American presidents take on the taxman

"Taxes are what we pay for civilized society." These words, penned by Justice Oliver Wendell Holmes Jr. inCompania General de Tabacos del Fillipinas v. Collector of Internal Revenue, 279 U.S. 306 (1929), are literally chiseled in stone on the façade of the Internal Revenue Service Building in Washington, D.C. What the IRS neglects to mention is that Holmes spent more than 50 years drawing a government paycheck and wrote those words in dissent.

The country has just survived another tax season, and its elected leader has proposed a one-page plan of sweeping changes primarily benefiting those of his own ilk. The great salesman's task of selling his reform plan is hamstrung by the fact he simultaneously refuses to confirm that he has ever paid any taxes at all during his adult life. President Donald J. Trump's disdain for paying taxes makes him unique neither as a president nor a citizen. Jesus Christ himself implored us to "render to Caesar what belongs to Caesar," but he never said we had to like it.

George Washington first had to lace up his boots as commander in chief when farmers in western Pennsylvania rebelled against the federal government's imposition of an excise tax on grain spirits in 1794. Distilling surplus crops was the only way to convert them into anything sellable if a bumper harvest yielded low prices. George's presence at the lead of the army convinced the farmers do give up the fight, but chances are Washington's heart wasn't in the crusade. His plantation, Mount Vernon, was home to America's biggest distillery.

In 1861, the federal government imposed the first income tax to support the Civil War and no one challenged its authority to do so. The tax expired of its own accord in 1872. But Benjamin Harrison took on the taxman when it assessed a levy against the money he had collected as the official reporter of decisions of the Indiana Supreme Court. Harrison's official reports sold unusually well because he had invented what we now know as the headnote system, cross-referencing the holdings of each decision into an index of topics covered. Harrison argued that he was not a stand-alone bookseller. Instead he was performing an official state government function and was therefore exempt from federal taxation. He won, and never got tired of bragging about it the rest of his life.

Well into the 20th century the federal government got by on revenue from import duties and excise taxes, and litigation involving both was plentiful. In 1872 Harrison got involved in a tax matter at the U.S. Supreme Court inBurke v. Smith, 83 U.S. 16 (1872). Opposing counsel included James A. Garfield, who as chairman of the House Ways and Means Committee, had no trouble securing clients in tax cases. The Burke case is the only instance in history when two U.S. presidents squared off on opposite at the Supreme Court.

The progressive movement of the late 19th century championed the imposition of the income tax as a means of undermining protective tariffs and sticking it to the Robber Barons, whom Theodore Roosevelt dubbed "the malefactors of great wealth." But the Supreme Court had ruled inPollock v. Farmers Loan Trust Company, 157 U.S. 429 (1894), that constitutional provisions forbidding taxes that were not apportioned equally among the states rendered an income tax constitutionally unworkable. It took the 16th Amendment, passed in 1913 to make the imposition of an income tax constitutional, and that amendment only passed because of the influence of America's most powerful lobby, the Anti-Saloon League. One of the most persuasive arguments against prohibition was that the government would go broke if it lost its income stream from excise taxes on booze. The availability of an income tax negated that argument.

Government grew exponentially during the Progressive era, the New Deal and World War II. By the time Dwight Eisenhower was contemplating writing his war memoir "Crusade in Europe" in 1948, the top tax bracket had reached 82 percent. Ike was sympatico with Samuel Johnson, who once said "No one but a blockhead ever wrote for anything but money" and was reluctant to put his pen to paper. Tax lawyer Joseph Davies obtained an opinion from the IRS that if Eisenhower sold his manuscript to Doubleday publishers for a flat fee, that the monies he received would not constitute regular income, but a capital gain. Eisenhower sold his memoirs to Doubleday for $635,000 and paid a capital gains tax of 25 percent only. His tax exposure fell from $520,700 to $158,750.

His vice president, Richard Nixon, took heed and got himself into trouble during Watergate for failing to claim as income improvements to his home in San Clemente paid for by the government but by no logical stretch necessary for security purposes. Nixon also wildly overvalued personal papers he had donated to the National Archives. At the House Judiciary Committee impeachment hearings, freshman Congressman Ed Mezvinski,, a Hastings grad, introduce a separate article of impeachment based upon Nixon's tax irregularities. It failed to pass in the Committee.

Mezvinski was later voted out of office and got involved in his own mire of financial irregularities that landed him in jail. He's out of jail now. His in-laws are Bill and Hillary Clinton.