Taxing times: Behind the Form 1040

(CBS News) Nothing says TAXING TIMES quite like the realization that you have almost no time left to mail in your tax return. You only have until midnight tomorrow . . . remember? Our Cover Story is reported by Anthony Mason:

The Internal Revenue Service received a package recently addressed to its headquarters on Constitution Avenue in the nation's capital. It was not a tax return.

No, Mr. Haynes' history students at JFK Middle School in Florence, Mass., all sent birthday cards to the federal income tax - because Form 1040, the document most taxpayers fill out, turned 100 this year.

The original tax form, introduced in 1913, only came with one page of instructions, "which would make people very happy," said Nina Olson, taxpayer advocate at the IRS.

Back then, only about 3 percent of the population was subject to the income tax. Today it's 54 percent. Gone is the single page of instructions, with its deductions for losses due to "shipwreck."

Now, the tax code is more than 73,000 pages long. Just figuring out what to pay eats up an estimated 6.1 billion hours of our time each year.

Complete CBSNews.com coverage: Tax season

Olson agreed it was easy to understand that everybody "loves to hate" the IRS.

"Even if you like what those tax dollars are doing, even if you feel the benefits of them, you don't want somebody taking your money away from you," she told Mason. "And we constantly have to remind them that IRS has nothing to do with the tax code. You know, Congress passed it."

Congress may get the blame now, but it was the American people who passed the 16th Amendment to the Constitution, making the income tax possible.

At first, it affected only the well-off, with a top rate of just seven percent. But only four years later, when we entered World War I, that rate soared to 77 percent.

"That's sort of the untold story of American history -- the different points at which Americans have supported the tax system, have supported higher taxes for purposes and goals that they believed in," said tax historian Joseph Thorndike. He says we may see ourselves as a nation founded on resistance to taxation, but that's only part of the story.

Consider the Boston Tea Party, the granddaddy of tax rebellions. It was less about paying taxes than objecting to tax loopholes granted to British companies. Then, as now, the system hinges on the notion of fairness.

"The income tax is a shared responsibility, and when it starts to seem less shared, you're going to have a problem," Thorndike said. "Because you have to make the taxpayers feel like the system is fair because they're the ones paying the bills."

Indeed, by the 1920s, the wealthy who paid those bills had had enough. Their champion arrived in the form of Treasury Secretary Andrew Mellon, a banker who himself paid more in taxes than just about anyone in the country.

"The old joke is that three presidents served under Andrew Mellon," laughed Thorndike. "He was Secretary of the Treasury for parts of the Harding, Coolidge and Hoover administrations. None of those presidents even approached him in terms of their influence on tax policy. He was The Man."

During the Roaring Twenties and the Great Depression alike, Mellon argued that high taxes hurt the economy, that they rob incentive from innovators and job creators -- beliefs that still echo today.

Grover Norquist, founder and head of the conservative lobbying group Americans for Tax Reform, was asked by Mason if he thinks the income tax, as it's structured now, is fair. "Taxation is taking things from people who earned it and giving it to people who may or may not have earned it," he replied. "Fair's not the question."

Norquist is dedicated to, in his words, "shrinking government down to the size it can be drowned in a bathtub." And he's no fringe-thinker: Close to half of the House and Senate -- 258 Members -- have signed Norquist's pledge never to raise taxes.

"Look, taxes are how you fund government. The question is, what's a legitimate function of government, and what isn't?" Norquist said. "Should the government have farm subsidies, yes or no? It's a different question than, if you're having farm subsidies, who do you steal the money from? And sometimes they can go, 'Well, we're not going to steal it from you, so what do you care if we waste it?'"

"Well, you use the word 'stealing,'" Mason interjected.

"I'm sorry, 'take by force,'" Norquist said.

"Okay. Well, that's also a strong word."

"Okay, don't pay your income taxes and see what happens -- they take it by force," Norquist said.

Thorndike countered, "That just strikes me as an overdramatic analysis of the situation. Taxes are what we pay to make the government go. I mean, it's really not very complicated. You have a lot of stuff you want government to do: You want stop signs, you want paved roads, you want an army, you want Social Security; you've got to pay for these things somehow. Asking people to pay for them? That's not robbing them of freedom; that's asking them to pay the price for the things that they're trying to buy."

According to a new Pew Research study out last week, a majority of Americans dislike (or even hate) doing their taxes. But 71 percent believe it's a moral obligation to report all of their income to the tax collector.

"It is part of our shared civic responsibility of being Americans, and living in the greatest country in the world," said Rep. Dave Camp, one of the Congressmen who signed Norquist's pledge not to raise taxes.

But the Michigan Republican is in a unique position: He chairs the House Ways and Means Committee, the body responsible for writing -- and possibly reforming -- the tax code.

"I think many people have the sense that if only they could get the best lawyer and the best accountant, they'd be paying less than they're paying now," said Camp. "And so I think there is an appearance of unfairness. Most of the higher-income people use most of the deductions. And so I think there's a sense there, 'Gee, the top end gets rewarded in ways that the average person doesn't.' "

Tax reform may help address questions of fairness; and whether we expect our rates to go up or down, most appear to agree with the words of Oliver Wendell Holmes inscribed above IRS headquarters: "Taxes are the price we pay for a civilized society."

"I don't want to seem misty-eyed and all happy about the income tax, 'cause I personally hate paying them as much as anybody," said tax historian Thorndike. "I certainly hate the process of paying them. But I don't think that that's entirely bad, because it is a moment of connection, of reflection. It's a moment for everyone to sit back and think, 'Hmm, okay, this is what I'm paying for; I hope I get my money's worth.'"

Most Americans probably won't include birthday cards with their 1040 Form tomorrow. Even a few members of Mr. Haynes' middle school class were less than celebratory. As Adele wrote:

"Happy 100th birthday federal income tax. Thank you for giving me one more thing to not look forward to as I commence into adulthood."

For more info:

• Internal Revenue Service
• Taxpayer Advocate Service (IRS)
• Joseph J. Thorndike
• "Their Fair Share: Taxing the Rich in the Age of FDR" by Joseph J. Thorndike (Urban Institute Press); also available in eBook
• Americans for Tax Reform
• Rep. Dave Camp, R-Mich.
• JFK Middle School, Florence, Mass.