Why Is April 18 the Tax Deadline?

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Tax Deadline
J. D. Montgomery holds a sign on the street outside of the James C. Corman Federal Building encouraging motorist to express their anger at the Internal Revenue Service (IRS) on their final day to file 2005 income taxes on April 17, 2006 in Van Nuys, California. Photo by David McNew/Getty Images

Tax day falls on April 18, 2017. That's the deadline for filing taxes on income earned in 2016. Usually, April 15 is the day taxes are due. But in 2017, that falls on a Saturday. On Monday, the District of Columbia celebrates Emancipation Day. That affects taxes the same way federal holidays do. Emancipation Day is normally April 16, but that's a Sunday. Therefore, the tax deadline is pushed out to the following Tuesday, April 18.

That gives taxpayers three extra days to file their returns.

Originally, back in 1913, the deadline was March 1. That's when Congress passed the 16th Amendment. It created the income tax on February 3, 1913. It taxed incomes above $4,000. Industrialists opposed it. Prior to that, the federal government derived its revenue from tariffs on imports and exports. That hurt the middle class the most since they spend more of their income on these day-to-day necessities. It also taxed cigarettes and alcohol heavily. In fact, it received 90 percent of its revenue from those two taxes alone. (Source: History of the Internal Revenue Service, IRS.gov.)

Congress wanted to tax everyone more fairly. It had tried a national income tax in 1894. But it was unconstitutional because all federal taxes were based on state population at that time. The only solution was to amend the Constitution, and the 16th Amendment did just that.

Congress gave everyone a year plus six weeks as the first deadline. Only 358,000 Americans filed returns. That was fewer than 0.4 percent of the population.

The Revenue Act of 1918 moved the tax deadline back to March 15. It imposed a 77 percent tax on the highest income to raise money for the U.S. involvement in World War I.

It also sought to replace tariffs. World War I severely disrupted trade. That significantly lowered the federal government's revenue. The income tax was so successful that the Internal Revenue Service couldn't keep up. It hadn't finished auditing 1916 returns by the time taxes were due in 1919. For more, see History of the U.S. Income Tax

The Depression lowered incomes so significantly that people stopped paying taxes. Congress raised rates and cut exemptions to fund World War II. It became a patriotic duty to pay taxes. Irving Berlin wrote songs and the IRS made posters reminding people to pay. The Treasury Department began withholding tax payments from workers' paychecks. The W-2 was born. (Source: "Never a Convenient Time for Childbirth, Death, or..." Bloomberg, April 11, 2016.)

In 1954, President Eisenhower asked Congress to reform the tax code. Congress added deductions and credits, but also made it more complicated. It also pushed the tax deadline back to April 15. Why? The IRS said it "spread out the peak workload." It could also be because, as the middle class grew, the IRS had to issue more refunds.

Pushing back the deadline let the federal government hold onto your money just a wee bit longer. (Source: Jessica Sung, "Why Is April 15 Tax Day?" Fortune Magazine, April 15, 2002)

Emancipation Day also affected the tax deadlines in 2016, 2012, and 2011. It was extended to April 17 in 2016 and 2012, and to April 18 in 2011. 

In 2015, Tax Freedom Day was April 17. What's the significance? Until then, all workers' incomes went just to pay off their taxes. The recession provided one strange benefit, however. In 2012, Tax Freedom Day was about a week earlier than in 2007. In 2011, it was two weeks earlier. Slower economic growth meant that fewer taxes were collected. Many people who were unfortunate enough to lose jobs during the year found out they were put into a lower tax bracket. They paid fewer taxes or none at all. 

The drop in tax revenue was magnified by the Bush tax rebates in 2008 and the Obama tax cuts in 2009 and 2010. Surveys show that most people believe they paid higher taxes under Obama than previously. In fact, that's mistaken. The average taxpayer shelled out less. Unfortunately, it was because they received a lower income, thanks to the recession.

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