“Tax the rich” has been an American battle cry since before income taxes even existed in the U.S — and even before the U.S. itself existed. 

“The Boston Tea Party was not about taxation without representation as much as it was tax unfairness,” said Douglas Holtz-Eakin, an economist and former head of the Congressional Budget Office who now serves as president of The American Action Forum, a conservative think tank. Holtz-Eakin said back then, American companies were angry about paying taxes on tea that British companies did not have to pay.

“We hate perceived unfairness in the tax code. It's been like that since the beginning,” he said.

Eakin said the country’s founders were always wary of a government getting too powerful and too wealthy through taxes. “You know, we had to amend the Constitution to get an income tax,” he said.

The first income tax was put in place during the Civil War when the country was desperate for money. And that was all about taxing the rich — only the wealthiest 5% paid.

Not long after the war ended, income taxes ended, too, and all was quiet on the income tax front until World War II. In a fireside chat in 1942, President Franklin Delano Roosevelt proposed a big income tax to raise money for the war.

“Are you a businessman?” Roosevelt asked. “Well, your profits are going to be cut down to a reasonably low level by taxation. I do not think that any American citizen should have a net income in excess of $25,000 per year.” 

$25,000 is about $500,000 in today’s dollars.  Any income above that was taxed at 60%.

The super rich were taxed at a rate of 94%. But FDR wasn't just taxing the wealthy. Most workers paid FDR’s income tax.

To try to make these new taxes less, well, taxing, FDR launched a big PR campaign, even commissioning Irving Berlin to write a song about the thrill of paying taxes called, aptly, “I Paid My Income Tax Today.” The song was sung by beloved TV cowboy Gene Autry: “I never felt so proud before,” the song goes, “to be right there with millions more who paid their income tax today … You see those bombers in the sky? Rockefeller helped to build them. So did I. I paid my income tax today!”

The war ended. Income taxes did not, but they did soften a bit. By 2017, top earners (people making more than $400,000 dollars per year) paid around 40% in income taxes.

President Trump’s 2017 tax cut brought the taxes on that group down to around 37%.

“Our tax code is substantially more progressive than Europe,” said Jessica Riedl, an economist at the Manhattan Institute, a conservative think tank. 

Progressive, meaning the wealthier you are, the higher your tax rate. The U.S. middle class — those earning roughly $50,000 to $150,000 — pay around a 25% income tax.

“There's a myth that the rich don't pay taxes,” said Riedl. “And that the middle class pays everything. That's really not true. The difference in America is we tax the middle and lower earners at a drastically lower rate than Europe.”

Of course, tax percentages can be a little abstract. And, to be sure, the actual dollar amounts hit a bit different: If the 2017 tax cuts expire, middle class households, on average, would see their taxes go up by $1,000. The top 1% would see a tax increase of about $70,000. That is, if they actually pay those taxes, said Douglas Holtz-Eakin. 

“If you put the tax rate very, very high, the incentive to do a tax-sheltered activity becomes greater,” he said.

As soon as the U.S. put an income tax in place, an entire industry was born to help people avoid paying it: tax lawyers, tax shelters, fancy accountants. And now the IRS is going to have fewer resources to push back against tax evasion.

Economist Jessica Riedl pointed out that the Department of Government Efficiency is aiming to cut about a third of the IRS staff.

“That is going to increase tax evasion by hundreds of billions of dollars,” Riedl said. “You can't cut deficits while laying off all the workers who collect the taxes. In fact, I believe that by the time DOGE is finished, it will actually have increased budget deficits.”

The new tax bill is expected to increase the deficit by around $4 trillion, though Riedl thinks in reality, it will be much more.