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Before I went to bed last night, I double-checked my alarm and then set another one. My son was at a sleepover and had a soccer game an hour away first thing in the morning. It’s a challenge at the best of times to coordinate schedules but especially today: Time sprung ahead in some parts of the world, ours included, for Daylight Saving Time (DST).

Before 1966, laws setting dates for DST were somewhat fluid. The United States officially adopted DST during World War I—after Germany did so—but the unpopular law was soon removed. It continued to be observed sporadically in some states until World War II when President Franklin D. Roosevelt again signed temporary DST into law. As before, the law didn’t continue after the war.

That changed in 1966 when President Lyndon Johnson signed a bill into law calling for DST to begin on the last Sunday of April and end on the last Sunday of October each year. The dates were tweaked again, 20 years later, under Ronald Reagan, who amended DST to begin at 2 a.m. on the first Sunday of April and end at 2 a.m. on the last Sunday of October. Just about 20 years later, President Bush signed the Energy Policy Act of 2005 (downloads as a pdf) which had as its short title, “To ensure jobs for our future with secure, affordable, and reliable energy.” In addition to a number of tax breaks, the law also extended DST by four weeks—that’s why we “fall back” in November now instead of October.

The beginnings of DST are sometimes credited to Benjamin Franklin. The idea appeared in his 1784 essay, “An Economical Project,” though many are quick to point out that it was considered to be satire. In the essay, Franklin calculates the hours spent burning candles and declared:

An immense sum! that the city of Paris might save every year, by the economy of using sunshine instead of candles.

Whether Franklin actually inspired DST in the U.S. may be a matter of debate, but it’s clear that the underlying concept is what drives DST today. It’s all about energy policy and money. That’s contrary to popular opinion, which suggests DST was adopted in America in order to accommodate farmers. In fact, according to Tufts University professor Michael Downing, “That’s the complete inverse of what’s true. The farmers were the only organized lobby against daylight saving in the history of the country.” Why? Among other reasons, it left them with an hour less sunlight to get crops to market.

Instead, the DST has been linked to energy policy and saving money, often accompanied by tax changes. The Energy Policy Act of 2005—the one that extended the DST—was no exception. The Act took several years to nail down, largely because of a controversy over whether energy policy should favor fossil fuels or solar and wind power. The resulting energy policy incentives were to be implemented through a mishmash of new rules and tax credits.

One popular tax credit in the 2005 Act was for fuel-efficient vehicles (conventional hybrid vehicles). The credit, which allowed tax breaks on qualifying vehicles, expired in 2010. Tax credits for alternative vehicles still exist, including a credit for qualified two-wheel plug-in electric vehicles that was extended through 2017 as part of the former extenders package. The credit was not extended for the 2018 tax year. However, if you acquired a qualifying vehicle in 2017 but placed it in service in 2018, you may still be able to take advantage of the credit for the 2018 tax year; see the instructions for form 8936, Qualified Plug-in Electric Drive Motor Vehicle Credit (Including Qualified Two-Wheeled Plug-in Electric Vehicles), for more information.

The 2005 Act also put forward a federal tax credit for residential energy efficient property. Initially, the credit included qualified solar electric systems; qualified solar water heaters; qualified fuel cell property; qualified small wind energy property; and qualified geothermal heat pumps. Some of that credit expired after 2016, but the credit for solar electric property and solar water heating property was extended through December 31, 2021 (with a gradual step-down).

Energy efficiency improvements to residential homes, including the purchase of certain doors, windows, insulation and the like, were also part of the 2005 Act. Initially, homeowners who made qualifying improvements were generally entitled to a tax credit equal to 10% of the costs, up to a lifetime limit of $500. The credit expired at the end of 2016. However, a tax credit for certain qualifying purchases made in 2017 was re-upped retroactively as part of the 2018 Tax Extenders Agreement; the credits were not extended after January 1, 2018.

Energy-related tax credits, including those for nonbusiness energy property; two-wheeled plug-in electric vehicles and energy-efficient homes, were included in the Tax Extender and Disaster Relief Act of 2019 (you can find it here as a PDF) introduced by Senate finance chairman Chuck Grassley (R-IA) and Senator Ron Wyden (D-OR) earlier this year. That bill was read for a second time in the Senate but has not advanced.

Tax credits often “sweeten the deal” for other policy initiatives, which is likely why the DST was extended as part of the 2005 Act. The idea behind the extension was that, by extending daylight hours, we would also cut energy consumption. If the day seems longer because it’s light out longer, it should follow that there would be less demand for electricity in the evenings. But that may not be true: It may actually cost us money.

While studies indicate a slight change in demand in the evenings, some studies have indicated that any savings are offset by more energy demand in the morning. And you can’t count out the time spent changing clocks. In 2010, Utah State University economist William F. Shughart II suggested that turning the clocks forward and backward each year results in $1.7 billion of lost opportunity cost each year in the U.S. alone. His calculations assumed that each person over the age of 18 spent about 10 minutes changing clocks instead of doing something more productive. Of course, in a digital-centric world, that number should go down. Should. But as I try to figure out which clocks inside my home actually have the right time, I’m not so sure that’s the case.

Many Americans don’t see the benefit of DST: Just 36% of those polled find it necessary. In 2013, nearly 20% of those polled believed wrongly that you’d move the clocks backward on Sunday for DST (spring ahead, folks) or aren’t quite sure what to do at all. As a result, a whopping 16% of Americans claim DST has made them early or late for an appointment because they didn’t set their clocks the right way (I feel your pain, America).

And it may even cost us hard cash. According to a study by JPMorgan Chase, there is a drop in economic activity when clocks move back (you can read the study here as a PDF).

It’s even more confusing because not everyone in the U.S. observes DST. Hawaii and Arizona (except for residents of the Navajo Nation) do not, nor do American Samoa, Guam, Puerto Rico, the Virgin Islands and the Northern Mariana Islands. Last year, a Florida bill to nix DST, the Sunshine Protection Act, passed (33-2) and was approved by the governor. The problem? By federal law, the state still requires approval from the feds. To end the confusion, three Florida legislators (Senators Marco Rubio and Rick Scott and Representative Vern Buchanan) have reintroduced a federal law, also called the Sunshine Protection Act, to make DST permanent all year. If passed, the legislation would apply to states that participate in DST, which most states observe for eight months out of the year; last year, the bill failed to advance out of committee.

For now, DST is an annual annoyance: It’s always the second Sunday in March. So that means I’ll see you back here next year around the same time—assuming I finally get all of those clocks set.

“Read my lips: no new taxes.” Those few words, uttered by then-American presidential candidate George H. W. Bush at the 1988 Republican National Convention on August 18, became a hallmark of Bush’s presidency. When taxes did go up – a move made by Congress – voters were angry and blamed the President. But how much influence do most U.S. Presidents have over taxes? On Presidents Day, here’s the scoop on the President, tax policy and how the two often intersect.

The power to tax is found in the U.S. Constitution. The word tax appears at least ten times in the Constitution, but we typically focus on Article I, Section 8, Clause 1, the so-called “Tax and Spend Clause.” It begins:

The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

And the explanation for how that begins is laid out in Article 1 in Section 7, Clause 1:

All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.

Every bill which shall have passed the House of Representatives and the Senate, shall, before it become a law, be presented to the President of the United States…

In other words, the President isn’t tasked with drafting tax legislation – that’s Congress’ job. The President signs the bill into law. So why do we assume that the President drives tax policy?

One, the President is typically surrounded by a group of advisors with some expertise in economic and tax policy who advise on these issues. That leads taxpayers to believe that the President will offer a measure of tax advice to Congress. And two, the President may set the tone for tax policy with the submission of the federal budget request (we’re assuming, of course, that spending should have some relationship to revenue).

