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Transcript

You’ve heard the old joke, right?  Every time a proposed simplification of the tax code circulates, so does this:  Have you seen the new tax form?  Just 2 lines.  Line 1, how much money did you make?  Line 2, send it in.  Har.  It’s one of the American rites of spring – spending weeks and months not doing or even thinking about doing your taxes, followed by the mad rush to file. Even as most of us file online, the predictable annual news stories about people parachuting into post offices to get the precious midnight postmark still sprout like tulips on April 15, the date of loathing and doom.

And the centerpiece of all this anxiety is one of the dullest and most mundane of documents, a form – one of over 2,000 forms, schedules and publications in the tax arsenal — so deeply ingrained into the national psyche that the mere mention of its number evokes fear and dread. 

I’m Joe Janes of the University of Washington Information School.  Taxation is ancient.  Duh.  Early accounts are haphazard, ranging from the pharaohs of ancient Egypt who would personally tour the countryside counting cattle and collecting a share, to oddities like taxes on urine in 1^st century Rome, bachelors in 13^th century France, window glass in England, even souls (try getting out of that one) by Peter the Great.  Assessments would be taken in the form of currency but mostly in grain, animals, finished goods and frequently labor, conscripted or enslaved. It feels a bit grandiose to refer to taxes as the “price of civilization” as one tax preparer’s website says – but probably not by all that much.

The earliest American example might have been a New England “faculty tax” imposed in 1646 which vaguely resembled an income tax.  A small disagreement over taxation and representation led to a minor tiff in the 1770s now known as the American Revolution, which understandably resulted in distrust of centralized taxing power, so under Confederation, the Congress had to request funding from the states as needed.  That didn’t work, and thus the Constitution provided congressional taxing authority – about which more shortly.

In the immediate post-revolutionary period, most taxes raised were from customs duties and excise taxes on goods from spirits to sugar to bonds to slaves, proposed and overseen by Alexander Hamilton as secretary of the treasury.  The first proposal for a national tax on income was made during the War of 1812, along with houses, land, and other property; all of these were dropped in 1816 and a high protective tariff imposed to raise revenue.  The first successful implementations of income tax came during the Civil War, after other sets of revenue measures including bonds, higher tariffs, the sale of public lands and so on; President Lincoln established the Internal Revenue Service (“internal” because the revenue is coming from inside the country) in 1862.  The first round was a straight 3 percent on all incomes greater than $800 net of unspecified deductions; in 1862 the progressive income tax was introduced, peaking at 5 percent based on an intent to apply higher rates to higher incomes.  More complexities, provisions, and special circumstances were added in 1864 (rent became deductible, for example), and all such taxes were repealed between 1867 and 1872.

The next serious attempt followed the economic panic of 1893.  A colorful and acrimonious debate featuring William Jennings Bryan among others yielded a 2 percent tax on incomes over $4,000.  This didn’t last long, as it fell afoul of language in the Constitution specifying that taxes had to be “direct” and “uniform.” interpreted as being in proportion to state population, and thus the individual income tax idea was dead.

Well, not for good, as we’re reminded each spring.  Over the next 15 years, discussion and debate continued, and a coalition of progressive Republicans, Democrats, and Populists gave rise to the push for a constitutional amendment to enable what we now know as the individual income tax.  A hardcore Senate majority leader held it back for as long as he could, but once it hit the floor it passed both houses of Congress with ease; ratification started slowly with Alabama first in 1909, then by other largely southern states, picking up steam in 1911, and crossing the finish line in February of 1913. 

What became the Sixteenth Amendment is remarkable not only for its content; if you set aside the trio ratified passed during Reconstruction as a direct result of the Civil War, it was the first constitutional amendment in over a century, and was quickly followed by those establishing direct elections of senators, prohibition, and women’s suffrage. This is arguably the only period of American history where amendments came primarily from the public will rather than technical fiddling around with governmental details.  Inevitably, there are people who argue that income taxes are still illegal because the amendment was never properly ratified.  They say various states passed versions with differences in spelling or punctuation, or that it doesn’t have a repeal clause for whatever reason, or – my favorite – that Ohio wasn’t really a state until 1953 and thus its ratification shouldn’t count. Which should come as something of a surprise to those of you who live there.

Congress wasted little time and a tax bill was passed later in 1913, like most major initiatives the product of compromises, political considerations, involvement of interest groups from business to labor to farmers, covering life insurance, bad debts, shipwrecks, stock dividends, and it understandably caused great stir and cry – for something that initially affected only about 2 percent of the labor force who had to file returns that first year.

As to that first form – it’s three pages long, accompanied by a page of instructions.  Line 1 asks for “gross income,” to be calculated on page 2, line 12; line 2 is “general deductions” from page 3, line 7 and already you feel in familiar territory.  More deductions and exemptions follow, including what’s now the standard deduction, and then a graduated scale from 1 percent on incomes up to $20,000 up to 6 percent on everything over a half million, a top rate that would rise briefly to 77 percent by 1918.  At the very top, right above where it says “INCOME TAX” and the prominent reminder of the penalty for not filing on time, is the number:  Form 1040, so numbered, in a stroke of bureaucratic inevitability, because that was the next number up in IRS forms.  If you believe in omens, 1040 was the year the historical Macbeth kills King Duncan and takes his throne.

Its introduction was a big enough deal that nearly all of page 3 of the New York Times on Jan. 6, 1914, is taken up with a reproduction of the form 1,040 (complete with comma) and reprinting of the instructions.  No form 1039 seems to have survived, though 1041 is the return for estates and trusts.  The original due date of March 1 has been extended twice, based on the complexity and difficulty of filling the thing out; it settled on April 15 in 1954.  In 2018, 154 million returns were filed, 135 million of them electronically.

So yes, it’s a “form.”  The word itself, the Oxford English Dictionary tells us, enters English around 1300 meaning “shape or arrangement of parts” and that’s kind of it.  Filling out (or filling in, hmmm) a form, gives the information on it shape and organization, helps it to be managed or processed.  The use of “form” in the sense of a document with blanks is first cited in Dickens’ Little Dorrit of all things, but the idea goes back to form books of legal documents in 12^th century Britain.  The use of “return” is distantly related to the report of results of English parliamentary elections, and became a statement of income or wealth for tax purposes in the early 19^th century, and of course we “file” them because once upon a time the paper forms went into physical folders and became part of our “files.”

A “form” provides the recipient with what they want and expect to see, in the order they expect to see it, and that regularity and predictability is what keeps the wheels turning, and this is about keeping the wheels turning.  You can’t process that many tax returns, or credit card transactions or insurance claims or college applications without some consistency.  Lincoln’s lawyer’s handwritten “return” for 1863 might be charming, but that just doesn’t scale to tens of millions of us.  The alternative is chaos, huge amounts of labor, and even greater susceptibility to fraud, cheating, and evasion.

Every form you fill out comes from this same motivation and necessity.  This is decidedly not the stuff of myth nor legend; no sagas or epic poems have been composed about tax gatherers, or worse still designers of forms, nor are we dealing here with the deeper mysteries of the human experience, except we kinda are. 

We all appreciate, on some level, that forms and their associated processes and structures are important, are necessary, no matter how seemingly mundane, unpleasant or tedious they might be, in anything more complicated than a village barter economy.  And so here we are:  the “price of civilization” may be in some part taxes and taxation – as well as the means and mechanisms, and forms, needed to keep it running, and keep it all together.