All 44 Presidents of the United States, from 1789 to 2011, have had to struggle with creating or raising taxes. Building the country, funding wars, fighting inflation and providing for citizens are just some reasons presidents raise taxes. Each president has to balance raising taxes with reducing or eliminating taxes established by his predecessors. Some presidents have made significant contributions to the structure of the tax system itself.
In 1789, George Washington became the first U.S. president, enforcing tax law based on the Federalist Papers published in 1787 and 1788, which established the federal government's power to collect tax. In his 1796 farewell speech, Washington said, "bear in mind that towards the payment of debts there must be revenue; that to have revenue there must be taxes; that no taxes can be devised which are not more or less inconvenient and unpleasant." Co-author of the Federalist Papers, James Madison, once said, "The power of taxing people and their property is essential to the very existence of government.'' Madison became president in 1809.
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Lincoln to Roosevelt
Abraham Lincoln created the first income tax to fund the Civil War. Grover Cleveland enacted another federal income tax on citizens in 1894, but the Supreme Court repealed it in 1895. In 1913, Woodrow Wilson and Congress ratified the 16th Amendment of the Constitution giving Congress the power to collect federal income taxes as part of the Federal Reserve Act. Theodore Roosevelt supported taxing the rich and initiated the estate tax. Franklin Delano Roosevelt increased taxes on the wealthy and created the Social Security Tax in 1935. Income taxes helped America pay for involvement in World War I and II.
Kennedy to Ford
John F. Kennedy — the first president to personally visit the IRS — created a tax reform policy that, according to a Slate magazine article, "reduced tax withholding rates, initiated a new standard deduction and boosted the top deduction for child care expenses, among other provisions." In 1964, Lyndon Johnson signed Kennedy's tax reform into law. Rising inflation led to Richard Nixon's attempt to raise taxes after his election in 1968, but Congress rejected his plan. Elected in 1974, Gerald Ford put forth his "Whip Inflation Now" plan to raise taxes, which Congress also originally rejected.
Carter to Clinton
Aiming to stop inflation and balance the budget, Jimmy Carter raised taxes. Ronald Reagan raised taxes in 1982 with the Tax Equity and Fiscal Responsibility Act. George H.W. Bush famously said, "read my lips, no new taxes," but did raise taxes with the Omnibus Budget Reconciliation Act of 1990. Bill Clinton raised taxes under the Omnibus Budget Reconciliation Act of 1993, which helped to finally balance the federal budget for the first time since 1969.
Bush and Obama
George W. Bush cut taxes with the Economic Growth and Tax Relief Reconciliation Act in 2001 and the Jobs and Growth Tax Relief Reconciliation Act in 2003. These "Bush tax cuts" reduced taxes for married couples with children, small businesses, investors, retirees and the four highest income tax brackets. As of February 2011, Barack Obama extended the Bush tax cuts, but raised taxes on health care insurance, cigarettes and tanning salons, according to Ezra Klein of the Washington Post.
- TaxAnalysts.com; Tax History Project; The Power to Tax and the Federalist Papers
- University of Virginia Miller Center of Public Affairs; Presidents and Tax Policies: The Politics of Persuasion; 2010
- The Pew Charitable Trusts: The Fiscal Effects of Extending the 2001 and 2003 Tax Cuts
- The Washington Post; The Obama Administration Has Raised Some Taxes and Cut Many Others. They Should Admit That.; Ezra Klein; February 2011
- IRS.gov; Brief History of IRS; March 2011
- The Library of Congress, American Memory; Today in History: April 15; Tax Day
- Yale Law School; The Avalon Project; Washington’s Farewell Address 1796; 2008
- Slate; Tax Cuts in Camelot?; David Greenberg; January 2004
- IRS: Tax Quotes