hot news these days. 
The sudden return of federal budget deficits has ignited a debate over the role that President Bush's 2001 tax cut has played in transforming huge projected surpluses into huge deficits. We are bombarded with revelations of how corporations and rich individuals are playing games, such as moving to Bermuda, to avoid taxes. And in the not-too-distant future questions of the fairness and adequacy of Social Security taxes will move front and center when the country finally confronts the gigantic gap between Social Security's commitments and its projected revenues. 
''The Great Tax Wars: Lincoln to Wilson -- The Fierce Battles Over Money and Power That Transformed the Nation,'' by Steven R. Weisman, focuses on this timely topic. But this book does not really integrate those past battles with the current ones, which is unfortunate. We need a book that uses history to illuminate today, rather than leaving us to connect most of the dots ourselves. And Mr. Weisman, an editorial writer for The New York Times, could do a good job of writing such a book. He has written about business and economics for years, and has the ability to explain complicated subjects in ways that nonmavens can grasp. 
But ''The Great Tax Wars'' does perform a useful service by providing historical context, which is sorely lacking in most current discussions. The tax wars that Mr. Weisman writes about involved arguments over fairness, the taxation level at which people would no longer care to work and the differing ways that employment income and investment income are taxed. Sound familiar? Many of today's debates involve those very topics. 
The book covers the period from 1860 to 1920. Unless you are a financial historian, the logic behind picking this period is not immediately apparent. Mr. Weisman starts his history shortly before Abraham Lincoln got a temporary federal income tax passed to help pay the North's Civil War expenses, and he ends during the Woodrow Wilson administration, when the income tax became entrenched a few years after the adoption of the 16th Amendment. That amendment overturned an 1895 United States Supreme Court decision -- at the time, as controversial as Bush v. Gore -- that declared the personal income tax illegal. It is no coincidence that the period Mr. Weisman writes about begins and ends with wars. Wars are expensive, and the country could not borrow enough to cover the whole bill. Hence the pressure for revenues from income taxes. 
Mr. Weisman halfheartedly tries to tie his history into today's debate with a short introduction and a 19-page epilogue, but these read like afterthoughts. His real passion is making 60 years of economic debates read like newspaper articles, a project that he says he started thinking about six years ago. 
What comes through clearly in ''The Great Tax Wars'' is that even though income taxes are accepted today and seem to have been around forever, they are a relatively recent development. For most of the 18th and 19th centuries and the early part of the 20th, the federal government depended not on income taxes, but rather on revenues from customs duties, liquor and tobacco. These are all consumption taxes, based on what people consume. They are the polar opposite of income taxes. 
On a proportionate basis, high-income people are less affected by these consumption taxes than low-income earners because they spend a smaller proportion of their income on consumer goods. The opposite is true of income taxes, which affect high-income people much more than low-income ones. 
Mr. Weisman attributes the Union victory partly to the North's willingness to raise significant sums through an income tax, which the Confederacy did not do. The South, where most wealth consisted of slaves and agricultural property, was at a disadvantage compared with the North, where the rising merchant and manufacturing classes were better able to pay taxes than the asset-rich but cash-poor Southern gentry. 
Mr. Weisman occasionally leavens his history with little anecdotal gems. For instance, he describes Mark Twain's brush with the tax man. Mr. Twain ''reported in 1864 that he had paid an income tax of $36.82, plus a $3.12 fine for filing late,'' Mr. Weisman writes. He continues, ''But this was all right with him, he said, because it made him feel 'important' that the government was finally paying attention to him.'' 
The consumption-versus-income-tax battle raged for decades, with income taxes periodically adopted and then dropped, and customs duties rising and falling, depending on political fashion. The Supreme Court outlawed the personal income tax in a controversial and confusing decision in 1895 that was overturned when the 16th Amendment was ratified in 1913. One result, Mr. Weisman writes, is that in 1913, ''nearly 95 percent of federal revenues came from the purchase of commodities, which were paid disproportionately by families of modest means.'' He continues, ''By 1930, by contrast, even after the tax reductions following the end of the war, two-thirds of federal revenues came from income and corporate taxes.'' 
The nation's income tax debate, nearly 150 years running, will probably continue indefinitely, with critics attempting to roll back President Bush's tax cut, which grows rapidly in future years and disproportionately benefits a few people with very high incomes. It especially benefits the heirs of the 2 percent of taxpayers whose estates are subject to the inheritance tax. The inheritance tax is scheduled to be repealed entirely in 2010, but to return in 2011. Mr. Bush pushes at every opportunity to make the cuts permanent. 
It is a shame that Mr. Weisman did not fully incorporate contemporary tax battles into his book. But even in its current form, ''The Great Tax Wars'' is useful reading for anyone interested in understanding what tax debates are all about. 
Allan Sloan is the Wall Street editor of Newsweek. 
Published: 09 - 11 - 2002 , Late Edition - Final , Section E , Column 1 , Page 6 
YALE REVIEW OF BOOKS
Tax Man Cometh 
A New York Times reporter chronicles the advent of the income tax.
The Great Tax Wars: From Lincoln to T.R. to Wilson: How the Income Tax Transformed America 
Steven Weismann 
Simon & Schuster, 432pp, $27
reviewed by Susannah Camic
Albert Einstein once said that “the hardest thing in the world to understand is the income tax.” In The Great Tax Wars, Steven Weisman attempts to prove Einstein wrong as he sets about to make obscure debates about taxation in the United States, in the years from 1860 to 1920, read as if their “arguments were in the pages of the newspapers, magazines and news broadcasts and perhaps even the television talk shows of today.” Despite the difficulty of this task, Weisman succeeds in producing an accessible and even captivating account of the complex politics of the income tax, although he does not always delve into the implications of his narrative. 
