American Minute with Bill Federer June 9 – Withholding from your paycheck began—Withholding-from-your-paycheck-began.html?soid=1108762609255&aid=iSKw46VhXBU.


Withholding taxes from people’s paychecks began JUNE 9, 1943. It was passed by Congress as an emergency measure to get money to fight Hitler during World War II.

The idea was developed in 1942 mainly from Beardsley Ruml, treasurer of Macy’s department store and chairman of New York’s Federal Reserve Bank, with help from Bernard Baruch and Milton Friedman.

Called the “Pay-As-You-God” tax, the Federal Government forgave people for not paying their annual lump sum taxes at the end of 1941 if they signed up to have all future taxes withheld from each paycheck.

It was part of the patriotic war enthusiasm which included slogans such as: “Uncle Sam Needs You,” “Buy War Bonds,” and “Smash the Axis-Pay your Taxes.”

So much money came in from the “Pay-As-You-Go” tax, with so few complaints, that it was continued even after the war ended.

John F. Kennedy told Congress, April 20, 1961:

“Introduced during the war when the income tax was extended to millions of new taxpayers, the wage-withholding system has been one of the most important and successful advances in our tax system in recent times.

Initial difficulties were quickly overcome, and the new system helped the taxpayer no less than the tax collector.”

But Americans were not always so taxed. In his 2nd Annual Message, 1802, Thomas Jefferson wrote:

“We are able, without a direct tax, without internal taxes, and without borrowing, to make large and effectual payments toward the discharge of our public debt and the emancipation of our posterity from that mortal canker…

It is an encouragement, fellow-citizens, of the highest order to proceed as we have begun in substituting economy for taxation.”

President Andrew Jackson stated in his 8th Annual Message, December 5, 1836:

“There is no such provision as would authorize Congress to collect together the property of the country, under the name of revenue, for the purpose of dividing it equally or unequally among the States or the people.

Indeed, it is not probable that such an idea ever occurred to the States when they adopted the Constitution.”

In his Message to Congress, May 27, 1830, Andrew Jackson said:

“Through the favor of an overruling and indulgent Providence our country is blessed with general prosperity and our citizens exempted from the pressure of taxation, which other less favored portions of the human family are obliged to bear.”

In Eighth Annual Message, December 5, 1836, President Andrew Jackson stated:

“No people can hope to perpetuate their liberties who long acquiesce in a policy which taxes them for objects not necessary to the legitimate and real wants of their Government…

The practical effect of such an attempt must ever be to burden the people with taxes, not for the purposes beneficial to them, but to swell the profits of deposit banks and support a band of useless public officers…

There would soon be but one taxing power, and that vested in a body of men far removed from the people…

The States…would not dare to murmur at the proceedings of the General Government, lest they should lose their supplies;

all would be merged in a practical consolidation, cemented by widespread corruption, which could only be eradicated by one of those bloody revolutions which occasionally overthrow the despotic systems of the Old World.”

In his 1837 Farewell Address, President Jackson stated:

“There is, perhaps, no one power conferred on the Federal Government so liable to abuse as the taxing power…

Plain as these principles appear to be, you will yet find there is a constant effort to induce the General Government to go beyond the limits of its taxing power and to impose unnecessary burdens upon the people…to fasten upon the people this unjust and unequal system.”

Prior to 1913, other than a few years during the Civil War, the Federal Government was financed, not by income taxes, but primarily from tariff taxes on imports, called imposts.

President Franklin Pierce stated in his First Annual Message to Congress, December 5, 1853:

“Happily, I have no occasion to suggest any radical changes in the financial policy of the Government.

Ours is almost, if not absolutely, the solitary power of Christendom having a surplus revenue drawn immediately from imposts on commerce.”

About tannngl

Believer (God the Father, the Son and Messiah, the Holy Spirit), daughter, wife, mother, memaw, RN, hobbit, street evangelist I love people, music, reading, praying, studying the Bible, keeping up with national news and politics. I am a strict constructionist, a true American. I love my country. I honor her warriors. I am thankful for our Constitution and will personally bear arms for it.
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4 Responses to American Minute with Bill Federer June 9 – Withholding from your paycheck began

  1. As I understand it, the British income tax started during mobilisation for the Napoleonic Wars, again as an emergency measure.


    • tannngl says:

      That’s interesting. Perhaps our progessives stole the idea from your country.

      Was it an employer with holding tax?


      • The witholding tax method of collection, which we call “pay as you earn”, was introduced in 1944 after trials in 1940-41; so round about the same time as in the US. And- it was in wartime, which (without debating the merits of any particular war) tends to be supported more by reactionaries rather than progressives. Reactionary politics raise expenditure too, just on different things.

        We are going to be spending £100 bn on new nuclear submarines, beautifully engineered, complex things which we hope will be completely useless, and will be expensive to run. Will they protect our sovereign territory from Argentina, the greatest threat to our territorial integrity atm? Doubt it.


  2. tannnglngl says:

    haha I had to look up ‘reactionaries’. I think you’re meaning is what we call conservatives?
    We don’t have that term as a political group.

    In the US the federal govt has only a few things it is required to do. It is not allowed to do anything else. All other rights and responsilitities are due citizens by God and the states have more rights and responsibilities than the feds.

    However, the progressive presidents in the early 1900’s veered from this course starting with Woodrow Wilson and then FD Roosevelt. They both felt the citizen could not do well enough on their own so more control had to go to the central govt.

    Now in the US the central govt has grown into monstrous proportions and has taken to suing individual states, spying on citizens using drones, wire tapping, internet. Our prez has written executive orders that allow feds to arrest citizens without the constitutional protection of a speedy trial for charges and legal representation. Our central govt has spent $5 trillion in 3.5 years with the cover that they were ‘stimulating’ our economy. Unemployment has risen in that time. People have lost their homes. Banks and indeed our federal government has been downgraded by financial measures. The number of people on food stamps has increased geometrically. We are a nation in big trouble.

    I guess you could say we, the people are turning into reactionaries. Yes, you could say that.


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