Tax Reforms Of The 1920s Essay

The tax reforms of the 1920’s were the answer to the extraordinary high rates the government had imposed during World War I. Permanent income tax had only been a part of the American life for less than a decade. Income tax was introduced to the American public in 1913 at a low rate but increased to over 70% to sustain World War I. The war ended in 1918 after four years and left America in a bad place. National debt was high, work was difficult to find, and wages were low. Warren Harding ran for office in 1921 with the former Massachusetts governor, Coolidge, as his running mate. Their political platform was smaller government and a return to normalcy in which business could operate with confidence. Under Harding’s leadership, The Revenue Act of 1921 was the first of the 1920’s tax reforms passed lowering the top rate to 58 percent.

Coolidge handled the publics property and money as seriously as he would his own. He once commented he was head of the organization that makes the greatest of all budgets – the United States government. Growing up with puritan values and conservative economic views, Coolidge efficiently continued to direct the Budget and Accounting Act of 1921 that had passed under Harding’s leadership. Coolidge was not a “yes” man. In fact, his customary answer was “no”. Coolidge and his staff worked diligently to find places to save money. Coolidge was always consistent and discipled, never changing his perspective or moral compass to please his