In recent years, however, Presidents have become more aggressive in taking the lead on tax policy. According to Mark Luscombe, a Principal Analyst for Wolters Kluwer Tax & Accounting, Presidents have made tax policy proposals a significant portion of their campaign platforms, and when elected, have frequently worked to obtain passage of those proposals relatively quickly. 

“Congress,” he says, “especially when controlled by the same party as the new president, seem most willing to work to enact those tax proposals early in the new presidency during the “post-election honeymoon” and before mid-term elections two years later.”

That allows presidents a great deal of leeway to shape tax policy. Of all of the presidents, Luscombe, a key member of the Wolters Tax Legislation team that tracks, reports and analyzes tax legislation before Congress, believes that President Ronald Reagan had the most significant influence, “especially given the number of significant pieces of tax legislation enacted during his presidency.”

According to Luscombe, Reagan started off his first year in 1981 with very large tax cuts – the very ones he had campaigned on. However, he subsequently worked with a Democratic House in 1982 and 1984 to increase taxes to counter the deficit. In 1986, Luscombe says, Reagan again worked with a Democratic House again to enact fundamental tax reform legislation.

(You can read more about Reagan and his tax policy here)

That tax reform legislation remains in place today. In fact, the changes under the Reagan Tax Reform Act were so dramatic that the Tax Code was renamed the Internal Revenue Code of 1986. Despite additions, deletions, and modifications to the Code, you’ll still see it written that way today: it’s the Internal Revenue Code of 1986, as amended.

The 1986 reform under Reagan is widely considered the most significant tax reform legislation in history. Since that time, most tax policy – including the most recent tax reform – has been short-term. Today, it’s not uncommon for changes to our tax laws, including the lowering of tax rates, remain in place for only a few years before they sunset (meaning they go back to the way that they were before). In other words, tax policy now feels tied to a particular presidency, which means that tax policy can change from administration to administration.

Is that a good thing? Luscombe says that it is probably good to review tax policy at least every four years to see if goals are being achieved. Tax policy, he explains, has come to mean not only raising needed revenue but also working to achieve various societal goals through tax policy as well. 

That was clear, for example, during World War II. Tax rates hit levels as high as 94% to help fund the war. Luscombe notes that those rates “stuck around at similar levels until 1963, probably due to the continuing Cold War after World War II.” In fact, he points out, the top tax rates didn’t dip below 91% until 1963 and not below 70% until 1981.

You can see some other tax policy changes, courtesy of Wolters Kluwer Tax & Accounting, a leading provider of tax law information to business professionals, in this infographic.

But while regular review is good, regular, temporary changes are not necessarily desirable. “What is probably not good tax policy,” he says, “is to have so many temporary provisions and phase-ins and phase-outs in the tax code.” Tax legislation now revolves too much around ten-year budget projections that make long-term planning difficult and actually tends to frustrate some of the goals that the legislation is seeking to promote.

Ten years isn’t just a random figure. Under the Byrd rule, named after former West Virginia Senator Robert Byrd, any legislation that would significantly increase the federal deficit beyond the ten-year budget window (or is otherwise “extraneous”) can be blocked. The result is that instead of a simple majority to push it through Congress, any such legislation would need 60 votes. When Congress can’t agree beyond a simple majority on tax policy, for example, they necessarily must frame it to only last for a few years. With respect to the last tax reform efforts, the current provisions which were effective in 2018 will expire after 2025.

(You can read more about the Byrd rule and our most recent tax reform here.)

So what does that mean for the future? Luscombe doesn’t have a crystal ball and of course, can’t predict the future, but suggests that with the current split government, “it is possible Congress may not be quick to make permanent the temporary provisions of the Tax Cuts and Jobs Act enacted in 2017.” In other words, don’t count on those tax cuts being made permanent. 

As a country, we’ve grown used to the idea that our leaders could be investigated by authorities for allegations ranging from perjury to collusion. Politicians on both sides of the aisle are quick to throw out the words “witch hunt” to describe and discount the idea that they might have been engaged in wrong-doing. Witch hunt or not, it happens so often that we’ve almost grown dismissive of headlines that any of our leaders could be under investigation.

More than 50 years ago, however, Dr. Martin Luther King, Jr., a leader in the civil rights movement, was on the receiving end of repeated harassment by tax authorities. Inquiries into Dr. King’s finances were not new: He was investigated in two separate states (Georgia and Alabama) on numerous occasions and together with his legal team and members of the Southern Christian Leadership Council (SCLC), Dr. King was repeatedly investigated by the Internal Revenue Service (IRS).

It was clear to many of his supporters that Dr. King was targeted because of the color of his skin and the words that he dared to speak about inequality. In 1960, he made news as the first person ever criminally charged in the state of Alabama on tax fraud (you can read the statement issued “Committee to Defend Martin Luther King, Jr.” accusing the state of Alabama of falsely distorting Dr. King’s 1958 income tax return in an attempt to indict him here).

After his indictment, Dr. King was asked by a reporter, “Have your income tax returns been investigated before?”

He replied, “Oh yes, they have been investigated two or three times before. This is nothing new.”

(You can see the interview with Dr. King on this WSB-TV news film clip.) The case would eventually go to trial. The outcome was surprising.

On today, Martin Luther King Jr. Day, as I always do, I am reposting an article that I wrote years ago about that trial and the legal profession. You might have seen it before: it remains one of my favorite posts to this day. Enjoy!


I’ll be frank. I don’t always love being a lawyer.

When I was a little girl, I used to watch Perry Mason with my grandfather on TBS. That constituted my entire legal experience before entering law school. And it was flawed.

You see, on TV, none of the lawyers lied to Perry Mason over the phone about being amenable to a continuance and then told the Clerk of Court differently. Nobody faxed Perry Mason a witness list the day before a hearing along with evidence that they “forgot” to send prior. A lawyer didn’t claim proper service on Perry Mason and then fail to deliver the notices to his law offices. You never saw a lawyer represent clients who had sent Perry Mason death threats via email in an attempt to assert that Mr. Mason was the one being unreasonable. You didn’t see cases drag on for years and years (yes, plural) because counsel just couldn’t get it together enough to resolve the matter. On TV, no matter how dire, how dramatic, there was ultimately justice.

The law is supposed to be about justice, about finding the truth. And increasingly it feels like it’s not. It’s more about touting your wares, putting yourself on commercials during daytime television standing in front of legal books shouting about maximizing money, about doing anything to get paid. And that is sad.

A few months ago, I attended a hearing that made me question my role in the law. You’re probably assuming that the hearing somehow didn’t go well. That isn’t true. It went remarkably well. Our client was an excellent witness. The judge was fair and very accommodating. We walked out of the hearing knowing that we had done a good job. The thing was, I felt relieved that it was over. I was happy for my clients. But I wasn’t happy for me. Truth be told, I hated every minute of preparing for the case. Well, not every minute. The theory, the strategy? That I didn’t mind. Our strategy was simply to tell our story. And we somehow felt that should be enough. In the end, I think it was.

But the getting there? The games? The complete lack of professionalism exhibited by opposing counsel? Lying about continuances? Surprise witnesses? Last minute evidence? Maybe that seems exciting on TV, but in real life, it’s not exciting. It’s sickening. It’s stressful. It’s not fair to good lawyers who spend their time crafting a case. It’s not fair to clients who don’t know what to expect in the courtroom. And yet somehow, month after month, this behavior doesn’t seem so unusual.

And as opposing counsel sat in her chair in her too tight blouse with the clickety-click of her little heels on the floor, the same counsel who called my clients’ claims frivolous, the same counsel whose supervising partner at Big Law Firm once commented to me that she didn’t understand why a small firm like mine would go up against a big firm like hers, I thought about why we were all at that place, how it all happened that we were in the same room believing two different versions of the truth. I couldn’t explain it.

