The Sixteenth Amendment to the United States Constitution was ratified on this day in 1913, authorizing the Federal government to impose and collect an income tax. Before this, the government relied largely on alcohol sales for tax revenue. When they saw how much money they were raking in on income tax, the state went ahead with Prohibition of alcohol.
"Despite pleas throughout the 1920s by journalist H.L. Mencken and a tiny handful of other sensible people to end Prohibition, Congress gave no hint that it would repeal this folly. Prohibition appeared to be here to stay — until income-tax revenues nose-dived in the early 1930s." ~Justin M. Ptak
That's right. With the great depression tax revenues kept decreasing. However, the government still wanted their money...so they repealed Prohibition in 1933 and started collecting alcohol tax again.
And yes, taxation is still theft:
"All other persons and groups in society (except for acknowledged and sporadic criminals such as thieves and bank robbers) obtain their income voluntarily: either by selling goods and services to the consuming public, or by voluntary gift (e.g., membership in a club or association, bequest, or inheritance). Only the State obtains its revenue by coercion, by threatening dire penalties should the income not be forthcoming. That coercion is known as 'taxation,' although in less regularized epochs it was often known as 'tribute.' Taxation is theft, purely and simply even though it is theft on a grand and colossal scale which no acknowledged criminals could hope to match. It is a compulsory seizure of the property of the State’s inhabitants, or subjects." Murray Rothbard
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