Income Tax Time

It’s income tax preparation time of year, when all thoughts turn to Prohibition. Huh?  

We have Prohibition to thank for the existence of income taxes. Sounds ridiculous, right? It isn’t. Prohibition could not have happened without the creation of the income tax in 1913. The passage of the 16th Amendment in 1913 gave the government a source of revenue it didn’t have before, revenue that could take the place of the tax monies raised from the sale of alcohol. Before 1913, Congress couldn’t afford to prohibit liquor because liquor was a main source of revenue. That’s why T-totalers, religious people, and others were willing (and eager) to support the creation of a new income tax–because they knew national prohibition of alcohol was not going to happen otherwise. 

Of course, when Prohibition proved a failure and was abandoned, no one in Congress proposed doing away with the income tax and returning to the days when alcohol taxes supported government functions. No, as always, the money was too alluring to give up. 

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Published in: on April 14, 2012 at 7:08 am  Leave a Comment  
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