Why 1913 was the worst year in American history
This Chairman’s Report is written by Professor David Kendall. Professor Kendall earned his Ph.D. in economics from North Carolina State University. He is currently a Professor of Economics and Finance at the University of Virginia's College at Wise. He was Dean of the School of Business at St. Edward's University in Austin, Texas and Chief Economist for Empire Funding Corporation, also of Austin. While a senior economist with RTI International, Research Triangle Park, North Carolina, Dr. Kendall led numerous applied economics research projects conducted for FDA, EPA, and USDA.
Here is David’s article that was published on his sub-stack.
In about a month, it will be “Tax Freedom Day” in America. That’s the day of the year the average American has earned enough to pay taxes for the year. One point of view is that until Tax Freedom Day, Americans work as fractional slaves.
I know some readers of that last sentence will disagree. Please forgive my passion; I just finished my annual forced tax return for 2025. Try as I did not to, I cursed like the submarine sailor I was 50 years ago. Fortunately, this year I did not break anything. I got by cheap; I do my own tax return, and I had to pay only $160 to use the #$%! software this year.
Well … why not call mandatory taxation what it is? If someone can force us to turn over every penny of our hard earned income from the first 108 days of the calendar year, as it was in 2023 with Tax Freedom Day falling on April 18, isn’t that something like fractional slavery?
A little history will show us how it’s gone in America so far.
- 1900: Tax Freedom Day fell on January 22, with an effective tax rate of approximately 5.9%. Source
- 1918: The date shifted to February 8, reflecting a tax rate of 10.5%, as taxes increased to pay for war.
- 1933: During the Great Depression, Tax Freedom Day was on March 3, with an average tax rate of 17.0%. Tax Foundation
- 1943: In the midst of World War II, it reached April 4, corresponding to an average tax rate of 25.7%. Tax Foundation
- 1950: The date was March 31, with an average tax rate of 24.6%. Source
- 1981: Tax Freedom Day occurred on April 24, marking the latest date up to that point, with an average tax rate of 30.4%. Source
- 2000: The latest-ever Tax Freedom Day was May 1, with Americans paying 33.0% of their income in taxes. Source
- 2010: The date moved earlier to April 9, with a tax rate of 26.9%. Source
- 2017: Tax Freedom Day was on April 23, with an average tax rate of 30.9%. Source
- 2019: It fell on April 16, with an average tax rate of 29.0%. Source
- 2023: Tax Freedom Day is estimated to have been April 18, but we still don’t know for sure, because the data are a moving target.
We won’t know for a year or so what day Tax Freedom Day turns out to be in 2025. We can hope it will come before mid-April, but hope isn’t that good a strategy.
The year 1913 brought Americans a great evil; it’s called the federal income tax. The steady march of Tax Freedom Day deeper and deeper into the calendar year speaks volumes, as they say, about the expansion of American fractional slavery.
By now, readers have figured out where I stand on the issue of mandatory taxation. Here’s a thought; under what conditions is it right and moral for a small group of people to compel us to do what everyone agrees no individual has the right or authority to do themselves? In my opinion, there are no such conditions, which is why I think mandatory taxation is wrong and immoral.
Everyone agrees that no individual has the right to force others to hand over 25% to 30% of their income each year. Stealing is illegal and immoral; everyone agrees. Before 1913, so was compulsory taxation. Today, forced, mandatory taxation is legal, thanks to the 16th Amendment, but it’s still immoral.
But wait. Isn’t mandatory taxation necessary for a successful and prosperous American society? In a word, no. In fact, the opposite is true. From the founding until 1913, America did just fine; in fact, prospered without it. Roads were built and even paved, lighthouses were constructed, children were educated, and a young America defended itself against foreign aggressors — all without mandatory taxation.
Before ratification of the 16th Amendment in 1913, the federal government had for a brief time imposed income taxes during the American Civil War — at least what took itself to be the federal government, which you may recall was disputed by 11, some say 13, of the 34 states at the time. If you think about it, wars aren’t really particularly likely without imposition of mandatory taxation, or forced military service — remember the draft? — which explains why the first, temporary income taxation in America appeared during the Civil War.
But in 1895, the SCOTUS struck down federal income taxation in Pollock v. Farmers' Loan & Trust Co., ruling it unconstitutional because it was a direct tax on individual income, not apportioned among the states by population, as required by the Constitution.
