1943: "Pay As You Go" Tax Established

World War II prompted sweeping fiscal changes in the United States, as President Franklin Roosevelt and his fellow legislators geared the nation for the rigors of wartime production. Along with reallocating vast chunks of America's work force to the task of manufacturing military items, Roosevelt helped establish tight controls on wages, prices, and consumption. While most of these initiatives were brought to a halt shortly after the declaration of peace in 1945, at least one wartime fiscal policy -- the Current Tax Payment Act -- has had some enduring impact. Indeed, the tax legislation, which hit the law books on this day in 1943, paved the path for withholding on income taxes. In particular, the bill, popularly known as the "Pay As You Go Tax," allowed Americans to taxpayers to withhold federal income taxes before getting paid their wages or salaries.

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