The evolution of income tax

It wasn't until World War II that the federal income tax evolved from a so-called class tax to a mass tax.

"During World War II . . . they needed a lot of money, and they needed it quickly," Thorndike said. "And that really did change the tax system forever, because it would no longer be confined to the elite. However, they retained the progressive structure."

President Franklin Roosevelt knew that to generate enough revenue, he would need money from the middle class -- but that to garner strong support, the rich would have to be seen as paying their fair share.

At the height of the war, the top tax rate stood at 94%, although exemptions, deductions and lower capital-gains taxes brought the effective rate down to about 60%. Workers at the very bottom, those earning up to $2,000 ($25,200 in 2011 dollars), were required to chip in 23%.

In 1945, the federal public debt reached its all-time high of 112.7% of GDP ($251.4 billion, or $3.155 trillion in 2011 dollars).

As Walt Disney propaganda films implored Donald Duck to pay his "taxes to sink the Axis," the federal government was pulling in 21% of its GDP in all taxes, investing that money overseas in the war effort and at home in the form of factories, roads and schools.

In 1947, just two years after the end of the war, the government brought in an annual surplus, equivalent to 1.7% of GDP. From the beginning of his presidency, Democrat Harry Truman fought off efforts to lower the tax rates, calling for a commitment to pay down the war debt when the economy thrived.

If not, "the country would, as a result, be in a poorer position to extend supports to the economy should a subsequent deflationary period develop," Truman told the nation in his 1947 budget address.

The marginal tax rates remained at least 91% for top earners and 20% for low-income workers through 1963, when they were reduced to 77% and 16%, respectively, under President John F. Kennedy. The federal public debt gradually and steadily dropped, reaching 39% of GDP in 1964 and 25% in 1974.

The federal debt, meanwhile, dropped every year during the post-WWII boom, thanks to a thriving economy and a rapidly expanding middle class. In 1964, it stood at 39% of GDP, or $258.8 billion ($1.88 trillion in 2011 dollars).

Even with the spending of the Vietnam War and the Great Society -- which ushered in Medicare and expanded educational funding -- the debt as a portion of the country's output shrank, reaching 24.6% of GDP in 1974, or $369 billion ($1.69 trillion in 2011 dollars). That was the lowest the debt load had been since 1931.

Starving the beast

In 1981, President Ronald Reagan introduced a new era, lowering income taxes in an effort to boost investment and starve the government from further spending.

The tax rate for top earners was reduced from 70% to 50% in 1982 and to 28% in 1989. Spending, however, rose, and the public debt steadily crept back up, from 26% of GDP in 1981 to 49.5% of GDP in 1993, or $3.3 trillion ($5.15 trillion in 2011 dollars).

In 1993, the year Bill Clinton became president, the top marginal tax rate was raised again, to 39.6%. By 2000, the public debt had dropped, to 34.5% of GDP, or $3.38 trillion ($4.43 trillion in 2011 dollars), and the government was realizing an annual surplus.

For middle-income Americans, the tax rate was at a historic low. And top earners were paying less on capital gains, for a lower effective rate.

A shift in America's long budgetary history occurred, economists say, when tax cuts were not only introduced during a relatively healthy 21st-century economy but also kept low as the country went to war.

"The real cost of that is you've turned those surpluses into deficits," said Marr, of the Center on Budget and Policy Priorities.

With the economy strong, President George W. Bush and Congress cut income taxes across the board in 2001 and 2003. Those cuts cost the government more than $1.8 trillion from 2002 to 2009; the wars in Iraq and Afghanistan cost an additional $1.5 trillion over the same period.

By 2009, when President Barack Obama took office, the public debt stood at $6.3 trillion, or 53.5% of GDP, its highest percentage since 1955.

The other dramatic shift? For perhaps the first time since the inception of the income tax, it is possible for those at the top of the income scale to pay a smaller effective tax rate than those in the middle.

"Everybody's taxes have gone down over the past 10 years," said Michael Linden, the director of tax and budget policy at the Center for American Progress, or CAP, a progressive nonprofit in Washington, D.C. "But rich people's taxes have gone down much faster than middle-class taxes or low-income people's."

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Compounding the problem is that far more income has moved to the top. From 1979 to 2007, the wealthiest 1% of households saw their pretax annual income increase 240% (on average, to $1.87 million from $550,000), according to the most recent figures from the Congressional Budget Office. Average income for those in the middle fifth rose 19% (to $64,500 from $54,000).

Today, the top 20% of Americans hold 84% of the country's wealth, so low tax rates at the top end up having a large effect on total tax revenue. With spending needs projected to rise due to increasing health care costs and an aging population, experts agree that revenue -- meaning taxes -- will have to go up.

"On some level, we're going to raise taxes, and everybody knows that," said Thorndike, of the Tax History Project. "Except maybe the Tea Partyers."