Later that same day, while reaching for my Moscow Mule (yes, my favorite cocktail du jour, even before Rachael Ray put it in her magazine last month – grr) at the Union League, I understood why the partner at my former firm kept a bottle of wine in his desk: the pressure of being a lawyer, the pressure of having to win, it’s a lot to take in. And while other professions can often look to each other for reassurance, we don’t really have that in the legal profession with few exceptions. It is, by its very nature, adversarial. It is competitive. It is cutthroat. And me? I am not. Of course, I like to win. I like to think that I am good at it. And then maybe I think that’s not something to be particularly proud of.

So, over the past few weeks, which have been professionally difficult, I have tried to remember why it is exactly that I became a lawyer – and what about it I used to love. And I was reminded of my favorite scene in the movie Philadelphia. The one where Andrew Beckett sums up what’s actually good about the law:

Joe Miller: What do you love about the law, Andrew?
Andrew Beckett: I… many things… uh… uh… What I love the most about the law?
Joe Miller: Yeah.
Andrew Beckett: It’s that every now and again – not often, but occasionally – you get to be a part of justice being done. That really is quite a thrill when that happens.

And so I tried to think of when that happened last – when justice was actually done. Not when I won a case or when I got a client out of trouble – that happens often enough. But remember, winning and justice aren’t the same thing. I had to think for a while.

Later, I was preparing to write a post about Martin Luther King, Jr. Day. I figured I’d just put up a copy of his famous “I Have A Dream” speech and call it a day. But as I researched, I found part of his autobiography which, I will confess, I had never read in full. And I saw something interesting: I knew that Dr. King had been arrested several times for various accusations, but I didn’t realize that he had been on trial for tax evasion.

Yep. On February 17, 1960, a warrant was issued for the arrest of civil rights leader Dr. Martin Luther King Jr. on charges of tax evasion. He was accused of allegedly falsifying his Alabama income tax returns for the years 1956 and 1958; he was the only person ever prosecuted under the state’s income tax perjury statute. It seemed like an inevitable victory for the government.

In his autobiography, Dr. King described the trial like this:

This case was tried before an all-white Southern jury. All of the State’s witnesses were white. The judge and the prosecutor were white. The courtroom was segregated. Passions were inflamed. Feelings ran high. The press and other communications media were hostile. Defeat seemed certain, and we in the freedom struggle braced ourselves for the inevitable. There were two men among us who persevered with the conviction that it was possible, in this context, to marshal facts and law and thus win vindication. These men were our lawyers-Negro lawyers from the North: William Ming of Chicago and Hubert Delaney from New York.

And something quite remarkable happened. On May 28, 1960, only after a few hours, Dr. King was acquitted by an all-white jury in Montgomery, Alabama (statement downloads as a PDF).

Dr. King said about his trial:

I am frank to confess that on this occasion I learned that truth and conviction in the hands of a skillful advocate could make what started out as a bigoted, prejudiced jury, choose the path of justice. I cannot help but wish in my heart that the same kind of skill and devotion which Bill Ming and Hubert Delaney accorded to me could be available to thousands of civil rights workers, to thousands of ordinary Negroes, who are every day facing prejudiced courtrooms.

And it dawned on me: no matter how many slick-haired, silver-tongued attorneys do their best to make a quick buck at the expense of the reputation of the profession, you can’t dispute that justice is attainable. And justice is good. And justice is important. And even if it is infrequent, it’s worth it when it happens.

As voters head to the polls to cast ballots in local, state and federal elections, questions linger. It’s been an ugly political season. Allegations of voter fraud, voter tampering, and voter suppression have been in constant circulation and might make you think that our voting system is irretrievably broken. The truth is that voting in America has never been without controversy – going all the way back to the poll tax.

A poll tax is generally considered a fee paid for the right to vote. And while the poll tax is most often associated with suppressing the African American vote during the 1960s, those in power required voters to pay poll taxes long before that time. For example, colonists paid poll taxes just before the American Revolution – part of that whole taxation without representation bit that kept Americans unhappy.

Poll taxes in the colonies, and subsequently in the states, weren’t always linked directly to voting. Instead, they were per person taxes. The word poll came from Low German meaning “head” and was extended to mean individual. By the 1690s, the phrase “poll tax” translated to “head tax” and was considered in a number of countries. The idea was that everyone should pay some tax, even those who didn’t make enough money or own enough assets to be subjected to income and property taxes. If everyone paid tax, the result was more revenue for the government.

In 1870, Congress passed the 15th Amendment which declared citizens should be allowed to vote without regard to race, color or prior history of slavery, stating:

The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any state on account of race, color, or previous condition of servitude.

(By citizens, they meant men. Women didn’t win the vote in the United States until 1920.)

The amendment didn’t sit well with many in power, especially those in southern states. In an effort to suppress the vote, eleven states in the south, including Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Texas, and Virginia, imposed a form of poll tax on its residents.

(It should be noted, however, that poll taxes weren’t restricted to the south, as my state of Pennsylvania had one in place until 1933.)

Administration of the tax varied from state to state but generally required residents to pay the tax to register to vote or provide proof of payment of the tax to vote. Failure to provide a receipt or other proof of payment meant that you could not vote. In some states, poll taxes had to be paid for a few years before you could be eligible to vote. In Alabama, the poll tax was cumulative; a law requiring men to pay all that was due from the age of twenty-one was written into the 1901 state constitution. In Georgia, the 1926 Code stipulated that a resident “shall have paid all taxes which may have been required of him” since 1877.

Residents charged that the rules were not enforced uniformly. Typically election officers had the discretion to demand that a voter produce a poll tax receipt. To make it more difficult or intimidating, laws often stipulated that poll taxes be paid only in cash and at specific locations, like the local police station.

The efforts to keep voters of color home paid off. In the state of Mississippi, fewer than 9,000 of the 147,000 voting-age African Americans were registered to vote after 1890. In Louisiana, where more than 130,000 black voters had been registered in 1896, the number plummeted to 1,342 by 1904.

While some tried to justify the poll tax, claiming that it was simply a revenue raiser, others were more plain-spoken. An editorial in the Tuscaloosa (Alabama) News boldly declared:

This newspaper believes in white supremacy, and it believes that the poll tax is one of the essentials for the preservation of white supremacy.

The question of whether the poll tax was constitutional predictably landed in court. In 1937, in Breedlove v. Suttles, 302 U.S. 277 (1937), the United States Supreme Court ruled that the state of Georgia could impose a poll tax since “It was not the purpose of the Nineteenth Amendment to limit the taxing power of the State.” Further, the court explained that states were entitled to make their own laws, writing, “The payment of poll taxes as a prerequisite to voting is a familiar and reasonable regulation long enforced in many states and for more than a century in Georgia.”

In 1951, a similar case was heard in federal court. Unlike the plaintiff in Breedlove who was a white man, the plaintiff in Butler v. Thompson, 97 F. Supp. 17 (E.D. Va. 1951), was an African-American woman who “alleged that, apart from the payment of her poll taxes” she was “in every way qualified to register under the Virginia law as a voter.” The courts again took the position that states were entitled to make their own laws, finding that “it is well settled that a law that is fair on its face and is also fairly administered is not rendered invalid by the evil motives of its draftsmen.” The plaintiff’s case was dismissed.

However, times were changing. Even as poll taxes were confirmed in the courts, they were losing popularity. By 1962, just five southern states had poll taxes on the books: Alabama, Arkansas, Mississippi, Texas, and Virginia. That same year, the House passed the 24th Amendment, outlawing the poll tax as a voting requirement in federal elections by a vote of 295 to 86. The Amendment did not become part of the Constitution, however, until 1964 when South Dakota ratified it. Today, eight states have still not ratified the amendment.

The 24th Amendment states:

The right of citizens of the United States to vote in any primary or other election for President or Vice President, for electors for President or Vice President, or for Senator or Representative in Congress, shall not be denied or abridged by the United States or any state by reason of failure to pay any poll tax or other tax.