The story that Weisman, the chief diplomatic correspondent for the New York Times, reports is an important one: during the years between the Civil War and World War I, opposing political factions in American society fought bitterly over the enactment of the income tax. Prior to the Civil War, the U.S. government did not tax incomes; instead, it derived its revenues from tariffs, or duties on imports. The distinction between these two forms of taxation is significant because the poorer segments of society bear the primary burden for paying tariffs, since the poor spend larger percentages of their incomes on basic goods than do the wealthy. On the other hand, wealthy people shoulder the brunt of a progressive income tax, which rises at higher income levels. Essentially, during the period Weisman examines, America decided whether the poor or the wealthy would pay the costs of running the federal government. 
Recounting the drama of this decision is Weisman's goal, and he meets it in a clear and entertaining fashion. In lively and detailed prose, he depicts the development of U.S. tax policy using anecdotes and personal tidbits to enliven an installment of American history that most would otherwise find dull. Weisman's experience in journalism is evident; his narrative of specific episodes in the adoption of the income tax reads like a thorough and engaging magazine article. For instance, describing J. P. Morgan's bailout of the federal government in response to a crisis in gold reserves in 1895, Weisman explains the workings of the financial crisis in terms easily understood by a general reader, interweaving economic history with a colorful evocation of Morgan's personality, business life, and aspirations. 
Beyond presenting these important policy debates in an approachable manner, Weisman also claims to probe some of the tensions that he sees as fundamental to the political development of American society, namely the conflict between “justice” and “virtue.” Some Americans firmly embrace the ideal of “justice,” the belief that, in the interest of fairness, resources should be distributed somewhat equally among citizens. In contrast, others hold that wealth comes as a consequence of “virtue”-work, creativity, thrift-and that the wealthy are thus entitled to keep the monetary rewards of their own talent and good behavior. 
Readers may be tempted to criticize The Great Tax Wars for oversimplifying these complicated ideals and drawing the distinction between them too broadly. After all, many Americans have combined ideals of justice and virtue, and both of these are beliefs of great historical complexity. But Weisman does not claim to provide a full analysis of Americans' belief systems; he only wants to clarify and discuss a specific policy debate. And, as he shows, rhetoric falling more clearly into one or the other of his two categories did shape the course of the historical controversy. In some of the most vivid passages of the book, Weisman explores how major American historical figures such as William Jennings Bryan and the Rockefellers mobilized the language of justice or virtue to sway debates that would influence the tax system for generations. For example, in a gripping scene, Weisman recounts the day in 1894 that Bryan convinced Congress to enact America's first peacetime income tax, using his celebrated rhetorical skills to place the burden of government financing on the wealthy and to condemn those who were unwilling to accept this responsibility as unpatriotic and unwelcome in American society. 
As in this episode, Weisman's account of the great tax wars focuses almost entirely on the role of powerful individuals in shaping tax policy. Weisman provides extensive biographical material on these historical figures and explains how their backgrounds influenced their tax policy beliefs. He discusses, for example, how Teddy Roosevelt's experiences as New York police commissioner convinced him that income inequality would lead to chaos, crime and anarchy. By heavily emphasizing the power of personality in shaping tax history, Weisman implicitly recognizes a consequential policymaking ingredient frequently ignored in more academic accounts of the subject. Realizing that important political shifts can turn on the incidental personality traits and preferences of national leaders, Weisman brings out the deeply complex and even arbitrary nature of the tax-making process. In the United States at least, new taxes often arise not out of a major public outcry, but from the unique combination of historical personalities, influences, and ideas that converges in centers of power. 
Yet, while tacitly acknowledging this point, Weisman misrepresents his account when he characterizes it as a contest of the two distributive ideals of justice and virtue. According to the details of Weisman's narrative, the enactment of a permanent income tax, the climax of his story, resulted not from a major shift in Americans' sentiments about justice, but, in large part, from personality traits of the sort illustrated in Teddy Roosevelt's fear of anarchy. Similarly, the increase and entrenchment of income taxation during World War I emerges not as a victory of the idea of equality over that of individual achievement, but instead as a triumph of vocal congressional proponents of the income tax, such as Representative Claude Kitchin, responding to the federal government's need for revenue. By framing his book in terms of abstract distributive ideals, Weisman subtracts the recognition his analysis otherwise accords to individual leaders, their personal preferences and their power struggles, in enacting the income tax. 
While focused primarily on the 1860-1920 period, Weisman also takes a brief stab at examining post-World War I tax policy, including the tax battles of recent decades, though explaining current tax policy is plainly not his main goal. His account does raise, however, important questions about the more contemporary period, when the relative role of personalities and values shifts in current tax politics is even less certain than in his study. With its engaging style and careful retelling of several decisive episodes in American political history, The Great Tax Wars should draw readers to pose such about questions the tax wars of our own day. 
Steven Weismann is a senior in Silliman College. 
La plus ça change
BY ROBERT S. MCINTYRE
The Great Tax Wars
By Steven R. Weisman. Simon & Shuster, 367 pages, plus notes and index, $27.
As every schoolchild is taught, and many adults try to forget, our constitution was adopted to give the federal government the power to run a real country- and to do so, the power to tax. The debate over revenues that started then has pretty much never ended. George Washington, who presided over the constitutional convention, knew all too well the dangers of an inadequately funded government from his travails leading the woefully underfinanced Continental Army during the revolution. As Washington’s ally Alexander Hamilton put it in Federalist No. 30 in defense of the constitution, “Money is the vital principle of the body politic; as that which sustains its life and motion . . . . A complete power, therefore, to procure a regular and adequate supply . . . may be regarded as an indispensable ingredient in every constitution.” 