The 16th Amendment gave Congress constitutional authority to levy an income tax without apportionment to the states based on population, opening the door to America’s mandatory federal income tax, which is to say, “fractional slavery” of the many at the direction of the few, at least from one, moral point of view.
Just months after ratification of the 16th Amendment, Congress passed the Revenue Act of 1913, signed into law by the POTUS, Woodrow Wilson. Only the rich would pay — so they said.
The Revenue Act of 1913 enshrined in America the first permanent federal income tax made possible by the newly ratified 16th Amendment.
Here’s a breakdown of the tax brackets and rates passed by Congress in the Revenue Act of 1913:
INCOME RATE
$0 – $20,000 1%
$20,000 – $50,000 2%
$50,000 – $75,000 3%
$75,000 – $100,000. 4%
$100,000 – $250,000. 5%
$250,000 – $500,000. 6%
Over $500,000. 7%
Single tax payers paid no income tax if they made less than $3,000 per year(about $90,000 in today’s money); for married couples filing jointly, the exemption was $4,000; notice the beginning of the marriage penalty, right from the start. Why was the exemption not $6,000 for married couples? Income below these levels was not taxed. So, only the rich were to be fractionally enslaved. What a relief.
We live in fortunate times. We have an alternative to mandatory taxation. We actually have a bill introduced in Congress every two years since 1999; it’s called H.R 25 The Fair Tax Act. The link below invites you to complete a brief survey about the FairTax. I hope you will click the link, learn the basics about a moral form of taxation, and share the link with your friends and family.
CLICK THIS LINK
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CONCLUSION
Professor Kendall clearly shows that Americans need to be free of the income tax and how the income tax system is eroding our basic freedoms.
As Professor Kendall points out, there is a well-researched replacement plan that is ready to be implemented—The FAIRtax. The FAIRtax is a national retail sales tax on new retail goods and retail services that also does the following:
- Replaces the government revenue now being collected by the income and payroll tax.
- Gives each of us our whole paycheck and lets us decide how much federal tax we pay by how much we spend on new retail goods and retail services.
- Eliminates all federal taxes on income and all federal tax returns for individuals and businesses.
- Provides a family allowance that exempts purchases up to the poverty level from taxation making it a progressive sales tax.
- Is administered by the states and eliminates the need for the IRS.
- Brings jobs and manufacturing back to the U.S.
- Permanently ensures the solvency of Social Security and Medicare.
In President Trump, we have a President who sees that the corrupt and incomprehensible income/payroll tax system must be eliminated if America is once again going to be free and prosperous.
It is imperative, though, that we don’t replace the current income tax and the IRS with an alternative system that can still be manipulated by the Ruling Elite.
We must let Congress and the President know that the best way to replace the income tax and the IRS is with the FAIRtax.
Make no mistake about it. The FAIRtax is a grave threat to the Ruling Elites. It will strip them of their power and their ability to control us though the tax system. Their opposition to the FAIRtax will be fierce and unrelenting. And don’t think for an instant that they won’t use half-truths, deception and downright lies in their desperate attempt to hang on to their power.
However, with the support of this President, we can finally eliminate the income tax and the IRS!!!
Of course, the best course of action is to not only repeal the income tax and abolish the IRS but to repeal the 16th Amendment as well so no future administration can ever shackle the American people with an income tax again.
We must come together and ensure that real tax reform, the FAIRtax, is not subverted by the Elites in D.C.
This will take the diligent efforts of all of us. We need your financial assistance, and we need your grass roots assistance.
If you have contacts that will allow us to get more information to President Trump about the FAIRtax please let us know.
Please email us at info@fairtax.org and we will give you some options on how you can best help us.
At a minimum, please call your Congressional representative and ask if he or she supports the FAIRtax. If so, thank him/her for their support and suggest they become a cosponsor of HR-25 if they’re not one already. If not, ask why not. If your representative claims to be unfamiliar with the FAIRtax, offer to have someone come to their office and explain it to them.
Please go to this link to invest in AFFT and help us pass the FAIRtax. It’s an investment in your and your family’s future.
THE SOLUTION—PASS THE FAIRTAX!
Why would D.C. pass the FAIRtax and give up this almost unlimited source of donations? The only way that they will is if the rest of us demand it!
Isn’t it time to end this ludicrous tax collection system and the IRS?
HELP BRING ABOUT REAL TAX REFORM AND STOP FUTURE IRS ABUSES
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Please go to this link to invest in AFFT and help us pass the FAIRtax. It’s an investment in your and your family’s future.