President Lyndon B. Johnson called the amendment a “triumph of liberty over restriction.” “It is a verification of people’s rights, which are rooted so deeply in the mainstream of this nation’s history,” he said.

On August 6, 1965, President Johnson also signed the Voting Rights Act into law which authorized the U.S. Attorney General to investigate the use of poll taxes in state and local elections. By the end of the year, 250,000 new voters of color had been registered. The Voting Rights Act of 1965 was never made permanent but has been reauthorized many times.

Predictably, those states which still imposed a poll tax resented the move and quickly seized upon the language which appeared to limit the application to federal elections. According to the New York Times, Mississippi Attorney General, Joe Patterson, said, “Some machinery will have to be set up to reckon with two sets of voters‐one for state elections and one for national elections.”

A test shot was fired in Virginia where the Supreme Court ruled that “The poll tax is abolished absolutely as a prerequisite to voting in federal elections, and no equivalent or milder substitute may be imposed.” The case, Harman v. Forssenius, 380 U.S. 528 (1965), focused on a Virginia law put in place in response to the 24th Amendment. Virginia had eliminated their existing mandatory poll tax and substituted a provision allowing voters to choose to pay the poll tax or file a certificate of residence six months before the election. Chief Justice Warren wrote that the new law was “repugnant to the Twenty-fourth Amendment” as he echoed statements from earlier courts that “the right to vote freely for the candidate of one’s choice is of the essence of a democratic society, and any restrictions on that right strike at the heart of representative government.”

The matter would go to court again. In 1966, the Supreme Court specifically overruled Breedlove, finding in Harper v. Virginia Bd. of Elections, 383 U.S. 663 (1966) that “A State’s conditioning of the right to vote on the payment of a fee or tax violates the Equal Protection Clause of the Fourteenth Amendment.” In reaching the decision, Justice Douglas noted that “Voter qualifications have no relation to wealth nor to paying or not paying this or any other tax.”

Quoting a previous opinion in Reynolds v. Sims, 377 U. S. 533, 377 U. S. 561-562, Justice Douglas opined, “A citizen, a qualified voter, is no more nor no less so because he lives in the city or on the farm… The Equal Protection Clause demands no less than substantially equal state legislative representation for all citizens, of all places as well as of all races.”

Specifically tackling the states’ argument that they should be allowed to fix voting requirements inside their own borders, Douglas disagreed, writing, “we must remember that the interest of the State, when it comes to voting, is limited to the power to fix qualifications. Wealth, like race, creed, or color, is not germane to one’s ability to participate intelligently in the electoral process. Lines drawn on the basis of wealth or property, like those of race are traditionally disfavored. To introduce wealth or payment of a fee as a measure of a voter’s qualifications is to introduce a capricious or irrelevant factor. The degree of the discrimination is irrelevant.”
He concluded, “[T]o repeat, wealth or fee paying has, in our view, no relation to voting qualifications; the right to vote is too precious, too fundamental to be so burdened or conditioned.”

Today, no state has a poll tax on the books.

#Vote

Al Capone reportedly boasted, “They can’t collect legal taxes from illegal money.” He found that wasn’t true on this day in 1931 when he was sentenced to prison for tax evasion.

Better known as Al Capone, Alphonse Gabriel Capone was born in Brooklyn, New York, in 1899 to Italian immigrants. His parents, Gabriele Capone and Teresa Raiola, found working-class jobs and settled into their new lives. Capone, however, had trouble fitting in and was expelled from school at age 14 for hitting a teacher.

After he left school, Capone tried his hand at odd jobs, but nothing stuck. Capone eventually turned to a friend, Johnny “The Fox” Torrio. Torrio was just getting started building an empire but would go on to be called “the father of American gangsterdom” by Elmer Irey, the first chief of the Internal Revenue Service (IRS) Enforcement Branch (now referred to as the IRS Criminal Investigation Division).

Torrio introduced Capone to Frankie Yale—and his first real taste of the underworld. Yale owned a number of clubs where patrons could go to drink, gamble and pay for sex, and gave Capone a job as a bouncer and bartender. While at work, Capone, who wasn’t known for being even-tempered (remember the teacher?) got into a fight. During the melee, he was slashed across his left cheek three times with a knife, leaving a permanent scar and earning the nickname “Scarface.” Supposedly, the fight was over a girl.

At age 18, Capone met and married Mae Coughlin. Soon after, the couple had their first child, Albert Francis “Sonny” Capone. Sonny’s birth gave Capone pause—briefly—to consider making an honest living. The family moved to Baltimore where Capone intended to become a bookkeeper. But Capone couldn’t resist the allure of the gangster life, and when Torrio asked Capone to move to Chicago to help run his mob empire, it was an offer that Capone couldn’t refuse.

But the dark side quickly caught up to Torrio. In 1925 he barely survived an assassination attempt by rival mobsters Hymie “The Pole” Weiss, Vincent “The Schemer” Drucci and George “Bugs” Moran. After spending three weeks in the hospital, and even more time in prison, Torrio wanted out of the mob. He decided to leave Chicago, handing over control of the empire to Capone.

Capone was a natural at making money and quickly expanded the business. By the mid-1920s, Capone was reportedly taking home nearly $60 million annually ($878 million in today’s dollars), and his wealth continued to grow, reportedly topping $100 million ($1.5 billion in today’s dollars).

As Capone’s empire grew, so did his penchant for violence. The bodies piled up in Chicago, and most had Capone’s fingerprints all over them. The feds, however, couldn’t make charges of violence stick against Capone. But something happened in 1927—miles away from Chicago—that would prove to be a turning point. On May 16, 1927, the U.S. Supreme Court ruled in U.S. v. Sullivan that “[g]ains from illicit traffic in liquor are subject to the income tax would be taxable” by the feds (274 U.S. 259). It was just the ruling the feds needed.

(Fun footnote: The Justices noted in Sullivan that “It is urged that if a return were made the defendant would be entitled to deduct illegal expenses such as bribery. This by no means follows but it will be time enough to consider the question when a taxpayer has the temerity to raise it.”)

In 1928 the Secretary of the Treasury summoned Irey and told him to simply “get Capone.” Irey is said to have replied, “We’ll get right on it.”
Even as Irey was investigating Capone, the violence continued. The lawlessness culminated on February 14, 1929, when gunmen allegedly hired by Capone posed as police officers before executing seven members of Bugs Moran’s gang. One of the victims, Frank Gusenberg, lived long enough to tell police, “Nobody shot me.”

What triggered the dispute? Likely territory. Moran controlled the North Side of Chicago, while Capone controlled the South Side.

Moran escaped the violence, but just barely: He was late to the scene and missed the shootings by minutes. A few days later, he allegedly told reporters, “Only Capone kills like that.” It was a line so famous that it made it into the movies.

Capone was in Miami at the time of the shootings but was immediately blamed for what came to be known as the St. Valentine’s Day Massacre. There were no witnesses who lived to tell the tale, there was no evidence, and no one was ever prosecuted. However, the feds believed that Capone was responsible, and in 1930, Capone was dubbed “Public Enemy Number One” (his older brother, Ralph “Bottles” Capone would earn the title “Public Enemy Number Three”).

Capone grew more bold, believing that he was untouchable. He failed to answer a subpoena to appear before a federal grand jury, claiming he had bronchial pneumonia and was confined to bed rest. He was arrested on contempt charges after prosecutors produced evidence that he had been gambling at the track and cruising in the Bahamas. He was released on bond but was re-arrested on concealed weapons charges and sentenced to prison at Philadelphia’s Eastern State Penitentiary, where he reportedly lived in luxury amid French furniture, plush rugs and a Victrola radio in his cell.

