What Happens When a Cute Political Strategy Backfires

Politicians throughout history have used cunning
and cute political strategies to privately accomplish one strategy while publicly supporting
another. However, what happens when a political strategy backfires and what a politician didn’t
want to happen actually does? While a federal income tax is considered common
place today, the federal government has only relied on a graduated federal income tax as
a source of revenue for around the last 100 years. For about the first 140 years of the
United States, the federal government used excise taxes, taxes on consumption, to funnel
money into the federal coffers. One reason for the federal government’s
use of excise taxes rather than direct taxes, like a graduated income tax, revolves around
the language concerning Congress’ powers of taxation outlined in Article I of the Constitution.
For Congress to implement a direct tax, the Constitution states that it must “be apportioned
among the states on the basis of population.” Considering the uneven geographical distribution
of wealth and people within the United States, this meant that implementation of a graduated
federal income tax would be virtually impossible to accomplish. However, by the late 1800s and early 1900s,
citizens across the United States began to call and lobby for a federal income tax. Their
reasoning was simple, the U.S. government’s use of high tariffs as a means of collecting
revenue was an unfair form of taxation. While high tariffs helped to protect U.S. industries
from foreign competition, corporations and industries had the ability to pass off the
effects of tariffs onto consumers through the price of their goods. Farmers and wage
laborers ultimately paid the price, as they had to dedicate more of their income towards
purchasing the goods necessary to live. In 1908, William Taft ran on the policy of
reducing tariffs. However, Taft found himself in an unfortunate situation. While the country
as a whole supported the idea of reducing tariffs, Taft, a Republican, saw how the issues
surrounding the call for reduced tariffs and the implementation of a graduated income tax
was beginning to rip the Republican party in two. While Republican senators such as Bob Lafollette
crossed the aisle to side with Democrats over the issues of fair taxation and reduced tariffs,
Taft also had to deal with powerful Republican senators such as Nelson Aldrich who hated
the idea of an income tax and supported high protective tariffs. To help unify and heal the party over this
issue, Aldrich and Taft concocted a plan that would help unify the Republican party while
also satisfying the calls for an income tax by a bipartisan group of Democrat and Republican
senators. Rather than including legislation proposing an income tax within a bill overhauling
tariffs, Taft and Aldrich proposed that Congress vote on a Constitutional Amendment overturning
the Supreme Court decision from 1895 that declared an unapportioned income tax unconstitutional.
Believing that such an amendment would never pass, much less be ratified by the requisite
amount of states, Taft and Aldrich were able to pass a bill reforming tariffs without the
inclusion of a federal income tax. However, Taft and Aldrich’s strategy backfired.
The Amendment passed through Congress with the required 2/3rds majority. Furthermore,
in 1913 Delaware became the 36th state to ratify the 16th amendment and thus enshrining
Congress’ power “to lay and collect taxes on incomes, from whatever source derived,
without apportionment among several States, and without regard to any census or enumeration.” Later that year, President Wilson signed into
law the Revenue Act of 1913, which marked the beginning of the modern federal income
tax. What Taft and Aldrich saw as an impossibility was accomplished in only four short years
and the course of American History was changed in dramatic fashion. As the saying goes, be
careful what you wish for cause you just might get it.

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