The Flat Tax: An Idea Whose Time Already Came

I had to run to the doctor’s office tonight.  The back of my leg (just above the calf muscle) has been giving me fits for a couple days and, since I couldn’t diagnose it, I figured I’d get a second (well, actually a first) opinion.  It turned into a big nothing…a bit of tendonitis.  I’ve been walking more and riding my bike more, so a bit of fatigue behind the knee should be expected.  Of course, this has nothing to do with history except to lay down a proper excuse as to why I’m keeping Today’s History Lesson brief.

We talked about the Revenue-Marine yesterday and its use to assist in the proper collection of tariffs.  Let’s continue in that vein today.

In August of 1861, the American Civil War was just a couple of months old, and again, the government was feeling cash-strapped.  President Lincoln, in the Oval Office since March, had a Commander-in-Chief’s-eye view of the final collapse of the Union and beginning of hostilities between U.S. forces and those from the C.S. (Confederate States).

When he first took the Oath, he was already thinking about the costs of returning the “wayward” South to the Union.  Some of his earliest discussions with his Cabinet involved the concept of an income tax should war break out.  Today, income tax is a part of our existance, but in Civil War times, it was a new burden to lay on the citizens.  But unlike today (if I may editorialize a bit), at least Congress and the President did some things right when it passed, on August 5, 1861, the first income tax legislation in the form of the Revenue Act of 1861:

• It was small.  The tax rate was 3%.
• It was flat.  The 3% rate was assessed across the board.
• It had provisions for the poorest of citizens.  The tax was only levied on those making more than $800 a year.

The Revenue Act was in force for a year, when it was replaced by the Revenue Act of 1862.  The new Act introduced the graduated rates we know so well today (3% on incomes greater than $600/yr, 5% on those greater than $10,000/yr).  It also added a termination provision…the Act would cease in 1866.

If only our tax laws were remotely similar to those from Lincoln’s day…

Recommended Reading: Lincoln

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Lincoln’s Sword

March 4th was Inauguration Day in the U.S. until 1933 when the Twentieth Amendment relocated it to January. 

As luck would have it, yesterday I finished reading Douglas Wilson’s prize-winning Lincoln’s Sword: The Presidency and the Power of Words. It’s a magnificent book that shows Lincoln’s grasp of words and writing and how he used them to convey big ideas to the general public. With his eloquence and metaphors disguised as “plain talk,” he solidified support for his policies and also won over a few opponents. Nowhere is this more apparent than in his Second Inaugural Address. 

The speech, pictured above, was delivered on March 4, 1865 – just days before the Civil War ended.  The Union’s victory was assured, so everyone gathered to hear a speech that would, at the very least, congratulate the North on its victory and reaffirm the belief that God was indeed on their side.  But Lincoln, who was nothing if not unpredictable, instead suggested that the North was complicit in this judgment from above.

If we shall suppose that American slavery is one of those offenses which, in the providence of God, must needs come, but which, having continued through His appointed time, He now wills to remove, and that He gives to both North and South this terrible war as the woe due to those by whom the offense came, shall we discern therein any departure from those divine attributes which the believers in a living God always ascribe to Him? Fondly do we hope, fervently do we pray, that this mighty scourge of war may speedily pass away. Yet, if God wills that it continue until all the wealth piled by the bondsman’s two hundred and fifty years of unrequited toil shall be sunk, and until every drop of blood drawn with the lash shall be paid by another drawn with the sword, as was said three thousand years ago, so still it must be said “the judgments of the Lord are true and righteous altogether.

And instead of gloating that his restoration of the country – without slavery – had been successful, he looked ahead to reconciliation and being united again.

With malice toward none, with charity for all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in, to bind up the nation’s wounds, to care for him who shall have borne the battle and for his widow and his orphan, to do all which may achieve and cherish a just and lasting peace among ourselves and with all nations.

It’s no wonder that he expected it to “wear as well as – perhaps better than – anything I have produced.” 

Recommended reading: Lincoln’s Greatest Speech?

UPDATE: (3/5) A more rigorous discussion of the speech is found at The Edge of the American West.  A fight even breaks out in the comments!

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