If taxpayers knew how much the government the government was taking from them in taxes, there might be some slowdown on government spending.
The History of Withholding
In 1905, one of the most influential unknown men in history, Frederick Gates, wrote a memo to his employer, John D. Rockefeller, Sr. I have seen the original document in the archives of the Rockefeller Archives in Tarreytown, New York, which scholars are allowed to use for free. It was one of the most important letters in history. It was a call for Rockefeller to set up charitable foundations.
Gates gave this reason:
Your wealth is rolling up, rolling up like an avalanche! You must keep up with it! If you do not, it will crush you and your children and your children’s children.
The old man was already giving away lots of money. He had set up the General Education Board in 1902, which I regard as the most important unknown organization in American history. It was the first academic accrediting agency. It gave away big money to select colleges, but only if they added men holding the Ph.D. to the faculty. Through endowed chairs in education in colleges, it promoted public education, especially high school, especially in the South. Through it, the Rockefellers re-structured American education, from graduate school to kindergarten. A century later, there is still no comprehensive, academic history of academic accreditation, which is how the Establishment has gained almost complete control over higher education in America, including private colleges. But I digress.
It was through Gates’ influence that John D., Sr., along with the various Carnegie organizations, spent tens of millions to re-shape America, back when a million dollars was big money. For two decades, Gates was Rockefeller’s director of charities. I refer to him as the bag man. Those millions bought a lot of silence from potential Rockefeller critics in the middle class. Gates was replaced in 1921 by Raymond Fosdick, brother of the famous minister, Harry Emerson Fosdick. Raymond helped direct the spending of John D., Jr. over the next four decades. Among their "gifts" to America was Federal income tax withholding, which raised revenues from $3.2 billion in 1942 to $19.7 billion in 1944. This program was proposed by Beardsley Ruml, who had been hired by Fosdick in 1922. (The
academic economist who helped design the original program was Milton Friedman.)