Lawrence Vance is correct in his LRC article today that personal income tax withholding was created during World War II, and that Milton Friedman played a big role in it as a U.S. Treasury Department employee. But the idea of withholding, like so many other statist schemes, was the work of the Lincoln administration. The Lincoln administration adopted the first income tax in U.S. history. It started out as a flat tax, then it was made “progessive.” The evil and corrupt concept of “ability to pay” was their work as well. This is the Willie Sutton theory of tax collection: … Continue reading Blame Lincoln, not Friedman, for Withholding