Opponents of the constitution also understood that taxes are essential to a working national government-they simply didn’t want one. Not untypical, says University of Texas law professor Calvin Johnson, was the anti-Federalist rhetoric in a “Letter from a Farmer and a Planter to the Farmers and Planters of Maryland” (1788). The writer charged that to enforce the federal tax laws, Congress would send in soldiers “to cut your throats, ravage and destroy your plantations, drive away your cattle and horses, abuse your wives, kill your infants, and ravish your daughters, . . . until you get into a good humour, and pay all that they may think proper to ask of you.” 
Of course, the constitution and its taxing authority were soon ratified by the states. But the founders’ dream of a robust United States of America took a long time to come to fruition-because the taxing power lay largely dormant for the first 70 years after the constitution was ratified. Instead, the federal government paid for its limited activities with highly regressive consumption taxes, mainly protectionist import duties. 
In The Great Tax Wars, Stephen R. Weisman of the New York Times tells how and why that changed. It’s the story of the progressive federal income tax, from its temporary inception during the Civil War to its firm reestablishment in the early part of the 20th century. Anyone who wants to understand the roots of today’s tax politics can learn a lot by reading this entertaining book. Until you do that, Weisman’s tale is well worth summarizing here. 
When the Civil War began, it was not expected to last long -“two or three months at the furthest,” the Chicago Tribune predicted. So the fact that the Union, not to mention the Confederacy, had almost no source of revenues to pay for the war didn’t seem to be important at first. Borrow the money and pay it back later was the prevailing thinking. But it soon became clear that the war would take much longer and cost much more than anyone had initially conceived. 
Meanwhile, war profiteering, ever-increasing wealth concentration and the easy ability of the well-off to buy their way out of military service led to popular resentment of the rich. And so, Weisman writes, “to persuade Americans that the wealthy citizens who were prospering from the war would bear more of its cost, Congress and the President turned in 1862 to the income tax, as well as taxes on corporations. . . . [F]or the first time, taxation was also conceived and understood as an instrument that reduced inequality.” 
When Congress first considered raising taxes to fund the war, it looked to the familiar ones: higher tariffs and excise taxes. But “after a storm of criticism that these new steps would fall most heavily on the poor,” Weisman says, it became clear that something quite different was needed. Republican Rep. Schuyler Colfax of Indiana first broached the idea of a federal income tax in the summer of 1861, soon after the devastating Union defeat at Bull Run. Soon others in Congress were touting the idea that taxes should affect people based on “their ability to bear them.” 
As you might expect, this was not the universal view. Thaddeus Stevens, the Pennsylvania Republican who chaired the House Ways and Means Committee, complained that it was “vicious” and “unjust” to impose “a punishment of the rich man because he is rich.” Vermont Republican Justin Morrill, a leading member of Stevens’s committee, warned that wealthy people might leave the country to avoid paying the tax. But the income tax had a strong philosophical ally in President Abraham Lincoln, a long-time proponent of progressive taxes, having pushed (unsuccessfully) for a graduated property tax as an Illinois state legislator. Lincoln had argued that such an approach was not only “equitable within itself,” but good politics, too, since the “wealthy few . . . it is still to be remembered . . . are not sufficiently numerous to carry the elections.” 
Despite opposition, Congress passed a primitive income tax bill in 1862. But Lincoln’s defiant Treasury Secretary Samuel Chase, who had misgivings about the income tax, chose to ignore the law, preferring to concentrate on more borrowing. When that source became difficult to tap and Union military setbacks continued, Chase talked Lincoln into printing money-“greenbacks”-despite correct fears that doing so would spur inflation. 
The following year, Congress passed a more carefully thought-out income tax plan, including a new agency to enforce it. The two-rate system, taxing incomes greater than $600 at 3 percent, and more than $10,000 at 5 percent, was part of a larger revenue bill that also taxed inheritances, corporations, and various commodities. Lincoln signed the bill on July 1, 1862, and quickly hired the first commissioner of Internal Revenue. 
By the end of the war, tax withholding was in place and the top income tax rate had been raised to 10 percent, to squeeze “the millionaires . . . who can afford to pay liberally of their means,” as one proponent put it. The political pressure for steeper progressivity was great. “There is no tax more equal than an income tax,” Rep. Morrill declared in 1863, repudiating his own earlier anti-income tax position. As Weisman points out, “The income tax was crucial to the prosecution and winning of the Civil War.” Indeed, the South’s failure to implement a working income tax soon enough played a big role in its downfall. Confederate money with no revenue backing it up soon became worthless, and the South lost the ability to finance an effective rebellion. For a while after the Civil War, the income tax remained in place to help pay off the war’s huge debt. At its peak in 1867, the income tax represented a quarter of total federal revenues. But the Republican-controlled Congress soon returned to its Whiggish roots. Income taxes were gradually reduced, and in 1872, repealed, while the government reverted to high, protectionist tariffs to pay its bills. “By the end of Reconstruction, the system of high tariffs was impregnable and the income tax but a memory,” Weisman writes. Not everyone agreed with this return to regressivity. Republican Senator John Sherman of Ohio, later author of the Antitrust Act, for example, argued strenuously that it was unfair to tax the consumption of the poor and middle classes while leaving the rich alone. But for two decades after repeal of the income tax, proposals to reinstate it were ignored. Weisman really hits his writing stride when he get to the early 1890s. By then, he notes, tariffs had jumped to “nearly 50 percent of the value of goods purchased by consumers”- an enormous burden on average Americans, but a boon to American corporations who could keep their own prices high due to the absence of price competition from abroad, making the tariff system effectively a negative tax on the wealthy. In the 1892 elections, the voters were fed up with the GOP’s corrupt corporate toadying, and they sent to the White House Democrat Grover Cleveland, who promised reform. In 1894, Cleveland joined the populist Rep. William Jennings Bryan (D-Neb.) in a fight to restore the income tax. Bryan’s proposal was remarkably timid: a mere 2 percent tax, applicable to corporations and the 2 percent of the population making more than $4,000 a year. 
