American Minute - Jun. 9 - "Pay-as-you-go" tax

American Minute
with Bill Federer

Withholding taxes from people's paychecks began JUNE 9, 1943. Congress passed it as an emergency measure to get money to fight Hitler.

The idea came from Beardsley Ruml, treasurer of Macy's and chairman of New York's Federal Reserve Bank.

Called the "pay-as-you-go" tax, so much money came in with so few complaints that it continued after the war.

John F. Kennedy told Congress, April 20, 1961:

"Introduced during the war when the income tax was extended to millions of new taxpayers, the wage-withholding system has been one of the most important and successful advances in our tax system in recent times.

Initial difficulties were quickly overcome, and the new system helped the taxpayer no less than the tax collector."

But Americans weren't always so taxed.

In his 2nd Annual Message, 1802, Thomas Jefferson wrote:

"To proceed as we have begun in substituting economy for taxation."

In his Message to Congress, May 27, 1830, Andrew Jackson said:

"Through the favor of an overruling and indulgent Providence our country is blessed with general prosperity and our citizens exempted from the pressure of taxation, which other less favored portions of the human family are obliged to bear."