During this time, the feds were quietly building a case against Capone. Despite his public and extravagant lifestyle, Capone never filed a federal income tax return, claiming that he had no taxable income. IRS Special Agent Frank Wilson and the “T-Men” followed the money, gathering evidence that Capone had made millions of dollars on income that was never taxed. It paid off: Capone was indicted on 22 counts of federal income tax evasion. He wasn’t alone: his brother, Ralph, Jake “Greasy Thumb” Guzik, Frank Nitti and others were also charged.

Capone bragged that he had reached a plea agreement that would have sent him to jail for just two years. The judge refused to accept the deal, and the case went to trial. Capone was found guilty and sentenced to 11 years in prison. He was fined $50,000 ($847,111 in today’s dollars), charged court costs and ordered to pay back taxes of $215,000 (now, $3,642,576).
Capone’s first prison stop was Atlanta. Initially, Capone bribed prison officials to get what he wanted, just as he had done in Philadelphia, reportedly gathering a mirror, typewriter, rugs, and a set of encyclopedias.

When he was found out, he was punished by being relocated to Alcatraz.
Alcatraz proved to be Capone’s undoing. The warden, James Aloysius Johnston, wasn’t as easily swayed as those Capone had previously encountered. When Johnston asked Capone his name, the mobster allegedly responded, “You know who I am.” Johnston is said to have retorted, “Here you are now known as AZ-85.” Capone eventually admitted, “It looks like Alcatraz has got me licked.”

Capone spent more than four years at Alcatraz, where he worked doing jobs like laundry (as most grade school kids know thanks to Gennifer Choldenko). During his sentence, his health eventually got the best of him: He had contracted syphilis years before, and it worsened, leading to “intermittent mental disturbances.”

Capone moved again in 1939, this time to a mental hospital, to serve out the remainder of his sentence before retiring to Florida. Before his death, his physician determined that he had deteriorated to the point where he had the mental capacity of a 12-year-old. Capone, once the most feared man in America, died on January 25, 1947, at the age of 48.

On July 4, 1776, in Philadelphia, Pennsylvania, the Continental Congress formally adopted the Declaration of Independence. The Declaration of Independence is exactly what it sounds like: an announcement to the world that the United States of America was declaring its independence from King George III and Great Britain – a sort of Brexit of our own. The declaration came more than a year (442 days) after shots were fired at Lexington, Massachusetts, considered the beginning of the first battle of the American Revolutionary War.

The Declaration of Independence did not mark the end of the Revolutionary War. It was quite the opposite. It signaled that the United States no longer wished to accept British rule. This was a big deal. The British had ruled the colonies since the early 17th century when the Virginia Company became the Virginia Colony in 1624, the first of the original thirteen British colonies.
The United States wasn’t the only part of the world – or even the only part of the Americas – subject to British colonization. The British had also exerted control over parts of Canada, the Caribbean, and South America.

But ruling the world gets expensive. Guarding colonies and occasionally invading new lands takes money. And not everyone agrees as to who owns which lands so fighting occasionally breaks out. That’s precisely what happened in the mid-18th century when Great Britain found itself battling a number of countries – but primarily France – in the Seven Years’ War. When the war ended in 1763, Great Britain could declare a win against France but the years of fighting had come at a significant cost: The British government was nearly bankrupt.

King George III needed to raise revenue, and quickly. What better way than a series of taxes and tariffs? And who better to tax than subjects who were far enough away – like the American colonists – to stifle the complaining? There was just one problem with this plan: The King underestimated exactly how loudly the colonists would react.

The first significant post-war tax imposed on the colonists was the Stamp Act of 1765. Stamps, as they apply to taxes, don’t have anything to do with postage. Rather, stamps are an official confirmation of compliance with a certain rule or requirement. In this case, materials which were printed and used in the colonies, like magazines and newspapers, were required to be produced on stamped paper and embossed with a revenue stamp, confirming that tax had been paid. Colonists, of course, didn’t like it, and the Stamp Act was repealed the next year. The tax didn’t go away quietly, though, as Parliament declared that it had the right to pass laws in the colonies “in all cases whatsoever.”

A second attempt at raising revenue followed through a series of acts called the Townshend Acts of 1767. Individually, they were the Revenue Act of 1767, the Indemnity Act, the Commissioners of Customs Act, the Vice Admiralty Court Act, and the New York Restraining Act. The Townshend Acts were a little bit different than the Stamp Act since they were indirect taxes on imports. Since the colonists didn’t directly bear the costs, King George III assumed that they would be less offensive to the colonists, but he was wrong.

The colonists weren’t happy – a tax was a tax. They were spurred on by Philadelphia lawyer John Dickinson, who wrote a series of essays called “Letters from a Farmer in Pennsylvania” arguing that taxation without representation was not allowed. In the letters, he asked, “[W]hat signifies the repeal of the Stamp Act, if these colonies are to lose their other privileges, by not tamely surrendering that of taxation?” He later questioned whether the British had the right to impose any tax to raise revenue without consulting with the colonists, writing “I answer, with a total denial of the power of parliament to lay upon these colonies any “tax” whatever.” Shortly after, the Townshend Acts were partially repealed.

The partially repealed bit is important. In 1773, the Tea Act was imposed on top of the remaining Townshend Acts. It was the last straw for many colonists even though it wasn’t a new tax. What the Tea Act did was keep in place the duty (tax) on tea imported to the colonies (already in place under the Townshend Act). And the purpose of the Tea Act wasn’t to raise revenue but rather to give the East India Tea Company a trade advantage, cutting out the ability of the colonists to do business on their terms. Tax or not, the colonists viewed the Tea Act as another way they were being controlled.

The colonists figured that the best way to stand up to the Tea Act was to turn away ships carrying tea headed for the colonies. The colonists were able to do so in Philadelphia and New York, but not in Boston. The Governor of Massachusetts wouldn’t allow the ships to be turned back and the colonists would not let the ships to unload in the harbor. It was a stand-off. To end it, colonists snuck onto the ships and dumped out the tea – the event that you and I call the Boston Tea Party.

The Boston Tea Party did not immediately lead to the Declaration of Independence or the Revolutionary War, even though we like to link them as though they happened in quick succession. The Tea Party took place on December 16, 1773, long before the shots at Lexington and before the Declaration of Independence. What the Boston Tea Party did do pretty quickly, however, was annoy British Parliament. As far as the British were concerned, the Boston Tea Party was more or less the equivalent of the Americans throwing a giant tantrum and destroying their nice things. As a result, the British attempted to punish the Americans through a series of laws called the Coercive Acts. Under the Coercive Acts, among other things, Boston Harbor was closed to merchant shipping, town meetings were banned, and the British commander of North American forces was appointed the governor of Massachusetts.

The colonists had enough. They convened the First Continental Congress in Philadelphia on September 5, 1774, to consider their next steps. Resistance against the British increased – that’s what led to those first shots in Massachusetts triggering the Revolutionary War. Finally, the Second Continental Congress convened in Philadelphia. On July 2, 1776, the Second Continental Congress voted to separate from Great Britain. Two days later, on July 4, the Declaration of Independence was formally adopted by 12 of the 13 colonies (the one holdout, New York, approved it a couple of weeks later).

The Declaration of Independence was drafted as a letter to the King. The colonists felt that it was important that the exact reasons for their unhappiness were made clear. The largest section of the Declaration – after the lines that we all memorized in elementary school – is that list of grievances. Of course, taxes were included:

The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

For imposing Taxes on us without our Consent:

The word “Consent” was important. Under the British Constitution, no British subjects could be taxed without the consent of their representatives in Parliament. But the colonies didn’t elect representatives to Parliament. They were, however, clearly being taxed. The colonists considered the constant imposition of taxes without a vote to be unconstitutional – just as Dickinson had written years earlier. It was, they felt, “taxation without representation.”

