Why Do Americans Pay Taxes on April 15?

By: Dave Roos  | 
April calendar, calculator, 1040 form
We associate April 15 with the stress of paying taxes, but that hasn't always been the case. Nora Carol Photography/Getty Images

We may associate April 15 with the stress and scrambling that comes with knowing that taxes are due, but Tax Day hasn't always landed on that particular date.

In fact, there was no such thing as Tax Day in the U.S. before 1913. That was the year that Congress and a three-fourths majority of the states passed the 16th amendment to the Constitution, giving the federal government power to collect income tax on all U.S. citizens.


Prior to 1913, the only time the government collected income tax was during the Civil War, when President Abraham Lincoln appointed a commissioner of Internal Revenue to help fund the ongoing war effort, but the tax was repealed soon after the war ended [source: Internal Revenue Service].

Why Do We Pay Taxes?

The Federal government needs money (revenue) to pay for everything on its budget. Today, the government spends the vast majority of tax dollars (about 84 percent) on six major budget items:

  1. Medicare, Medicaid, the Children's Health Insurance Program (CHIP) and subsidies for the ACA marketplace (24 percent)
  2. Social Security (21 percent)
  3. National defense and security (13 percent)
  4. Interest on the national debt (10 percent)
  5. Economic security programs, like the refundable portions of the Earned Income Tax Credit and Child Tax Credit (8 percent)
  6. Benefits for veterans and federal retirees (8 percent)

The other 16 percent is split among other investments in education, scientific research, roads and bridges, the environment and international aid [source: Center on Budget and Policy Priorities].


Before 1913, the government generated revenue chiefly through excise taxes (taxes on the sale of particular goods like alcohol and tobacco) and tariffs on imports. But that still left the government in debt, especially in times of war. Many politicians saw a permanent income tax as the solution. Adding to the momentum for the income tax was increasing income inequality between a few super-wealthy industrialists and the common worker [source: Tax History Museum]. Congress passed a bill in 1894 establishing an income tax of 2 percent on income above $4,000, but the law was struck down by the Supreme Court as unconstitutional. It took the 16th Amendment to overcome the Court's opposition.


The Creation of Tax Day

Soon after the passing of the 16th Amendment, Congress named March 1, 1914, as the first Tax Day. Why March 1? It fell roughly one year after the 16th Amendment was enacted [source: Sung]. The Bureau of Internal Revenue created Form 1040 to file and pay personal income tax, which was 1 percent for income under $3,000 ($4,000 for married joint filers) and up to 6 percent for the wealthiest Americans [source: Tax History Museum].

Tax Day was moved to March 15 in 1918 and then again to April 15 in 1955. The official reason for the pushback was to spread the workload of IRS employees, but some economists speculate that a later filing date means the government can wait even longer to pay refunds [source: Sung]. The longer the IRS can hold onto the money it withholds via payroll taxes, the more interest it earns.


An Exception to April 15

But even the April 15 due date can shift a little. In 2005, the District of Columbia enacted Emancipation Day on April 16 to commemorate the day Lincoln signed an 1862 law freeing the first slaves in Washington, D.C. When April 16 falls on a Saturday, the holiday is officially celebrated on Friday, and when it falls on Sunday, it's celebrated on Monday. The IRS can't force people to file taxes on a holiday (even a local one) or the weekend. That's why Tax Day was on Tuesday, April 18 in 2023: Sunday the 16th was technically Emancipation Day but it was celebrated on Monday the 17th.

There was a small caveat, however: If you submitted IRS Form 4868 on or before April 15, you got an automatic six-month filing extension. But that didn't mean you didn't have to pay any taxes you owe by April 15. According to the IRS, you needed to estimate what you owed and pay that amount on April 15. If you paid too much, the IRS refunded you the difference when you filed. If you paid too little, you could make up the difference when you file. But if you didn't pay anything, the IRS charged interest (plus a late payment penalty) on what you owed, starting on April 16 [source: IRS].


Lots More Information

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  • Center on Budget and Policy Priorities. "Policy Basics: Where Do Our Federal Tax Dollars Go?" April 15, 2011(Accessed Jan. 10, 2011.) http://www.cbpp.org/cms/index.cfm?fa=view&id=1258
  • IRS. "Brief History of IRS" (Accessed Jan. 20, 2011.) http://www.irs.gov/irs/article/0,,id=149200,00.html
  • IRS. "Form 4868: Application for Automatic Extension for Time to File U.S. Individual Income Tax Return." 2011. (Accessed Jan. 20, 2011.) http://www.irs.gov/pub/irs-pdf/f4868.pdf
  • Sung, Jessica. Fortune. "Why is Tax Day April 15?" April 15, 2002 (Accessed Jan. 22, 2011.) http://money.cnn.com/magazines/fortune/fortune_archive/2002/04/15/321414/index.htm
  • Tax History Museum. "1866-1900: Reconstruction to the Spanish-American War" (Accessed Jan. 20, 2011.) http://www.taxhistory.org/www/website.nsf/Web/THM1866?OpenDocument
  • Tax History Museum. "1901-1932: The Income Tax Arrives" (Accessed Jan. 20, 2011.) http://www.taxhistory.org/www/website.nsf/Web/THM1901?OpenDocument