No Closing Time for Income Taxes
By DANIEL OKRENT
NYT
ON March 19, 1928, eight years into the reign of constitutional Prohibition, Pierre S. du Pont wrote a letter to William P. Smith, one of the very few people he ever addressed by first name. Du Pont was among the wealthiest men in the world, chairman of both his family’s chemical colossus and the du Pont-controlled General Motors Corporation. Smith worked for a less well-known enterprise that Pierre du Pont also dominated: the Association Against the Prohibition Amendment.
“The object of the organization,” du Pont told his friend Bill, “is not merely the return of the use of alcoholic beverages in the United States.” He went on, “Another important factor is the tremendous loss of revenue to our government through the Prohibition laws” — the revenue once collected through taxes on liquor and beer. With the end of Prohibition, he wrote, “the revenue of the government would be increased sufficiently to warrant the abolition of the income tax and corporation tax.”
For today’s advocates of legalized, taxable marijuana — or new levies on, say, electricity use, baseball tickets or high-fructose corn syrup — it’s an appealing model. Some even believe that a tax on marijuana, which could be legalized by California voters this November, could lead to a reduction in the state’s income taxes. But the history of the intimate relationship between drinking and taxing suggests otherwise.
The link between the two is as old as the Republic; Alexander Hamilton provoked the Whiskey Rebellion when he persuaded Congress in 1791 to enact the first federal tax on liquor to help pay down the national debt. By 1910, as anti-alcohol forces were making a significant impact on American politics, the federal government was annually drawing more than 70 percent of its domestic revenue from the bottle and the keg. In those years before the advent of the income tax, only the tariff on foreign goods and materials provided a larger share.
(More here.)
NYT
ON March 19, 1928, eight years into the reign of constitutional Prohibition, Pierre S. du Pont wrote a letter to William P. Smith, one of the very few people he ever addressed by first name. Du Pont was among the wealthiest men in the world, chairman of both his family’s chemical colossus and the du Pont-controlled General Motors Corporation. Smith worked for a less well-known enterprise that Pierre du Pont also dominated: the Association Against the Prohibition Amendment.
“The object of the organization,” du Pont told his friend Bill, “is not merely the return of the use of alcoholic beverages in the United States.” He went on, “Another important factor is the tremendous loss of revenue to our government through the Prohibition laws” — the revenue once collected through taxes on liquor and beer. With the end of Prohibition, he wrote, “the revenue of the government would be increased sufficiently to warrant the abolition of the income tax and corporation tax.”
For today’s advocates of legalized, taxable marijuana — or new levies on, say, electricity use, baseball tickets or high-fructose corn syrup — it’s an appealing model. Some even believe that a tax on marijuana, which could be legalized by California voters this November, could lead to a reduction in the state’s income taxes. But the history of the intimate relationship between drinking and taxing suggests otherwise.
The link between the two is as old as the Republic; Alexander Hamilton provoked the Whiskey Rebellion when he persuaded Congress in 1791 to enact the first federal tax on liquor to help pay down the national debt. By 1910, as anti-alcohol forces were making a significant impact on American politics, the federal government was annually drawing more than 70 percent of its domestic revenue from the bottle and the keg. In those years before the advent of the income tax, only the tariff on foreign goods and materials provided a larger share.
(More here.)
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