The History of Payroll Taxes in the United States, Part 2

Over time, payroll taxes have evolved into what they are today. From 1913 on, tax law significantly expanded to include corporate and individual income taxes. 1918 saw additional expansion to include foreign tax credit and more income and deduction items.

1926 saw Title 26 come to be which formed the Internal Revenue Code and the US Code which included things like gift and estate provisions. The IRS was reorganized in 1954 to the IRS we know today.

WWI saw federal taxes expanding. Andrew Mellon who served as Secretary of the Treasury and was quite a wealthy businessman  suggested that income tax reduction could spur growth. Multiple cuts were made, the last was the year before the Great Depression hit in 1929. Income taxes were raised again towards the end of the Depression and WWII and then reduced time and time again in the following presidencies. Bush’s second presidency also featured big cuts for corporations and the wealthy.

1986 saw a thousand pages of new IRS Code which included lowered tax rates, new international rules, lowered capital gain taxes, and much more. Not surprisingly, the tax code has been modified 34 out of 97 years(1913-2010)!

What will the future of payroll taxes hold?

Research from Wikipedia.