There is considerable irony in the fact that judicial hostility to the income tax in the United States has led to a strong and continued involvement of the federal judiciary in the development of the income tax. In Pollock v. Farmers Home Loan (before the ratification of the sixteenth amendment), and in Eisner v. Macomber (after its ratification) the Supreme Court of the United States indicated a both a willingness to consider whether particular tax instruments were within the power of Congress to enact, and, a willingness to consider whether particular provisions of the income tax were within that power. This prospect for judicial review of the particular provisions of the tax produced an income tax in the United States that feels much like "law," susceptible to deductive legal reasoning, containing many more "quasi-common" law doctrines, and much more susceptible to interpretive methods based on intent and substance than would otherwise be the case.

Histories of the modern American income tax have long explored the role that social and political pressure played in the development of a new fiscal order. A singular focus on social and political factors, however, provides only a partial account of the history of the modern American income tax. This article seeks to provide a broader explanation by moving beyond the social and political determinants to uncover the antecedent economic forces that facilitated the adoption of the modern graduated income tax. Without marginalizing the importance of social and political factors, the central aim of this article is to make a modest contribution to the legal and political historiography of the U.S. income tax by highlighting how changing material economic conditions afforded social groups, political reformers, and lawmakers with a unique, historically-contingent opportunity to transform the American tax system.

"This article explores the intellectual history of the income tax treatment of gifts. Although our first two income taxes--the Civil War tax and the ill-fated income tax of 1894--did consider money (or the value of property) received by gift to be income, Congress abandoned that approach when it re-enacted the income tax in 1913, following ratification of the 16th amendment. But the basis for that decision is unclear, and the rules are at odds with the early development of income tax theory running from Seligman and Haig to Henry Simons. The article explains the tension between theory and enacted law, and provides a model for gift treatment that links the doctrines governing the treatment of the donor with those governing the treatment of the donee. It also explores some of the later developments involving ancillary doctrines governing the treatment of gifts of appreciated property, either to charitable or noncharitable donees."

Most studies regarding Keynesianism – and especially those focused on the early years of the fiscal revolution – have emphasized the spending side of the fiscal equation, giving short shrift to the important role of taxation. A better history of revenue Keynesianism is needed: the distinctive role of taxation within a larger program of compensatory fiscal policy. This article explores the early history of compensatory taxation, focusing not on the era of its intellectual and political maturity after World War II, but on its relative infancy during the 1930s. It gives special attention to debates within the tax policy community, a loose grouping of fiscal experts whose influence on the fiscal revolution was pivotal. As it turns out, compensatory taxation found a receptive audience in the tax community of the 1930s. And by the early 1940s, it had found concrete expression in the wartime tax regime – a distinctive system of taxation that remains largely intact even today.

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 war–perhaps 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 taxation–conversion 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.

If the integration of the corporate and individual income taxes and the removal of double taxation ever had a “legislative moment,” it was the decade following World War II. Between 1943 and 1946, individuals, trade associations, government agencies, and members of Congress forwarded more than sixty proposals for the relief of double taxation, many of which were repackaged or reintroduced several times over the subsequent eight years. It was not until 1954, though, as part of a comprehensive revamp of the Internal Revenue Code, that Congress enacted a modicum of dividend tax relief. This paper considers three questions: (1) Why was dividend tax relief so long in coming, given the initial momentum for reform; (2) What led dividend tax reform to rise to the top of the agenda in 1954; and (3) Why, given the degree of interest in integration proposals, was the relief so modest and why did it not ultimately take hold as the first step toward full integration. As the paper explains, a significant part of the story is the rise and fall of a perceived equity crunch and the reaction to it among managers who had previously given the integration issue lower priority.

This Article traces the mortgage interest deduction (MID) from accident to birthright, from one of many deductible personal interest items to one of the few left standing, and from a negligible tax offset to the second most expensive tax subsidy. It also tells the story of how the MID and other federal housing subsidies fueled the post-World War II surge in rates of homeownership and, more recently, contributed to the collapse of the housing and financial markets. Finally, the Article offers a eulogy to the MID reflecting two generations of tax reformers' criticism of the subsidy that is more applicable today than at any time during its nearly 100-year history.

Since 1975, the earned income tax credit (EITC) has transformed from a small, obscure provision of the federal tax code into one of the largest programs in the U.S. social welfare system. Today, the EITC provides $47 billion in benefits each year to 24 million workers and their families. Bill Clinton famously called the EITC "a cornerstone of our effort to reform the welfare system and make work pay."