The other day, I did a quick search on the Library of Congress’s Chronicling America site to see if I could find any information about prominent Utah or Mormon taxpayers.
See, today’s tight privacy of tax return information hasn’t always existed. For a couple of years in the 1920s, Congress required taxpayers to publicly disclose their tax payments; apparently, newspapers had a field day publishing the tax payments (and refunds) of the wealthy and the famous.[fn1] I was curious if Utah newspapers did the same.
But I got distracted on my first hit, from the Lehi Sun. It didn’t release the names of taxpayers, or what they paid, but it did give a snapshot of Utah’s taxpaying from 1916-1920.[fn2]
According to the Lehi Sun (and I’ve confirmed it with the Treasury Department’s Statistics of Income volume for 1920), 30,510 Utahns filed tax returns, reported net income of $82,278,389, and paid collective income taxes of $1,506,781.[fn3] In fact, the Sun provides this Utah data for four years:
There are a couple important things to note here. Those 30,510 returns filed in Utah in 1920? According to the Census, Utah’s 1920 population was 449,396. In other words, only about 6.79% of Utahns filed a return. Now, to some extent that makes sense: a significant percentage of Utahns were likely children, and I assume many people (including married women) weren’t earning income. Still, it seems like a tiny number. Why so small?
Largely because in 1920, the federal income was still a class tax. It wouldn’t become a mass tax (meaning, it wouldn’t affect most people) until World War II.[fn4] In fact, the Sun reports, nationally, about 6.85% of the population filed tax returns. Why so few? In 1920, the tax law provided for a personal exemption of $1,000 for an individual, $2,000 for a married couple, and an additional $200 per dependent. That means a family of 6 would have to earn $2,800 before they had to file a return or pay taxes.
If I really wanted to spend time, I’m sure I could find the median household income in 1920. It’s not coming up instantly in my Google searches, but the Census does tell me that in 1947—27 years after what I’m looking at—the median family earned $3,031. So median income in 1947 would be barely enough to require a family of six to file a tax return in 1920; that number would have been significantly smaller in 1920.
Another point: this doesn’t necessarily tell us a lot about Mormon income. 1920, it turns out, was a low point for the proportion of Mormons in Utah, having fallen to just 55%.[fn5] And the roughly 247,000 Mormons who lived in Utah represented about 47% of the church’s 525,987 members in 1920. So we have no way of knowing what proportion of the 30,510 Utah taxpayers Mormon. Moreover, even if we assume they all were, Utah Mormons’ income may not have been representative of Mormons at large—Mormons in Utah may have been richer or poorer than Mormons outside of Utah.
Finally, while taxpayers reported net income of a little over $82 million in 1920, that doesn’t mean that the average income in Utah was $182 (that is, total net income divided by residents). The income is only income from individuals who filed tax returns; it doesn’t take into account the income of the other 93% of Utahns.
Some other fun tax trivia from the 1920 Statistics on Income volume: Alaska had the highest percentage of taxpayers, with 18.03% of its population filing a return (which makes some sense, given that its population was just under 55,000 individuals, making it the smallest state by a lot). Meanwhile, with 1.56% filers, Mississippi had the lowest proportion.
Even though Alaska had the highest proportion of residents paying income taxes, it provided less federal revenue than any other state, with its residents paying only $248,605. New Yorkers paid the most in taxes, raising $286,607,280 in taxes. In fact, in 1920, New York paid 26.65% of the income taxes paid, while its population represented about 9.8% of the country’s population.
And how did Utah fare? Well, the $1.5 million Utahns paid in taxes represented 0.14% of federal income tax revenues in 1920. And Utah’s population represented 0.4% of the country’s population.
There are plenty of other things to tease out of the data. What did I miss? What do you see in the 1920s that’s interesting? Also, did Utah newspapers report on prominent Mormons’ or Utahns’ tax bills? (That would have been 1924 and 1925.)
[fn1] If you’re interested, John D. Rockefeller, Jr.’s 1924 tax bill of $6,277,669 was the biggest tax bill in the country in 1924, according to the New York Times. And that’s in 1924 dollars.
[fn2] The 16th Amendment was ratified, and the modern federal income tax was enacted, in 1913. So this is a snapshot of some of the earliest years of the modern federal income tax.
[fn3] It’s not an apples-to-apples comparison, because tax rates changed, but note that in 1920, Utahns collectively paid only 25% of the amount of taxes that Rockefeller paid personally four years later.
[fn4] I’m not sure who originated the terms class tax and mass tax, but I got them from Joseph Thorndike’s excellent book about the roots of the modern income tax.
[fn5] Dean May, “A Demographic Portrait of the Mormons, 1830-1980,” in New Mormon History, 125. Thanks to J. Stapley for getting me this information.