The idea that the colonists had such little control over their own lives didn’t just lead to the drafting of the Declaration of Independence and the accompanying vote; it set the United States down the road to real independence. In 1783, with the signing of the Treaty of Paris, the United States formally became an independent nation. But the date that we most associate with our independence is the day that those in the Continental Congress were brave enough to officially declare it to the world: July 4.
Happy Independence Day!

Earlier this week, the world turned its eyes to North Korea as President Trump met with the country’s leader, Kim Jong Un, in Singapore. Part of the fascination may be because so little is known about North Korea. Here’s a brief look at the country’s history, economy—and why the government claims its people don’t pay taxes.
Contrary to what many folks believe, the division between the Koreas didn’t happen as a result of the Korean War. The schism occurred years before that. In 1910, Japan moved into the Korean peninsula as part of its colonization efforts and ruled the country for decades. After Japan’s defeat in World War II, the United States and the then Soviet Union divvied the peninsula up into north and south factions. The divide was at 38 degrees north latitude, better known as the 38th parallel.
In 1948, the southern part of the peninsula, backed by the United States, became the Republic of Korea, more commonly called South Korea. The northern part of the peninsula, supported by the Soviets, became the Democratic People’s Republic of Korea (DPRK), more commonly called North Korea.
One problem remained: The new governments each believed that they should control the peninsula. North Korea jumped first, and in 1950 they invaded South Korea. The result was the Korean War, which lasted until 1953. Eventually, the two Koreas reached an agreement with borders that largely mirrored their previous stance along the 38th parallel (the two countries later agreed to pursue a peace accord as part of the Panmunjom Declaration signed in 2018).
After the war, North Korea was ruled by Kim Il Sung, the same leader that the Soviets had installed in the 1940s. Under Kim Il Sung, North Korea became increasingly isolated from the rest of the world. The government kept a tight leash on its people, restricting travel and press, and regulating the economy.
As part of the restructuring, in 1974, direct taxes such as income taxes were officially eliminated. The move wasn’t considered to be an economic decision since by that time the government already controlled much of the wealth. So why the strike? Outsiders considered it propaganda, believing that it was intended to demonstrate that the country could support its people. Indirect taxes and user fees, however, remain in place to this day.
Two things happened in the 1990s that would further shape North Korea: The collapse of the Soviet Union in 1991 and the death of Kim Il Sung in 1994. With China as its only real ally, North Korea’s economy and its position in the world was declining. Kim Il Sung’s successor, Kim Jong Il, responded initially by taking steps to strengthen the state, including building up the military. Eventually, however, the lack of economic opportunity was too much for the country to manage, and Kim Jong Il accepted financial and other aid from South Korea as part of the so-called “Sunshine Policy.”
Unfortunately, it wasn’t enough. In 2009, North Korea announced that it would redenominate its national currency, the won. With redenomination, the face value of the currency is changed, typically in response to inflation. In this case, the government limited available won that could be exchanged for new currency, causing a bit of a financial panic. The efforts didn’t stabilize the economy, which wasn’t surprising to those who considered it not so much response to inflation but an attempt by the government to control the markets and limit growth in the independent sector.

Things would take an even more sour turn when North Korea ramped up its nuclear efforts. The country withdrew from the Nuclear Non-Proliferation Treaty (NPT), causing concern in the west. Those fears escalated in 2013 after Kim Jong Il died and Kim Jong Un ascended to power. Kim Jong Un took steps to establish himself as the “supreme leader” of the country, reportedly offing his uncle and nominal regent, Jang Song Thaek. The following year, the United Nations published a report which claimed that “systematic, widespread and gross human rights violations have been and are being committed by the Democratic People’s Republic of Korea” and that “[i]n many instances, the violations found entailed crimes against humanity based on State policies.” (You can read the report, which downloads as a pdf, here.)
As Kim Jong Un consolidated power inside the country, he also boosted the profile of the military. That was most clearly demonstrated with increased efforts to build and test nuclear weapons, which drew the ire ofother countries, including the United States and its primary trading partner, China. That resulted in trade sanctions and resolutions from the United Nations Security Council, including those targeting the country’s foreign currency earnings.
Despite economic pressures, North Korea touts itself as the only tax-free country in the world (though rumors abound that could be changing). That’s because North Korea’s people typically still don’t pay direct taxes. However, there are still some taxes paid: The government just doesn’t call them taxes. Those taxes, which tend to be user fees and value-added-type taxes (similar to our sales taxes) make up 11.4% of the country’s gross domestic product (GDP), on par with countries such as Guatemala, Central African Republic and Bangladesh. Keep in mind that number is a little misleading, though, because it excludes earnings from state-operated enterprises.
As the country remains isolated, its economy remains largely unchanged. In 2015, the North Korea’s GDP purchasing power parity, or value of all final goods and services produced, was estimated to be $40 billion. To put that in perspective, the GDP purchasing power parity for the top three economies was:

  1. China: $23.1 trillion
  2. European Union: $20 trillion
  3. United States: $19.4 trillion

South Korea’s GDP purchasing power checks in at $2 trillion.
The per capita GDP in North Korea is estimated to be $1,700. According to a 2017 report on the State of Food Security and Nutrition in the World, 10.3 million people in the country—nearly half of the population—are undernourished, a problem that the World Food Program says has been triggered by weather-related droughts and “compounded by political and commercial isolation.” By comparison, the GDP per capita for the United States is $59,500.
Today, the Central Intelligence Agency fact book claims that North Korea has “one of the world’s most centrally directed and least open economies.” Trade remains restricted and the country “does not publish reliable National Income Accounts data.”

Happy Cinco de Mayo! Before you break out the “¡Felicidades!” you’ll want to get your holidays straight: Today isn’t Mexican Independence Day. Mexican Independence Day, which is a national public holiday in Mexico, is celebrated on September 16, marking the country’s declaration of independence from Spanish rule in 1810. In contrast, Cinco de Mayo is the anniversary of the Mexican army’s victory over France at the Battle of Puebla during the Franco-Mexican War in 1862.
So how did a battle against one country (France) more than fifty years after the country declared its independence against another country (Spain) become so popular? The David-versus-Goliath-like battle offered hope to the Mexican people that they could remain a sovereign nation.
As in the United States, Mexico struggled to find its footing as a new country. After finally gaining independence from Spain in 1822, Mexico juggled a few different kinds of governance. Eventually, the country separated into two parties: Liberals and Conservatives. Conservatives tended to side with more traditional European policies, including privileges granted to the Catholic Church. Among those privileges were exemptions from tax. In contrast, the Liberals weren’t keen on the granting the Catholic Church any special privileges and sought to limit them.
In the mid-19th century, the Liberals rose to power. Part of their agenda included passing the “Liberal Reform Laws.” The first of those laws, the Juárez Law (named after former Mexican President Benito Juárez), was intended to restrict the authority and scope of the Church courts. A second law, the Lerdo Law (named after former Treasury Secretary Miguel Lerdo de Tejada) allowed the government to confiscate Church land and – you guessed it – tax it. A third law, the Iglesias Law (named after controversial interim President José María Iglesias, and not Julio – sorry, Mom), put further restrictions on the clergy.
As you can imagine, as the Liberals passed more and more laws to restrict the rights of the Church, the Conservatives became agitated. Eventually, the two factions went to war.
Wars, of course, are expensive. And while most of Europe was happy to stay out of conflicts in the Americas, they weren’t thrilled about the loss of resources, including money. So in 1861, when then-President Mexican Benito Juárez defaulted on a series of debts owed to European countries, the Europeans sent the equivalent of armed thugs to collect what they were owed. Eventually, Britain and Spain negotiated deals and returned home, but France spurred on by Louis-Napoleon Bonaparte (Napoleon III), stayed, determined to make a statement and perhaps pick up some additional land. That was the beginning of what became known as the Franco-Mexican War (1861-1867).
Despite the fact that France had significantly more resources than Mexico, it was initially unable to move too far into the country. Eventually, France became more successful and captured the port city of Veracruz, Mexico. That caused the Mexican government to flee, and it appeared that the French were close to a victory.

