Larry Zelenak: The Federal Retail Sales Tax That Wasnt: An Actual History and an Alternate History

Law & Contemporary Problems Conference 2009:
Turning Points in the History of the Federal Income Tax November 6, 2009

The federal income tax did not become a mass tax until World War II. Although some form of mass federal taxation was imperative for the financing of the war, a mass income tax was not inevitable. But for the determined opposition of the Roosevelt administration, Congress would almost certainly have enacted a federal retail sales tax during the warperhaps in addition to the conversion of the income tax to a mass tax, but perhaps as the only form of mass taxation aimed at paying for the war. This article describes the wartime debates among proponents of different methods of federal mass taxationconversion of the income tax to a mass tax, enactment of a federal retail sales tax, or both. Following that description, the article considers the continuing impact of the wartime choice of the income tax as the only instrument of mass taxation.