The Progressive Income Tax

Since today being tax day, I would like to share a Prager University video about the Progressive Income Tax:

Dick Morris did a video about how prohibition caused the income tax.

President Lincoln created the first progressive income tax during the Civil War. The Revenue Act of 1862 was created to fund the war. The two-tier system highest tax rate was 5% (which the Left now days calls too low). If you made less than $600 you were exempted from the tax. According to Wikipedia, the tax didn’t fulfill its purpose. Most progressive taxes don’t.

It’s kind of a shame Lincoln had to create such a tax system because the progressive tax system (especially a heavy progressive tax system) is a Marxist idea. Although, he wasn’t the first person to reference it. The early Romans had progressive income tax. The tax rate under normal circumstances was 1% of property value, and could sometimes climb as high as 3% in situations such as war.

If America had a flat tax rate with no income exemptions then Congress would be less likely to raise it and keep the tax rate low otherwise they would be sticking it to the poor and not just the rich. Then again that would make the poor keep more of their own money (as well as every other tax payer). This would mean that the poor could someday become independent from the progressive politicians and not keep them in power. We can’t have that can we?

Talking about low tax rates here an interesting and informative video about the Laffer Curve.