Withholding Began to Pay for World War II — So Why Didn't It End When the War Did?

On July 1, 1943, income tax began coming out of every American paycheck. That week a paper mill in Pisgah Forest, North Carolina, told its workers that each pay check would now carry a letter, A through J, and that a married man with three children earning $35 a week would have 70 cents taken. "We Suggest That You Tear Out This Page And Save It," the notice ended. Withholding began as one of the ways America paid for World War II. The war ended in 1945. In fiscal 2025, the IRS counted $1.95 trillion withheld from Americans' pay, two of every three dollars of the individual income tax. In this video, we open the records Congress, the Treasury and the taxpayers left behind: Beardsley Ruml's plan to "turn the tax clock ahead," the House vote of March 30, 1943, that killed it 215 to 198, President Roosevelt's letter of May 17, 1943, the Current Tax Payment Act signed June 9, 1943, with one end date written in, and not for withholding, Truman's vetoes of 1947 and the override of April 2, 1948, the Connecticut manufacturer Vivien Kellems who stopped withholding from her workers' pay in 1948, Ronald Reagan's "veto pen" of 1983, California's 1968 estimate of what the switch was worth, and Milton Friedman's words in 1995: "I wish there were some way of abolishing withholding now." This is the story of how a wartime way of collecting tax took over every paycheck in America, and why it did not end when the war did. 💬 If your family remembers its first paycheck with tax taken out, tell us in the comments: if you had run a business in 1948, would you have done what Vivien Kellems did? #AmericanHistory #IncomeTax #TaxWithholding #WorldWar2 #1943 #Paycheck #IRS #FDR #Truman #MiltonFriedman #TaxHistory #MoneyHistory #HistoryDocumentary #Documentary #OldAmerica