During the congressional debate, one income-tax opponent complained that poor Americans would feel “humiliated and degraded” by not having to pay the income tax, and that it would leave only the rich with “first-class citizenship.” Noting that poor Americans obviously paid far more than their fair share of tariffs, Bryan replied, “If taxation is a badge of free men, the poor people of this country are covered all over with the insignia of free men.” Another spokesman for the rich contended that the 2 percent income tax would drive “rich men to go abroad and live.” Bryan countered, “Of all the mean men I have ever known, I have never known one so mean that I would be willing to say of him that his patriotism was less than 2 percent deep.” 
The income tax bill was eventually approved by Congress, although to Cleveland’s dismay, measures to cut tariffs were dropped in the Senate. But the income tax had one more hurdle to surpass: the U.S. Supreme Court. The Supreme Court majority of the late 19th and early 20th centuries was one of the worst in American history. Its most infamous decision, Plessy v. Ferguson, established the legality of “separate but equal” facilities for blacks and whites, thereby legitimizing “Jim Crow” laws. Its 1905 decision in Lochner v. New York rejected a state law setting a 60-hour maximum work week. 
In 1895, the court dealt with the newly passed income tax law, which was challenged by corporate interests. By a 5-4 vote, the court threw out the income tax as unconstitutional. There was no single majority opinion in Pollack v. Farmers’ Loan and Trust Co., but rather several opinions, offering conflicting, wholly unpersuasive legal arguments for the decision. The real rationale was simpler: the income tax, said one justice, is “an assault on capital,” a “stepping-stone to . . . a war of the poor against the rich,” and a path to “sure decadence.” It would take two decades and a constitutional amendment to undo the Supreme Court’s lawless decision. By the early part of the 20th century, concerns about excessive concentrations of wealth and power were continuing to grow. Ironically, Theodore Roosevelt, who was number two on the extremely conservative McKinley-Roosevelt ticket that defeated Bryan in the presidential election of 1900, came to personify the Progressive campaign to change our tax policies to address those problems. In the spring of 1906, President Roosevelt proposed restoration of the federal estate tax. By the end of the year, he called for a graduated tax on income as well. 
Unfortunately, Roosevelt was more talk than action when it came to taxes. But his Republican successor, William Taft, felt it was his mission to fulfill Roosevelt’s goals. In 1909, Taft succeeded in enacting a 1 percent corporate income tax (called an “excise tax” to get around the Pollack decision), but his efforts to pass a personal income tax were thwarted by the GOP Congress. As a sop to Taft and public opinion, Congress instead approved a constitutional amendment to overrule the Supreme Court’s Pollack decision, confidently assuming that it would fail to gain the required three-fourths support from the mostly Republican state legislatures. A few, mostly southern states, quickly endorsed the income tax amendment, led by Alabama in the summer of 1909 and followed by Georgia, Illinois, Kentucky, Maryland, Mississippi, Oklahoma and Texas. But support in the wealthy northeast and mid-Atlantic states looked doubtful. Then Theodore Roosevelt intervened again. His decision to run against Taft for the presidency in 1912 as a “Bull Moose” split the Republican party, and “Democratic routs of previously Republican [state] legislatures . . . turned the tide [for ratification].” 
Entrenched business interests fought bitterly to the end. In New York, for example, Weisman notes, an army of lobbyists, bankers, financiers, chambers of commerce officials and businessmen descended on . . . Albany. . . . The Albany Evening Journal, a Republican mouthpiece, argued that the tax would “divide the population into two classes, the class which contributes to the support of the Government, and the class which does not contribute.” 
“It was an absurd comment,” Weisman points out, “given that the class that supposedly ‘does not contribute’ was actually paying most of the revenues in the federal treasury as customs duties and excise taxes.” 
By early 1913, 42 of the 48 states, including New York, had ratified the Sixteenth Amendment authorizing Congress to “tax incomes from whatever source derived.” On his way into the White House to implement this new authority was the new Democratic president, Woodrow Wilson, who immediately called for slashing tariffs and replacing them with a progressive income tax. 
The system of high, protectionist tariffs, Wilson said, “cuts us off from our proper part in the commerce of the world, violates the just principles of taxation, and makes the government a facile instrument in the hand of private interests.” Wilson’s Treasury Secretary William McAdoo was a wealthy businessman, but he firmly supported the President, condemning the tariff system as “a general tax on the entire population for the benefit of private industry,” raising consumer prices not only on imports but on domestic products as well. 
At the end of the summer of 1913, the Democratic Congress approved Wilson’s tax reform program, over strenuous Republican opposition. The new law slashed tariffs from an average of 40 percent to 28 percent, and exempted many necessities entirely. To replace the revenues lost from tariff reform, it established a progressive income tax on the best-off 4 percent of the population, with rates ranging from 1 percent up to a high of 7 percent on incomes in excess of half a million dollars. 
