Domestic Consequences of WWI

July 31, 2014 – Looking at6222315204_fe67a51714_z the domestic consequences of the Great War, Tom Woods hosts Robert Higgs, economist and economic historian, to discuss his book “Crisis and Leviathan: Critical Episodes of Growth of American Government.”

In this episode of The Tom Woods Show, Higgs shares his thoughts on war and the growth of government including the authorization of the federal income tax:

The federal income tax was authorized just before World War I broke out in the United States. In the beginning, that was viewed as a kind-of offset to reductions in tariffs and its proponents argued that it would never be a big deal for anybody except the very, very rich. And indeed, when it was first levied in 1914/1915, it didn’t effect most people at all. In fact, well over 90 percent of the American people had no real income tax liability in the beginning. Even the rich people didn’t pay a huge amount because the top rate was seven percent. Hardly anybody in the United States earned enough to be in that top rate. So that’s where we started. But all of that changed massively as soon as the United States got involved in the war.

How do you feel about your tax dollars being spent on war?

<a href=”July 31, 2014 – Looking at the domestic consequences of the Great War, Tom Woods hosts Robert Higgs, economist and economic historian, to discuss his book “Crisis and Leviathan: Critical Episodes of Growth of American Government.”

In this episode of The Tom Woods Show, Higgs shares his thoughts on war and the growth of government including the authorization of the federal income tax.

The federal income tax was authorized just before World War I broke out in the United States. In the beginning, that was viewed as a kind-of offset to reductions in tariffs and its proponents argued that it would never be a big deal for anybody except the very, very rich. And indeed, when it was first levied in 1914/1915, it didn’t effect most people at all. In fact, well over 90 percent of the American people had no real income tax liability in the beginning. Even the rich people didn’t pay a huge amount because the top rate was seven percent. Hardly anybody in the United States earned enough to be in that top rate. So that’s where we started. But all of that changed massively as soon as the United States got involved in the war.

How do you feel about your tax dollars being spent on war?

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