However, things were about to change. A seemingly insignificant battle in Puebla de Los Angeles on May 5, 1862, became a symbolic win for Mexico: It emboldened a poor, beleaguered resistance movement into believing that they had a chance. Outnumbered and outgunned, the Mexicans fought back against the French, who retreated after losing 500 soldiers. Mexican historian and philosopher, Justo Sierra, wrote, about the day:

its moral and political results were immeasurable. The entire nation was thrilled with enthusiasm. Surely no Mexican, whatever his party, was downcast by the victory. The remotest Indian village felt the electric current of patriotism that sped like lightning through the land, awakening many a sleeping conscience. The people were inspired to make a supreme effort.

The battle didn’t end the war. It raged on for several more years, and France appeared to have the advantage a few times, even capturing Mexico City. But fierce Mexican resistance, together with support from the United States, helped Mexico secure a victory in 1867. The timing wasn’t coincidental.
In the mid-1860s, the Union and the Confederacy officially stopped fighting, putting an end to the United States Civil War. The United States had largely ignored foreign affairs during wartime. After the war ended, that changed. We declared that France had violated the Monroe Doctrine. The Monroe Doctrine was a declaration that the United States would stay out of European affairs if Europe stayed out of North and South America (existing colonies excluded). Failure to do so would be considered an act of aggression. When France wouldn’t leave Mexico, we took the opportunity to flex our muscles, sending troops – and a message – to the border. The Mexicans continued to fight, and an increasingly weak French army eventually surrendered to the Mexican Republic.
Today, Cinco de Mayo is celebrated throughout the United States perhaps more than in Mexico. It’s typically a normal day in Mexico, except in the State of Puebla where the battle was won, and most government offices remain open (unlike on Mexican Independence Day when government offices are closed).
So why the celebration here? The United States likely benefited more from the battle in Puebla de Los Angeles than Mexico. The French were so occupied with Mexico that they were not able to significantly fund or assist the Confederacy during the U.S. Civil War, despite the best of intentions. In contrast, the Union was funded through a series of government taxes, including the Internal Revenue Act of 1862, the precursor to our modern income tax system (and first established Office of the Commissioner of Internal Revenue). Since the French were sympathetic to the Confederacy, had the French easily taken Puebla in 1862, freeing up French military and other resources, the entire course of history might have been changed.
So, it all comes down to power and money and taxes – like most conflicts these days. Ponder that over a nice tequila and a plate of tacos tonight. Salud!

Happy Birthday, President Washington! Okay, it’s not really George Washington’s birthday (that’s February 22), but each year, we celebrate the birthday of our first president in February. Congress made it a federal holiday beginning in 1879, and the date was officially moved to the third Monday in February as part of a law signed by President Johnson on June 28, 1968, to “help Americans to enjoy more fully the country that is their magnificent heritage.”

I know what you’re thinking: What about the rest of the presidents? They’re not officially included in today’s celebration and never have been by federal law. We tend to think of Presidents’ Day as honoring the birthdays, collectively, of Presidents Washington and Lincoln, but that’s not the case. President Lincoln was born on February 12 but his birthday was never declared a federal holiday. Attempts to combine the two into one day, like “Washington and Lincoln Day” or “Presidents’ Day” were not successful.
Rep. William Moore McCulloch (R-OH) noted, about efforts to change the name:

It was the collective judgment of the Committee on the Judiciary that this [naming the day “President’s Day”] would be unwise. Certainly, not all Presidents are held in the same high esteem as the Father of our Country. There are many who are not inclined to pay their respects to certain Presidents. Moreover, it is probable that the members of one political party would not relish honoring a President from the other political party whether he was in office, no matter how outstanding history may find his leadership.

To this day, only Washington’s birthday remains an official federal holiday.
But what about those sofa sales? And car sales? You can thank retailers for those. Remember that 1968 holiday law? Included in the explanation for the bill was this nugget: “The Monday holiday will stimulate greater industrial and commercial production, sparing business and labor the penalty of midweek shutdowns.”

The economy was a factor in the decision to push for a Monday holiday (rather than simply Washington’s actual birthday) which might explain why a number of business-related organizations including the Chamber of Commerce of the United States, the National Association of Manufacturers, the National Association of Travel Organizations, and the National Retail Federation, helped push the law through. In the years to come, realizing the power of holiday spending, marketers began to use the term Presidents’ Day to tout sales over the three-day weekend. Today, we say it without even a second thought, even though no such federal holiday exists (some states, however, do observe an official Presidents’ Day).

Since the modern-day version of the holiday is so closely aligned with consumer spending, I thought it would be fun to look at the flip side: government revenue. Here are ten quick facts about tax and our presidents:

1. Our modern-day federal income tax system was created by the Revenue Act of 1913, which was signed into law by President Woodrow Wilson on October 3, 1913.

2. Presidential compensation is set by statute (it’s currently $400,000) and it is subject to tax. As of 2016, the salaries of the Vice President and members of Congress weighed in at $230,700 and $174,000, respectively. The Speaker of the House pulled in $223,500, and the House Majority & Minority Leaders received $193,400.

3. Our modern-day federal estate tax was created by the Revenue Act of 1916, which was signed into law by President Wilson. However, a number of presidents had advocated for the tax, including President Theodore Roosevelt, who declared:

As a matter of personal conviction, and without pretending to discuss the details or formulate the system, I feel that we shall ultimately have to consider the adoption of some such scheme as that of a progressive tax on all fortunes, beyond a certain amount either given in life or devised or bequeathed upon death to any individual — a tax so framed as to put it out of the power of the owner of one of these enormous fortunes to hand on more than a certain amount to any one individual; the tax, of course, to be imposed by the National and not the State Government.

4. Social Security numbers were first issued by the Social Security Administration in November 1935. The numbers were created to help administer President Franklin D. Roosevelt’s New Deal Social Security program, officially called the Social Security Act. The purpose of the act – coming off of the Great Depression – was to provide benefits to retirees, the unemployed, certain children and the disabled. As now, payments from the program were financed by a payroll tax on wages, half of which was withheld from an employee’s check (now 6.2%) and the other half of which was in the form of a contribution from the employer (now 6.2%). That framework has pretty much held steady throughout time except for the Medicare piece (now 1.45% for employers and employees) which was tacked on in the 1960s.

5. While President Trump has declared the recent tax cuts the “largest in history,” most historians agree that the largest tax cuts were those made during the Economic Recovery Act of 1981 by President Reagan. They didn’t remain in place for too long: many of this 1981 cuts were rolled back in 1986. The result was the Reagan Tax Reform Act, a reform effort that was so dramatic that the Tax Code was renamed the Internal Revenue Code of 1986.

6. President Ronald Reagan paid tax in 1981 at an effective rate of 40%, the highest paid by any president from Nixon to Obama.

7. Taxes have long been a policy issue tackled by presidents and presidential candidates. In 1988, at the Republican National Convention, President George H.W. Bush would declare, “Read my lips: No new taxes.” After he was forced to raise taxes during his presidency, his words would come back to haunt him in the next election.

8. That infamous “I am not a crook” comment from President Nixon? Contrary to popular belief, it wasn’t directed at Watergate. While defending allegations that he had not paid his taxes, Nixon told reporters, “People have got to know whether or not their President is a crook. Well, I am not a crook.” Nixon agreed that he paid “nominal” income taxes in 1970 and 1971 but didn’t say much more. Ultimately, the Internal Revenue Service (IRS) did not charge Nixon with a crime but did find that he had underpaid hundreds of thousands of dollars in tax.

9. Since the 1970s, most presidents (and recent candidates for president) have chosen to make their tax returns public. You can click through number of them at the Tax History Project managed by Tax Analysts.