Wilson’s tax changes were a huge victory for tax fairness, and the forces of conservatism were understandably not happy. The president of the American Bar Association accused Democrats of “seeking to turn back the tide of progress” and “plunge us into a sea of socialism.” The National Association of Manufacturers issued stickers saying “Free Business from Political Persecution.” But these rants went generally ignored. 
The new income tax was propitiously timed, as it proved essential in financing the huge increase in federal spending that World War I would require. With the U.S. entry into the Great War, the federal budget jumped from less than a billion dollars in 1916 to almost $14 billion by 1918. “The income tax,” Weisman notes, “was needed to finance that explosion in spending.” By the end of the war, the top income tax rate had been increased to 77 percent, corporate rates were boosted sharply, and a permanent estate tax was instituted as well. 
Republicans regained control of the Congress in the 1918 elections and the White House in 1920, and there Weisman ends his tale. But in his epilogue, he points out that although taxes were cut sharply after World War I, the new philosophy “that taxes ought to be borne according to the ability to pay” has proven too popular for any of Wilson’s successors to abandon completely. In 1913, he notes, almost 95 percent of federal revenues had come from regressive taxes on consumer spending. By 1930, even after the tax reductions under Harding and Coolidge, two-thirds of federal revenues came from progressive personal and corporate income taxes-percentages similar to what we see today. 
To be sure, the battle over just how fair taxes ought to be will never be settled conclusively, if only because far too much money is at stake. Over the past eight decades, conservative presidents and Congresses have typically pushed for less progressive tax rates and more loopholes for corporations and the wealthy, while liberals have usually pushed in the opposite direction. Tax lawyers and accountants for the rich and powerful devise complicated tax-dodging schemes-and then complain bitterly about “complexity” when their loopholes are closed. Meanwhile, the terms of the tax debate haven’t changed much either. Year in and year out, the rich have been tarred as unpatriotic shirkers of their tax responsibilities or praised as the swashbuckling engines of economic growth (who unfortunately become uninspired and indolent at the thought of paying taxes). 
But with all the ebbs and flows, even politicians who favor the most outrageous tax giveaways to the well-off have tended to couch their arguments in faux-populist tones. George W. Bush, for example, finds it necessary to insist-preposterously -that his recent upper-income tax cuts made the tax system more progressive and that his hatred of taxes on inherited wealth reflects his concern for small businesses and farmers. 
If pressed, I could quibble that Weisman’s writing is sometimes a bit drier than I’d prefer and complain that his chronology occasionally left me a little confused. But much more important, Weisman successfully gets to the heart of what the tax fights were really about from 1860 to 1920, and thereby helps us understand much better what they’re about today. 
On a final note, Weisman’s book got me thinking about which revered presidents are depicted in the granite of South Dakota’s Black Hills. There’s George Washington, the father of federal taxation, there’s Abraham Lincoln, who gave us our first federal income tax, and there’s Theodore Roosevelt, whose zeal for reestablishing the income tax was crucial. Yeah, the tax-conflicted Jefferson is up there, too, but for what it’s worth, Weisman has inspired me to view Mount Rushmore as a reasonable approximation of America’s Tax Hall of Fame. 
Robert S. McIntyre is director of Citizens for Tax Justice. 
January/February 2003
Tax and Fend
A review of Stephen R. Weisman's The Great Tax Wars 
By Robert S. McIntyre <http://www.washingtonmonthly.com/features/2001/0301.mcintyre.html>
Speaking before the NAACP annual convention in 2000, candidate George W. Bush famously apologized for the GOP's history of racial insensitivity. "The party of Lincoln," Bush said, "has not always carried the mantle of Lincoln." As president, Bush has taken a few modest steps to bridge the racial divide--for instance, hiring Colin Powell and Condi Rice. But when it comes to another old and bitter split in American politics, over who shall pay how much in taxes, George W. Bush is no Abe Lincoln. 
Unlike Bush, our first Republican president was a long-standing proponent of progressive taxation. As New York Times reporter Stephen R. Weisman explains in his new book, The Great Tax Wars, Lincoln started early, when he pushed (unsuccessfully) for a graduated property tax as an Illinois state legislator, arguing that such an approach was not only equitable within itself, but politically savvy, since the "wealthy few ... are not sufficiently numerous to carry the elections." Then, as president, facing the burden of finding money to wage the Civil War, Lincoln took an even more radical step. Congress had been considering only higher tariffs and excise taxes to pay for the war. But "after a storm of criticism that these new steps would fall most heavily on the poor," writes Weisman, it became clear that something different was needed. After the Union's devastating defeat at Bull Run, and amid a spate of war profiteering and other corporate scandals, Rep. Schuyler Colfax, a Republican from Indiana, suggested imposing a federal income tax, with higher rates for those best able to pay. Lincoln happily supported the idea. 
Many in his own party furiously disagreed. Thaddeus Stevens, the Pennsylvania Republican who chaired the House Ways and Means Committee, complained--in language that still echoes in The Wall Street Journal editorial pages--that it was "vicious" and "unjust" to impose "a punishment of the rich man because he is rich." When Congress passed a primitive income tax bill in 1862, Lincoln's defiant treasury secretary, Samuel Chase, ignored the law, preferring to fund the war through more government borrowing (sound familiar?). When that source became difficult to tap and Union setbacks continued, Chase talked Lincoln into printing more greenbacks--despite justified fears that doing so would spark inflation. 
