Tax Day 1991

Fourth of July, Thanksgiving, Memorial Day, Presidents' Day, Martin Luther King's Birthday, Election Day -- these are quintessential American celebrations that march by with the regularity of circling planets. But there is one day, above all others, that involves, affects, angers, frustrates and intimidates citizens more than any other. And that day is today, April 15, with its midnight deadline for the filing of personal income tax returns.

During the first 124 years of the republic's existence, Americans did not have to tolerate such direct federal intervention into their personnel finances. The government raised money mostly through tariffs and import fees.


Although federal banking and currency policies ignited controversy during the early decades, it was the Sixteenth Amendment, adopted in 1913, which changed the basic relationship between government and citizen. It gave government the power to know each citizen's income, how he spent it and to what degree it should be taxed -- always with the threat of civil or criminal penalty.

The earliest tax rates were modest -- about 1 percent for the average citizen, up to 4 percent for the affluent. But as Washington learned how rich a vein it had tapped, rates rose and federal activities expanded. During the New Deal, a payroll tax more regressive than the income tax was launched to finance Social Security and, later, Medicare.


The high-water mark for income tax rates was 92 percent in 1962, a punitive rate that so discouraged savings Congress started to pass preferential rates to spur investment. Then began a downward trend, especially in the Reagan era, until today's 15 percent and 31 percent brackets evolved.

Reforms in 1986 removed millions of poor and near-poor from the tax roles but failed to simplify the system or to keep President Bush from meddling with the principle of taxing all income alike. As part of last year's budget agreement, a slight break was approved for gains on the sale of long-held capital assets but, otherwise, the 1986 reforms still hold.

Is the tax system fair or efficient? Does it raise enough money or too much? Does it infringe on citizens' rights or give government sufficient authority? These are perennial questions that should be re-examined each April 15. There is, of course, the IRS and the withholding mechanism to enforce tax laws. But citizens are partners in a system that could not work without voluntary compliance.

That Americans are the most law-abiding taxpayers on Earth is undeniable. This says as much about commitment to the common good and love of country as all the fireworks and flag-waving we witness every Fourth of July.