10. As for President Trump’s tax returns? According to former IRS Commissioner John Koskinen, President Trump’s tax returns are “in a locked cabinet in a locked room that nobody’s in. You’ll need a key to the room and the cabinet to get it. We’re in the process of turning that cabinet into a safe.” But it’s not just for President Trump. According to Koskinen, “We keep all the returns from every president in there.”

As a country, we’ve grown used to the idea that our leaders could be investigated by authorities for allegations ranging from perjury to collusion. Politicians on both sides of the aisle are quick to throw out the words “witch hunt” to describe and discount the idea that they might have been engaged in wrong-doing. Witch hunt or not, it happens so often that we’ve almost grown dismissive of headlines that any of our leaders could be under investigation.

More than 50 years ago, however, Dr. Martin Luther King, Jr., a leader in the civil rights movement, was on the receiving end of repeated harassment by tax authorities. Inquiries into Dr. King’s finances were not new: He was investigated in two separate states (Georgia and Alabama) on numerous occasions and together with his legal team and members of the Southern Christian Leadership Council (SCLC), Dr. King was repeatedly investigated by the Internal Revenue Service (IRS).

It was clear to many of his supporters that Dr. King was targeted because of the color of his skin and the words that he dared to speak about inequality. In 1960, he made news as the first person ever criminally charged in the state of Alabama on tax fraud (you can read the statement issued “Committee to Defend Martin Luther King, Jr.” accusing the state of Alabama of falsely distorting Dr. King’s 1958 income tax return in an attempt to indict him here).

After his indictment, Dr. King was asked by a reporter, “Have your income tax returns been investigated before?”

He replied, “Oh yes, they have been investigated two or three times before. This is nothing new.”

(You can see the interview with Dr. King on this WSB-TV news film clip.)

The case would eventually go to trial. The outcome was surprising.

On today, Martin Luther King Jr. Day, as I always do, I am reposting an article that I wrote years ago about that trial and the legal profession. You might have seen it before: it remains one of my favorite posts to this day. Enjoy!

I’ll be frank. I don’t always love being a lawyer.

When I was a little girl, I used to watch Perry Mason with my grandfather on TBS. That constituted my entire legal experience before entering law school. And it was flawed.

You see, on TV, none of the lawyers lied to Perry Mason over the phone about being amenable to a continuance and then told the Clerk of Court differently. Nobody faxed Perry Mason a witness list the day before a hearing along with evidence that they “forgot” to send prior. A lawyer didn’t claim proper service on Perry Mason and then fail to deliver the notices to his law offices. You never saw a lawyer represent clients who had sent Perry Mason death threats via email in an attempt to assert that Mr. Mason was the one being unreasonable. You didn’t see cases drag on for years and years (yes, plural) because counsel just couldn’t get it together enough to resolve the matter. On TV, no matter how dire, how dramatic, there was ultimately justice.

The law is supposed to be about justice, about finding the truth. And increasingly it feels like it’s not. It’s more about touting your wares, putting yourself on commercials during daytime television standing in front of legal books shouting about maximizing money, about doing anything to get paid. And that is sad.

A few months ago, I attended a hearing that made me question my role in the law. You’re probably assuming that the hearing somehow didn’t go well. That isn’t true. It went remarkably well. Our client was an excellent witness. The judge was fair and very accommodating. We walked out of the hearing knowing that we had done a good job. The thing was, I felt relieved that it was over. I was happy for my clients. But I wasn’t happy for me. Truth be told, I hated every minute of preparing for the case. Well, not every minute. The theory, the strategy? That I didn’t mind. Our strategy was simply to tell our story. And we somehow felt that should be enough. In the end, I think it was.

But the getting there? The games? The complete lack of professionalism exhibited by opposing counsel? Lying about continuances? Surprise witnesses? Last minute evidence? Maybe that seems exciting on TV, but in real life, it’s not exciting. It’s sickening. It’s stressful. It’s not fair to good lawyers who spend their time crafting a case. It’s not fair to clients who don’t know what to expect in the courtroom. And yet somehow, month after month, this behavior doesn’t seem so unusual.

And as opposing counsel sat in her chair in her too tight blouse with the clickety-click of her little heels on the floor, the same counsel who called my clients’ claims frivolous, the same counsel whose supervising partner at Big Law Firm once commented to me that she didn’t understand why a small firm like mine would go up against a big firm like hers, I thought about why we were all at that place, how it all happened that we were in the same room believing two different versions of the truth. I couldn’t explain it.

Later that same day, while reaching for my Moscow Mule (yes, my favorite cocktail du jour, even before Rachael Ray put it in her magazine last month – grr) at the Union League, I understood why the partner at my former firm kept a bottle of wine in his desk: the pressure of being a lawyer, the pressure of having to win, it’s a lot to take in. And while other professions can often look to each other for reassurance, we don’t really have that in the legal profession with few exceptions. It is, by its very nature, adversarial. It is competitive. It is cutthroat. And me? I am not. Of course, I like to win. I like to think that I am good at it. And then maybe I think that’s not something to be particularly proud of.

So, over the past few weeks, which have been professionally difficult, I have tried to remember why it is exactly that I became a lawyer – and what about it I used to love. And I was reminded of my favorite scene in the movie Philadelphia. The one where Andrew Beckett sums up what’s actually good about the law:

Joe Miller: What do you love about the law, Andrew?
Andrew Beckett: I… many things… uh… uh… What I love the most about the law?
Joe Miller: Yeah.
Andrew Beckett: It’s that every now and again – not often, but occasionally – you get to be a part of justice being done. That really is quite a thrill when that happens.

And so I tried to think of when that happened last – when justice was actually done. Not when I won a case or when I got a client out of trouble – that happens often enough. But remember, winning and justice aren’t the same thing. I had to think for a while.

Later, I was preparing to write a post about Martin Luther King, Jr. Day. I figured I’d just put up a copy of his famous “I Have A Dream” speech and call it a day. But as I researched, I found part of his autobiography which, I will confess, I had never read in full. And I saw something interesting: I knew that Dr. King had been arrested several times for various accusations, but I didn’t realize that he had been on trial for tax evasion.

Yep. On February 17, 1960, a warrant was issued for the arrest of civil rights leader Dr. Martin Luther King Jr. on charges of tax evasion. He was accused of allegedly falsifying his Alabama income tax returns for the years 1956 and 1958; he was the only person ever prosecuted under the state’s income tax perjury statute. It seemed like an inevitable victory for the government.
In his autobiography, Dr. King described the trial like this:

This case was tried before an all-white Southern jury. All of the State’s witnesses were white. The judge and the prosecutor were white. The courtroom was segregated. Passions were inflamed. Feelings ran high. The press and other communications media were hostile. Defeat seemed certain, and we in the freedom struggle braced ourselves for the inevitable. There were two men among us who persevered with the conviction that it was possible, in this context, to marshal facts and law and thus win vindication. These men were our lawyers-Negro lawyers from the North: William Ming of Chicago and Hubert Delaney from New York.

And something quite remarkable happened. On May 28, 1960, only after a few hours, Dr. King was acquitted by an all-white jury in Montgomery, Alabama (statement downloads as a PDF).

Dr. King said about his trial:

I am frank to confess that on this occasion I learned that truth and conviction in the hands of a skillful advocate could make what started out as a bigoted, prejudiced jury, choose the path of justice. I cannot help but wish in my heart that the same kind of skill and devotion which Bill Ming and Hubert Delaney accorded to me could be available to thousands of civil rights workers, to thousands of ordinary Negroes, who are every day facing prejudiced courtrooms.

And it dawned on me: no matter how many slick-haired, silver-tongued attorneys do their best to make a quick buck at the expense of the reputation of the profession, you can’t dispute that justice is attainable.

And justice is good. And justice is important. And even if it is infrequent, it’s worth it when it happens.

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