The following year, Congress passed, and Lincoln signed, a more carefully thought out income tax bill, which included the creation of a new agency to administer it. The new law established a two-rate system of 3 percent (for incomes over $600) and 5 percent (for incomes over $10,000), as well as taxes on inheritances, corporations, and various commodities. By the end of the war, top tax rates had been raised to 10 percent to squeeze "the millionaires ... who can afford to pay liberally of their means" as one proponent put it. But while the North funded its side of the war with a progressive income tax, the South took too long to follow suit. Unbacked by revenue, Confederate money soon became almost worthless, costing the South its ability to finance its rebellion. The North's income tax, Weisman notes, was "crucial to the prosecution and winning of the civil war." 
Unfortunately, Lincoln's example is lost on President Bush. Shortly after he took office, Bush pushed through a tax bill that drastically reduced taxes on the wealthy. Supposedly, projected surpluses were to cover the huge cost. But since then, as the costs of war and the size of deficits have mounted, the administration hasn't pushed to raise taxes--as virtually every other president in wartime has done--but actually has sought to cut taxes further. Hints from the White House suggest that in his State of Union address, Bush will call for making last year's tax cuts permanent and perhaps for replacing the corporate income tax with a far more regressive national sales tax--a move that, if successful, would probably put the personal income tax on the road to oblivion, too. 
As Weisman makes clear in his excellent history of the income tax, this back-and-forth battle between Democrats and Republicans over income taxes is part of a debate that has held remarkably consistent over the years. 
Rites of Passage 
As every schoolchild is taught (and as many adults try to forget), the Founding Fathers adopted the Constitution to give the federal government the power to run the country effectively--and to do so, the power to tax. But the Founders' dream of a robust United States took a long time to come to fruition because the taxing power lay largely dormant for the first 70 years after the Constitution was ratified. Instead, the federal government funded its limited activities through highly regressive consumption taxes, mainly protectionist import duties. 
The Civil War income tax temporarily changed the consumption tax approach, and even after the war the income tax was maintained for a while to help pay off the war's huge debt. At its peak in 1867, the income tax accounted for one-quarter of total federal revenues. But the Republican-controlled Congress soon returned to its Whiggish roots, gradually reducing and finally repealing the tax in 1872, and reverting to high, protectionist tariffs to pay its bills. "By the end of Reconstruction," Weisman writes, "the system of high tariffs was impregnable and the income tax but a memory." 
Not everyone agreed with this return to regressivity. Republican Sen. John Sherman of Ohio, who later authored the Antitrust Act, for example, argued strenuously that it was unfair to tax the consumption of the poor and middle classes while leaving the rich alone. But for two decades after repeal of the income tax, proposals to reinstate it were rebuffed. 
By the 1890s, Weisman points out, tariffs had jumped to "nearly 50 percent of the value of goods purchased by consumers"--an enormous burden on most Americans, but a boon to U.S. corporations who could keep their own prices high due to the absence of price competition from abroad, making the tariff system effectively a negative tax on the wealthy. Voters became fed up with the GOP's corrupt corporate toadying and in 1892 elected Democrat Grover Cleveland, who promised reform, to the White House. Two years later, Cleveland joined the populist Rep. William Jennings Bryan of Nebraska in a fight to restore the income tax. Bryan's proposal was remarkably timid: a mere 2 percent tax, applicable to corporations and the 2 percent of the population making more than $4,000 a year. 
Nevertheless, it was quickly attacked. During the congressional debate, one opponent argued that poor Americans would feel "humiliated and degraded" by not having to pay the income tax, fearing they would lack the "first-class citizenship" accorded those whose incomes were sufficiently high. Noting that poor Americans paid far more than their fair share of tariffs, Bryan replied, "If taxation is a badge of free men, the poor people of this country are covered all over with the insignia of free men." Another critic contended that the 2 percent income tax would drive "rich men to go abroad and live," to which Bryan countered, "Of all the mean men I have ever known, I have never known one so mean that I would be willing to say of him that his patriotism was less than 2 percent deep." 
A Taxing Debate 
Congress eventually approved the 1894 income tax bill, but it faced one more hurdle: the U.S. Supreme Court. The high court of the late 19th and early 20th centuries was one of the most notorious in American history, legitimizing Jim Crow laws in Plessy v. Ferguson by establishing the infamous "separate but equal" precedent for black and white facilities, and rejecting a state law to establish a maximum work week of 60 hours in the 1905 decision Lochner v. New York. 
In 1895, the court considered the newly passed income tax law, which was being challenged by corporate interests. By a 5-4 vote, the court declared it to be unconstitutional. There was no single majority opinion in Pollack v. Farmers' Loan and Trust Co., but rather several opinions, offering conflicting and wholly unpersuasive legal arguments for the decision. But the underlying rationale was clear: The income tax, wrote one justice, is "an assault on capital," a path to "sure decadence," and a "stepping-stone to ... a war of the poor against the rich." (The contemporary conservative tactic of attacking those who favor progressive taxes as indulging in "class warfare" is apparently nothing new.) It would take two decades and a constitutional amendment to undo the decision. 
In the early part of the 20th century, concerns about excessive concentrations of wealth and power continued to grow. Ironically, Theodore Roosevelt, who was number two on the extremely conservative McKinley-Roosevelt ticket that defeated Bryan in the presidential election of 1900, came to personify the Progressive campaign to improve tax policies. In the spring of 1906, President Roosevelt proposed restoring the federal estate tax. Later that year, he called for a graduated tax on income as well. 
But Roosevelt was more talk than action when it came to taxes. His Republican successor, William Howard Taft, who believed it was his mission to fulfill Roosevelt's goals, succeeded in enacting a 1 percent corporate income tax in 1909 (dubbed an "excise tax" to get around the Pollack decision). Taft's efforts to pass a personal income tax, however, were thwarted by the GOP Congress. As a sop to Taft and public opinion, Congress instead approved a constitutional amendment to overrule Pollack, confidently assuming that it would fail to gain the required support of three-fourths of the mostly Republican-controlled state legislatures. 
A few, mostly southern states, quickly endorsed the income tax amendment, led by Alabama in 1909 and followed by Georgia, Illinois, Kentucky, Maryland, Mississippi, Oklahoma, and Texas. But support in the wealthy northeast and mid-Atlantic states looked doubtful. Then Roosevelt intervened once again. His petulant decision in 1912 to challenge Taft for the presidency as a "Bull Moose" split the Republican party, and, Weisman explains, "Democratic routs of previously Republican [state] legislatures ... turned the tide [for ratification]." 
Entrenched business interests fought bitterly in places like New York, where a Republican newspaper argued that the tax would "divide the population into two classes, the class which contributes to the support of the Government, and the class which does not contribute." Again, one hears almost exactly this argument from conservatives today. One GOP lawmaker told The New Yorker's Nicholas Lemann in 2001 that unless Congress passed Bush's tax cuts for the wealthy, "[t]he tax code will destroy democracy, by putting us in a position where most voters don't pay for government." The truth, of course, is that ordinary citizens pay dearly for government, not just through their share of the income tax but also through payroll taxes, state, and local taxes, and other levies that fall much harder on them than on the rich. The idea that the wealthy alone carry the burden of paying for government is as wrong today as it was a century ago. As Weisman points out, that Republican newspaper's comment was "absurd ... given that the class that supposedly ?does not contribute' was actually paying most of the revenues in the federal treasury as customs duties and excise taxes." By early 1913, all but six states had ratified the 16th Amendment authorizing Congress to "tax incomes from whatever source derived." 
Borne Again 
The new Democratic president, Woodrow Wilson, became the first to implement this new authority, which he did eagerly, quickly proposing to slash tariffs and replace them with a progressive income tax. The protectionist tariff system, Wilson argued, "cuts us off from our proper part in the commerce of the world, violates the just principles of taxation, and makes the government a facile instrument in the hand of private interests." To blunt charges of class warfare, Wilson's Treasury secretary, a wealthy businessman named William Gibbs McAdoo, added his voice, condemning the tariff system as "a general tax on the entire population for the benefit of private industry," the effect of which was to raise consumer prices not only on imports but on domestic products as well. 
At the end of the summer of 1913, over strenuous Republican opposition, the Democratic Congress approved Wilson's tax reform program, which sharply cut tariffs and exempted many necessities altogether. To replace the lost revenue, the new law established a progressive income tax on the wealthiest 4 percent of the population, with rates topping out at 7 percent on incomes greater than $500,000. 
Wilson's tax reform was a huge victory for tax fairness. Conservatives were, of course, not happy. The president of the American Bar Association accused Democrats of "seeking to turn back the tide of progress" and "plunge us into a sea of socialism." The National Association of Manufacturers issued stickers saying "Free Business from Political Persecution." But such rants, at that moment in history anyway, were generally ignored. 
The new income tax was propitiously timed. With the United States' entry into World War I, the federal budget jumped from less than a billion dollars in 1916 to almost $14 billion two years later. "The income tax," Weisman notes, "was needed to finance that explosion in spending." By the war's end, the top income tax rate had reached 77 percent, corporate rates had increased sharply, and a permanent estate tax had been instituted as well. 
Weisman ends his tale with the Republican takeover of the Congress in 1918 and the White House two years later. But he points out that while taxes were cut sharply after World War I, the philosophy "that taxes ought to be borne according to the ability to pay" had taken root in the American psyche. He notes that in 1913, nearly 95 percent of federal revenues came from regressive taxes on consumer spending. Yet by 1930, even after Presidents Harding and Coolidge reduced taxes, two-thirds of federal revenues came from progressive personal and corporate income taxes--percentages similar to today's. 
Tax Traditions 
The battle over just what constitutes equitable taxes will probably never be conclusively settled, if only because so much money is at stake. Since Wilson first instituted the income tax, conservative presidents and Congresses have typically advocated less-progressive tax rates and more loopholes for corporations and the wealthy, while liberals have usually pushed in the opposite direction. But the terms of the tax debate haven't much changed. To this day, the rich are alternately tarred as unpatriotic tax evaders and praised as swashbuckling engines of economic growth (who somehow manage to become uninspired and indolent at the thought of paying taxes). 
But with all the ebbs and flows, even politicians who favor the most outrageous tax giveaways to the well-off have tended to couch their arguments in faux-populist tones. George W. Bush, for example, finds it necessary to insist--preposterously--that his recent upper-income tax cuts made the tax system more progressive and that his repeal of taxes on inherited wealth reflects his concern for small businesses and farmers. 
Weisman successfully gets to the heart of what the tax fights were really about from 1860 to 1920, and thereby helps us understand much better what they're about today. With the Bush administration's new economic team in place and an eye on reelection in 2004, it's a good bet that history--tax history, anyway--will soon be repeating itself once again. 
Robert S. McIntyre is director of Citizens for Tax Justice.

February 1, 2004, Sunday 

Nothing Is Certain but Death 
By James K. Galbraith 

PERFECTLY LEGAL 
The Covert Campaign to Rig Our Tax System 
to Benefit the Super Rich -- and Cheat Everybody Else. 
By David Cay Johnston. 
338 pp. New York: Portfolio. $25.95. 
READERS of this important book may be misled by the routine material up front. Here David Cay Johnston recounts two oft-told tales: the rich getting richer and the rich escaping tax. Thus he tells how from 1970 to 2000 the income share of just 13,400 households / the richest hundredth of 1 percent -- rose from 1 percent to 5 percent of all income, and from 100 to 560 times the national average. And he tells how one of those households, that of William and Melinda Gates, ''devised a way . . . to reap $200 million in profits on Microsoft stock without paying the $56 million of capital gains taxes that federal law required.'' 
Yet really, what's so shocking? In the late 1990's, the United States ran an experiment unseen since 1926: a drive to full employment based solely on private capital investment. Under capitalism, private capital is invariably held by a minority, so such prosperity must mean a rise in the wealth of the rich. The United States is not a people's republic. And it was those gains precisely that financed the surge in business investment, producing full employment and actual rising wages and income for working American families for the first time in 30 years. 
The tax take also rose, by 2 percent of total income between 1995 and 2000. The federal budget went into surplus. For a moment states like California, riding a bubble in options realizations and capital gains, also had more revenue than they could use. The prelude to recession was a rising tax burden, paid from the bite on exploding upper incomes. It should have been offset by rising public spending, to meet national needs, fight poverty and prevent the slump of 2001. But with blind faith in the New Economy, that didn't happen until terrorism and war split open the public purse. 
As Johnston knows, the real scandal of our federal tax system isn't so much what the rich didn't pay. It's what the rest of us now have to -- particularly the middle and upper middle classes, with incomes from $50,000 to $500,000. This is the group Bush is squeezing, to benefit what Johnston aptly calls the ''political donor class.'' This truly shocking story emerges later on in ''Perfectly Legal.'' 
First we have the repeal of the estate tax, which shifts the tax burden downscale and from the dead to the living. Johnston, a business and financial reporter for The New York Times, explains how this tax, affecting only a handful of the very, very rich, fell victim to the arts of propaganda: ''The term death tax is a superb example of marketing triumphing over reasoned debate. So thoroughly has the phrase been infused into Washington that many journalists . . . employ this term of advocacy instead of the neutral, and correct term, estate tax, without rebuke by their superiors.'' He notes that the pollster Frank Luntz, the carnival barker of this operation, would have advised the Democrats to call it the ''billionaire's tax.'' No such luck. 
Next there is the Alternative Minimum Tax, the ''stealth tax,'' designed for the very rich but now set to overrun Middle America. In 2000 this tax hit just 1.3 million households; Treasury estimates held that it would affect 17.9 million by 2010. But the Bush tax cuts doubled this number to 35.6 million by design: ''Between 2003 and 2012 the Bush tax cuts will force an increase of $560 billion in taxes to be paid under the alternative minimum tax. . . . It is a subsidy of the super rich paid for by the middle class and the upper middle class.'' And it is a horror -- attorney's fees in legal settlements or medical expenses can't be deducted (to the same degree), or even the costs of having many children. Still the very rich escape. Promises that this train wreck will be averted are not credible, in Johnston's view. The tax was a betrayal, and the Bush people who committed it knew exactly what they were doing. 
Then there is the payroll tax, a travesty ever since 1983, when Alan Greenspan sold the public on the myth of paying for Social Security in advance. And the difference between the amount brought in through the payroll tax and the amount needed to pay benefits underwrote Reagan's tax cuts for the rich, while the government stuffed a ''Trust Fund'' with I.O.U.'s. But with what? Paying them off will require either more borrowing or a rise in taxes -- exactly as if the trust fund did not exist. Meanwhile, the $1.7 trillion in excess payroll taxes already paid would be enough to completely pay off all consumer debt in 2001. And we are told that there is a ''crisis'' because the Trust Fund will eventually ''run dry.'' In+fact,+there's+no+need to cut the benefits for which soon-to-be-retired workers have been overcharged for decades, or to raise payroll taxes even more on the next generation. The only issue is whether wealthy Americans will pay any part of the bill. 
Finally, Johnston surveys the decrepit, undercomputerized, legislatively crippled, mismanaged and harassed Internal Revenue Service, shanghaied in recent years to pursue supposed low-income abusers of the earned-income tax credit while the returns of the criminal rich escape audit and their money slips to havens overseas. The I.R.S. is a police agency under extreme pressure to treat big perpetrators with kid gloves. This material is, all in all, perhaps the most shocking stuff, particularly when one notes names like Harken Energy and Halliburton among the defectors. 
What should be done? Perhaps daunted by deep knowledge of how the cheats work, Johnston is cautious. He considers, and then rejects, shifting to a consumption tax like the flat tax. Sensibly, he leans toward a leaner, meaner income tax, with higher top rates, few deferrals, a broad definition of income and reform of the alternative minimum tax. Add a stiff estate and gift tax to recover from the largest fortunes at death, treat capital gains and dividends as ordinary income, then cut or offset the payroll tax and you would have the elements of a fairer system. 
Interestingly, the progressive tax bill of 2003, introduced by Representatives Dennis J. Kucinich, Barbara Lee and Bernard Sanders, comes close to these goals. It would claw back $107 billion from Bush's cuts and provide $88 billion in relief to working Americans, mainly through an attractive simplified family credit. Happily a few leaders remain, in these venal days, who are prepared to think boldly about our tax problem. 
James K. Galbraith is an economist at the Lyndon B. Johnson School of Public Affairs at the University of Texas and senior scholar of the Levy Economics Institute. 
APPORTIONMENT OF DIRECT TAXES:
THE FOUL-UP IN THE CORE OF THE CONSTITUTION
Calvin H. Johnson*
Read this article here <http://www.utexas.edu/law/faculty/calvinjohnson/directtax.pdf>